Journal of Management and Governance

, Volume 5, Issue 3–4, pp 381–399

Neither Hierarchy nor Identity: Knowledge-Governance Mechanisms and the Theory of the Firm

  • Anna Grandori


Building on existing empirical research on knowledge transfer, sharing and integration in inter-firm and intra-firm relations, it is argued that there is little evidence and theoretical reason for assigning exclusive properties to internal or external organization, as such, in a knowledge-governance respect. A more micro framework is then theoretically developed, in which a portfolio of knowledge-governance mechanisms is evaluated according to two criteria: the cognitive `possibility' to sustain certain types of knowledge interchanges; and the comparative cost of the mechanism where more than one is applicable.

The results of both the empirical and conceptual analyses conducted cast doubts on the possibility of having a `theory of the firm,' based on the deterministic presence/absence of certain attributes and the possession of exclusive properties – no matter if hierarchy or identity – and call for a more `continuous' (rather than `discrete') and `combinative' (rather than mutually exclusive) notion of governance forms.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Arrow K.J.: 1974, The limits of Organization (New York/London: W.W. Norton and Company).Google Scholar
  2. Axelrod R.M.: 1984, The Evolution of Cooperation (New York: Basic Books).Google Scholar
  3. Bazerman M.H. and R.J. Lewicki (a cura di): 1983, Negotiating in Organizations (Beverly Hills, CA: Sage).Google Scholar
  4. Becker, G.S. and K.M. Murphy: 1992, “The Division of Labor, Coordination Costs, and Knowledge”, Quarterly Journal of Economics CVII(4): 1137–1160.Google Scholar
  5. Brown, J.S. and P. Dusguid: 1998: “Organizational Learning and Communities-of-Practice: Towards a Unified View of Working, Learning and Innovation”, California Management Review 40(2): 40–57.Google Scholar
  6. Brusco S.: 1999, “Rules of the Game in Industrial Districts”, in A. Grandori (ed.), Inter-Firm Networks: Organization and Industrial Competitiveness (London: Routledge).Google Scholar
  7. Brusoni, S. and A. Prencipe: forthcoming, “Unpacking the Black Box of Modularity: Technologies, Products, and Organizations”, Industrial and Corporate Change.Google Scholar
  8. Buckley, P.J. and J. Michie: 1996, Firms, Organizations and Contracts (Oxford: Oxford University Press).Google Scholar
  9. Buckley, P.J. and J. Michie: 1999 “Knowledge Sharing in Organizations: A Field Study”, 16th EGOS Colloquium, Track on ‘Knowledge, Knowing and Organization’, Warwick.Google Scholar
  10. Coase, R.: 1937, “The Nature of the Firm”, Economica: 386–405.Google Scholar
  11. Cohen, W.M. and D.A. Levinthal: 1990, “Absorbtive Capacity: A New Perspective on Learning and Innovation”, Administrative Science Quarterly 35: 128–152.Google Scholar
  12. Conner, K.R. and C.K. Prahalad: 1996 “A Resource-Based Theory of the Firm: Knowledge versus Opportunism”, Organization Science 7(5): 477–501.Google Scholar
  13. Davenport, T.H. and L. Prusak: 1998, Working Knowledge: How Organizations Manage What They Know (Cambridge: Harvard University Press).Google Scholar
  14. De Laat, P.: 2000, “Property Right or Property Left?: The Protection of Intellectual Property in Software”, 16the EGOS Colloquium, Session ‘Knowledge, Knowing and Organization’, Warwick.Google Scholar
  15. Demsetz, H.: 1991, “The Theory of the Firm Revisited”, in O. Williamson and S. Winter (eds.), The Nature of the Firm: Origins, Evolution and Development (Oxford: Oxford University Press).Google Scholar
  16. Dioguardi, G.: 1987, L'impresa nell'era del computer (Milano: Ed. Sole 24 Ore).Google Scholar
