Division Of Labor, Cooperation And Evolution Of Firm

Division of Labor, Cooperation and Evolution of Firm: A General Theory and an Analysis of the Firm's Governance in Knowledge SocietyThis thesis is a cross-study based on economics and management theory. In detail, the thesis is on claim to the firm theory which can be studied from the point of division of labor and cooperation. Being an important theory branch of modern micro-economics, the theory of the firm originated in 1930s, from The Nature of the Firm, which is written by Coase in 1937. But since then, the theory of the firm had not advanced further until 1970s. Then its value was gradually acknowledged by many scholars, who followed the two clues to study the theory of the firm from different point of view. Its research object mainly includes two related aspects - the nature and inner structure of the firm. The former indicates the origin and the relationship between the firm and the market, which was set up by Coase; the latter indicates the principal-agent relationship and incentives, which was developed by Berle and Means. After 1970s, its rapid development made the theory of the firm the vanguard field in modern economics.The theory of the firm, however, is not perfect up to now. It has two main lacks. Firstly, this theory has not formed a complete theoretical system. Almost all the academic schools and theoretical branches study the firm only from their own aspects, while keep up a logical congruity and compatibility is overlooked. Secondly, the theory of the firm, strictly speaking, has not disclosed how the firm comes forth. Transaction cost is only a tool to compare two different governances - the firm and the market. In another words, in this framework, the firm is not a result of comparison, but an option already existing before comparing. For this reason, the theory of the firm is not studying the firm historically, and its method is static while the firm is evolving. The purpose of the thesis is to build up a systematic and logical framework of the firm theory.Having re-examined classical economics, I find there is so many deep thoughts which guiding direction of research. According to classical economics represented by Adam Smith, division of labor can increase the efficiency of production. The firm is connected with division of labor in society, and itself is also the organization of internal division. Thus, division of labor (including division of labor in society and in firm) is the key point to explain the nature and internal structure of the firm. Furthermore, division of labor is concerned not only with the relationship between human beings and the nature, but also with that between human beings. The further specialization goes, the more important cooperation will be. Therefore, cooperation is what must be studied. The theory of transaction costs has already disclosed most important points of people's behavior in their transactions as well as in their productions.Accordingly, comparing the economies of specialization with transaction costs will be the main theoretical method in this thesis. Using the concepts and analytical tools of division of labor and cooperation, I propose a general theory about the nature of the firm; and with the same logic, I show the origin and evolution of the firm, and the inner structure of the firm. Thereupon, the firm is not only explained within the same logical framework, but also accords with the history. Dynamically, there is a process of specialization when people adopt more specialized form of production, and there is more need of cooperation. In every step of change, people will compare the economies of specialization with transaction costs, then the method with the most margin will be selected. While operation, new specializing will emerge, then new method selected and the firm evolving. In the knowledge society, several new forms of the firm emerge. Up to now, however, it lacks a set of theories based on the theory of the firm for...