Introduction

The title of this book indicates that its subject matter is concerned with the firm, one of the institutional cornerstones of economic theory. Over the last few decades our understanding of this entity has been increasingly taken over (more critical theorists might say ‘highjacked’) by transaction cost economics, which has achieved the position of somewhat of an orthodoxy in this area (for reasons which will soon become apparent). This dominant position is perhaps most obvious in the field of industrial organisation under the influence of work based on Oliver Williamson’s project to take institutions seriously. As he has pointed out ‘Transaction cost economics has helped to promote growing interest in the economics of organisation…. After a tentative beginning, research…has grown exponentially in the past fifteen years.’ (Williamson 1985:ix).