  17. Dyer, H.H.: 1999, “Interorganizational Learning, Barriers to Knowledge Transfers, and Competitive Advantage”, Strategic Management Society Meeting; Orlando, July.Google Scholar
  18. Foss, N.J.: 1993, “Theories of the Firm: Contractual and Competence Perspectives”, Evolutionary Economics 3(2): 127–144.Google Scholar
  19. Foss, N.J.: 1996, “More Critical Comments on Knowledge-Based Theories of the Firm”, Organization Science 7(5): 519–523.Google Scholar
  20. Galbraith, J.R.: 1974, “Organization Design: An Information Processing View”, Interfaces 4: 28–36.Google Scholar
  21. Gavetti, G.: 1998, “L'insostenibilità della sostenibilità”, in A. Lipparini (ed.), Competenze organizzative (Bologna: Il Mulino).Google Scholar
  22. Grandori, A.: 1997, “An Organizational Assessment of Inter-Firm Coordination Modes”, Organization Studies 18(6): 897–925.Google Scholar
  23. Grandori, A.: 2001a, Organization and Economic Behavior (London: Routledge).Google Scholar
  24. Grandori, A.: 2001b, “Methodological Options for an Integrated Perspective on Organization”, Human Relations. Special Issue ‘Towards Integrating the Social Sciences’ 51(1): 37–47.Google Scholar
  25. Grandori, A. and M. Neri: 1998, “The Fairness Properties of Networks”, in A. Grandori (ed.), InterFirm Networks: Organization and Industrial Competitiveness (London: Routledge).Google Scholar
  26. Grant, R.M.: 1996, “Toward a Knowledge-Based Theory of the Firm”, Strategic Management Journal (Winter Special Issue) 17: 109–122.Google Scholar
  27. Haas, P.: 1992, “Introduction: Epistemic Communities and International Policy Coordination”, International Organization 46(1).Google Scholar
  28. Hayek, F. von: 1945, “The Use of Knowledge in Society”, American Economic Review (September) 35: 519–530.Google Scholar
  29. Heyligen, F.: 1992, “Marking Thoughts Explicit: Advantages and Drawbacks of Formal Expression”, Submitted to Journal of Applied Psychology.Google Scholar
  30. Kogut, B. and U. Zander: 1996, “What Firms Do? Coordination, Identity and Learning”, Organization Science (Sept-Oct) 7(5): 502–518.Google Scholar
  31. Laursen, K. and V. Mahnke: 2001, “Knowledge Strategies, Firm Types, and Complementarity in Human-Resource Practices”, Journal of Management and Governance 5(1): 1–22.Google Scholar
  32. Lawrence P. and J. Lorsch: 1967, Organization and Environment (Harvard Business School).Google Scholar
  33. Lipparini, A.: 1998, Competenze organizzative (Bologna: Il Mulino).Google Scholar
  34. Lipparini, A. and A. Lomi: 1999, “Interorganizational Relations in the Modena Biomedical Industry. A Case Study in Local Economic Development”, in A. Grandori (ed.), Inter-firm Networks Organization and Industrial Competition (London: Routledge).Google Scholar
  35. Lütz, S.: 1997, “Learning Through Intermediaries: The Case of Inter-Firm Research Collaborations ≫”, in M. Ebers (ed.), The Formation of Inter-Organizational Networks (New York: Oxford University Press).Google Scholar
  36. Mariotti, S.: 1984, “Le strutture di governo delle transazioni nel processo di internazionalizzazione delle imprese”, Economia e Politica Industriale 41: 65–105.Google Scholar
  37. Milgrom, P. and J. Roberts: 1995, “Complementarities and Fit: Strategy, Structure and Organizational Change in Manufacturing”, Journal of Accounting and Economics 19: 179–208.Google Scholar
  38. Nonaka, I. and F. Corno (eds.): 1999, “Knowledge Creation in Districts”, Journal of Management and Governance, Special Issue (3/4).Google Scholar
  39. Noteboom, B.: 1998, “The Dynamic Efficiency of Networks”, in A. Grandori (ed.), Inter-firm Networks Organization and Industrial Competition (London: Routledge).Google Scholar
