How does opportunistic behavior influence firm size?: An evolutionary approach to organizational behavior
2011 (English)In: Journal of Institutional Economics, ISSN 1744-1374, no 7, 1-21 p.Article in journal (Refereed) Published
This paper relates firm size and opportunism by showing that, given certain behavioural dispositions of humans, the size of a profit-maximizing firm can be determined by cognitive aspects underlying firm-internal cultural transmission processes. We argue that what firms do better than markets – besides economizing on transaction costs – is to establish a cooperative regime among its employees that keeps in check opportunism. A model depicts the outstanding role of the entrepreneur or business leader in firm-internal socialization processes and the evolution of corporate cultures. We show that high opportunism-related costs are a reason for keeping firms’ size small.
Place, publisher, year, edition, pages
2011. no 7, 1-21 p.
IdentifiersURN: urn:nbn:se:su:diva-65971DOI: 10.1017/S1744137410000123OAI: oai:DiVA.org:su-65971DiVA: diva2:479741