Boundary Theory Of Firm And Application To Strategic Alliance

This paper summarized and discussed about the essence of severalinfluential boundary theories of firm. Among that the Transaction Costtheory gives others a framework, and is further developed to beTransaction Cost Economics;the Team Production Theory analyzed firm'sboundary problem from the feature of team production and figure out theaffection on firm's boundary by supervision expense and other internalexpenses;the Integration and Quasi-integration Theory focused ondiscussing the integration and quasi-integration between companies basedon criticizing and complimenting TCE while absorbing some other theories;the Firm Capacity Theory is comprised by "knowledge based" and"resource based" two branches, and analyzed the core capacity of a firmand its change from different angles;the Property Right Theoryformularized its conclusions in the basis of incomplete contract,distinguished all the property rights stated in contract and demonstratedthe belonging questions of controlling rights;the Procurement ContractsTheory divided all contracts into two types: "fixed-price" contract and"cost-plus" contract, and it provided theoretical support to decisionmaking with the trade-off relation between encouragement benefit andrenegotiation cost . The above theories have distinct emphasis and standon different sides, complement each other with their own advantages anddisadvantages and form the mainstream of boundary theory of firm together.In the final part, the paper applied above theories to real business lifeand explained strategic alliance through analyzing the benefit ofstrategic alliance and its future developing goal. All these givecompanies which are trying to form strategic alliance some theoreticalguidance.