  40. Noteboom, B.: 1999, Inter-Firm Alliances (Oxford: Oxford University Press).Google Scholar
  41. Orlean, A.: 1989, “Pour une approche cognitive des conventions, economiques”, Revue Economique 40(2): 241–272.Google Scholar
  42. Polanyi, M.: 1958, Personal Knowledge (London: Routledge).Google Scholar
  43. Polanyi, M.: 1967, The Tacit Dimension (London: Routledge).Google Scholar
  44. Powell, W.: 1996, “Inter-Organizational Collaboration in the Biotechnology Industry”, Journal of Institutional and Theoretical Economics 152(1): 197–215.Google Scholar
  45. Pruitt, D.G.: 1983, “Achieving Integrative Agreements”, in M.H. Bazerman and R.J. Lewicki (a cura di), Negotiating in Organizations (Beverly Hills, CA: Sage).Google Scholar
  46. Saxenian, A.L.: 1990, “Regional Networks and the Resurgence of Silicon Valley”, California Management Review 33(1): 89–112.Google Scholar
  47. Schrader, S.: 1991, “Informal Technology Transfer Between Firms: Cooperation Through Information Trading”, Research Policy 2: 153–170.Google Scholar
  48. Simon, H.A.: 1945, Administrative Behavior (New York: Free Press).Google Scholar
  49. Simon, H.A.: 1962, “The Architecture of Complexity”, Proceedings of the American Philosophical Society 106: 467–482.Google Scholar
  50. Simon, H.A.: 1996, An Empirically Based Microeconomics, Lezioni Raffaele Mattioli (Oxford: Oxford University Press).Google Scholar
  51. Simonin, B.L.: 1999, “Ambiguity and the Process of Knowledge Transfer in Strategic Alliances”, Strategic Management Journal 20: 595–623.Google Scholar
  52. Suarez-Villa, L. and R. Rama: 1996, “Outsourcing, R&D and the Pattern of Intra-Metropolitan Location: The Electronics Industries of Madrid”, Urban Studies 33(7): 1155–1197.Google Scholar
  53. Susman, G.I.: 1976, Autonomy at Work (New York: Praeger).Google Scholar
  54. Takeishi, A.: Forthcoming, “Knowledge Partitioning in the Inter-Firm Division of Labor: The Case of Automotive Product Development”, Organization Science. Special Issue ‘Knowledge, Knowing and Organization’.Google Scholar
  55. Thompson, J.D.: 1967, Organization in Action (New York: McGraw-Hill).Google Scholar
  56. Trist, E.L., G.W. Higgin, H. Murray and A.B. Pollock: 1963, Organizational Choice (Londra: Tavistock).Google Scholar
  57. Turati, C.: 1998, Il caso Minnesota Minging and Manufacturing (Università Bocconi).Google Scholar
  58. Weick, K.: 1979, “Cognitive Processes in Organizations”, Research in Organizational Behavior 1: 41–74.Google Scholar
  59. Williamson, O.E.: 1975, Markets and Hierarchies: Analysis and Antitrust Implications (New York: Free Press).Google Scholar
  60. Williamson, O.E.: 1981, “The Economics of Organization: The Transaction Cost Approach”, American Journal of Sociology 87: 548–577.Google Scholar
  61. Williamson, O.E.: 1991, “Comparative Economic Organization: The Analysis of Discrete Structural Alternatives”, Administrative Science Quarterly (June) 36: 269–296; and in S. Lindenberg and H. Schreuder (eds.), Interdisciplinary Perspectives on Organization Studies (Pergamon Press, 1993), pp. 3-37.Google Scholar
  62. Williamson, O.E.: 1993, “Transaction Cost Economics and Organization Theory”, Industrial and Corporate Change 2(2): 107–156 (Oxford University Press).Google Scholar
  63. Zenger, T.R. and W.S. Hesterley: 1998, “The Disaggregation of Corporations: Selective Intervention, High Powered Incentives and Molecular Units”, Organization Science 8(3): 209–222.Google Scholar

Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • Anna Grandori
    • 1
  1. 1.Center of Research on Business Organization (CRORA)Bocconi University, MilanMilanoItaly

Personalised recommendations