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Standardization, Network Effects And The Evolution Of Business Organizations

Posted on:2004-06-08Degree:DoctorType:Dissertation
Country:ChinaCandidate:P ZhouFull Text:PDF
GTID:1116360122475809Subject:Labor economics
Abstract/Summary:PDF Full Text Request
This dissertation is devoted to studying the firm organization from the perspective of standardization and network effects. On the background of status quo of economic organization and related literatures, the proposition is that standards are important coordination mechanisms in both intra-firm and inter-firm sense. Standardization and network effects cause the evolution of firm organization. Standards can be defined as a kind of institution, which is a mechanism for technological, business and procedure communication. They exist in the selection and diffusion process of technological and organizational changes, and result from the cooperation between the stakeholders and selection. Standards change the market situation and reconfigure market competition process, which influence labor division and firm organization. Thus standards represent an institution, and provide transaction structure, which defines transaction cost and transformation cost.Since standards can lower transaction cost, the optimal scale of firm may therefore fall. At the same time, standards increase the division among the firms. In fact, standards are in some sense a substitute for organizations. Without standards in the market, the transactions will be internalized into the firm, and the standardization in the firm lowers the transaction cost. In the complicated progress of integration disintegration and re-integration, it is standards that function among firms. The firms as islands in the market as an ocean are not completely separated from each other, but related by standards. The principles of market and organization coexist in both forms. The market and firms are the two extremes of a continuum. They are not absolutely separated, but link and interact with each other, which results network structures and many kind of institutional arrangements in both intra-firm and inter-firm sense. There is also a new market thinking here which is so-called "co-opetition". The firms are cooperating in obeying common standards, which originates from the standards competition.Standardization and network effects may result "winner-take-all " phenomenon,while the winner is not certain. From this perspective, the firms will adopt a new competition strategy, the co-opetition strategic behavior.The conclusion is that domestic firms and the government should choose new competition thinking and policy.
Keywords/Search Tags:Standardization, Network Effects, Firm Organization
PDF Full Text Request
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