Boundary Decisions of the Firm: Make, Buy, Cooperate

IMP Journal, 8 (1), pp. 14-21

9 Pages Posted: 11 May 2017

See all articles by Filipe Sousa

Filipe Sousa

Universidade da Madeira - Gestao e Economica

Date Written: May 10, 2014

Abstract

Firms are not atomistic hierarchies only linked with one another at arm’s-length distance in markets. Instead, a myriad of long-lived, highly cooperative relationships between suppliers and customers are pervasively found in the B2B world. And it is within those enmeshed relationships and networks that the co-evolution of capabilities and business specialisms is brought about and developed.

If that is the actual ‘topography’ of the business landscape, then the coordination of economic activities in general, and the boundary decisions of each and every firm in particular, are unlikely to be reduced to a (dual) choice between ‘making’ or ‘buying’. Inter-firm cooperation is in itself a third governance structure, in alternative to the hierarchical and the market modes of coordination. And, what is also equally important to note, it is through the make-or-buy-or-cooperate decisions that the (embedded) firm is able to change its nature and scope, redefine its (fuzzy) boundaries, and thus adapt to an ever-changing business setting.

Keywords: firm boundaries, hierarchies, markets, networks, cooperation, make-or-buy decisions

JEL Classification: L14, L23, L25

Suggested Citation

Sousa, Filipe, Boundary Decisions of the Firm: Make, Buy, Cooperate (May 10, 2014). IMP Journal, 8 (1), pp. 14-21, Available at SSRN: https://ssrn.com/abstract=2966044

Filipe Sousa (Contact Author)

Universidade da Madeira - Gestao e Economica ( email )

Campus da Penteada
Funchal, Madeira 9000-390
Portugal
+351291705051 (Phone)
+351291705040 (Fax)

HOME PAGE: http://bit.ly/fjmsousa/

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
73
Abstract Views
520
Rank
580,987
PlumX Metrics