Roger Sugden

The Essence of the Modern Corporation: Markets, Strategic Decision‐Making and the Theory of the Firm

Following Coases fundamental concern with planning, this paper highlights strategic decision making as important for distinguishing the essence of the modern large corporation. It is consistent with industrial organization analysis of industries yet provides a novel starting point for the theory of the firm. The authors suggest different boundaries to the organization compared to those identified elsewhere and, whereas others peering into the black box of Walrasian theory merely see more of what is on the outside, they see transactions within and without the firm as fundamentally different. The analysis recognizes Pareto inefficiencies but concludes with an optimistic vision for economic policy. Copyright 1998 by Blackwell Publishers Ltd and The Victoria University of Manchester

Electronic Commerce and the Future for SMEs in a Global Market-Place: Networking and Public Policies

This paper explores three inter-related issues: globalisation; the role of small and medium sized enterprises (SMEs); and electronic commerce (e-commerce). A central question is whether e-commerce offers advantages to SMEs that may facilitate their access to global markets and help them overcome the disadvantages they face vis-à-vis large transnational corporations (TNCs)? The paper starts by briefly considering the extent of globalisation and its relationship to free trade. We then go on to consider recent developments in e-commerce, focusing on the key issue of e-payment systems. Differences in the requirements of large and smaller firms are identified, and we identify a number of key issues concerning access of smaller firms to e-payment systems and the (virtual) market place, and outline their implications for regulatory policy. Our analysis highlights the importance of network externalities, and institutional factors affecting trust and the relationships amongst different economic actors. This leads to a consideration of networking and public policies more broadly. One of the central conclusions of our analysis is that there are important synergies between e-commerce (virtual) networks and (real) production networks. This suggests that policy makers and smaller firms should think in terms of extending existing, and catalysing new, real production networks to incorporate e-payment systems for networks of firms in order to facilitate their access to virtual markets.

Corporate disclosure and the deregulation of international investment

Drawing on evidence of major Western governments’ concerns with the wider economic, social and environmental impact and performance of transnational firms, we argue that recent emphasis on deregulating industrial development, such as in the proposed Multilateral Agreement on Investment and ongoing discussions over a multilateral framework on investment, necessitates a fuller and regulated, rather than voluntaristic, corporate accountability, covering further details of the impact and performance of transnationals.

The internationalisation of production systems: embeddedness, openness and governance

The paper explores the process of production internationalisation of local production systems with a special concern for the tension between embeddedness and openness, and with the governance structure of international networking. Local production systems are prompted to look beyond their local borders by the need to access knowledge, competences, as well as goods and services. Beyond a concern with territory, the possibility of multinational networks has been conceptualised as a mesh of local production systems cemented by production and socioeconomic relations. Drawing on the conceptual hypothesis of multinational networks, the paper proceeds to analyse the process of international outsourcing of Italian industrial districts as an application. The opening up of districts has taken place at the same time as a process of internal hierarchisation due to the emergence of leading groups. The paper reflects on how industrial districts have tended to generate abroad similar forms of agglomerations replicating the industrial district model, as well as presenting some preliminary considerations on the link between the governance of the local production system and the governance of its external networks.

The separation of ownership and control in the theory of the firm: A reappraisal

Abstract Managerialists argue that todays large corporations are either owner or manager controlled. This classification is based upon an ex post analysis of shareholdings: if no cohesive group of shareholders possesses more than a fixed percentage of shares the conclusion is that owners do not have control, which is assumed to pass to managers. This paper counters this approach, arguing: (1) causality runs from control to observed shareholdings, and (2) the observed holdings generally suffice to give a subset of owners control. In so doing the paper also confronts and rejects the neoclassical approach.

Clusters, governance and the development of local economies: a framework for case studies*

Clusters and Globalisation brings together scholars with different perspectives and theoretical groundings, and from different disciplines, to consider conceptual arguments and case study material. In doing so the volume identifies key characteristics and requirements of the forms of cluster that are especially significant for the attainment of economic success in a globalising world.

The Organization of Production and its Publics: Mental Proximity, Market and Hierarchies

Abstract The paper introduces mental proximity as an ideal-type criterion for assessing the organization of production, and positions it as a benchmark alongside markets and hierarchies in a three-dimensional space. Following a Deweyan approach, the criterion is focused on democratic deliberation espoused by necessary values: the rejection of controlling influences, positive freedom, inclusion on equal terms, informed participation, the desire to reach a consensus, sympathy, mutual respect, reciprocity, and continuous learning. We also identify a community network as a complex of people who seek to relate to each other in accord with mental proximity, and discuss influences on their search.

The healthy development of economies: A strategic framework for competitiveness in the health industry

Abstract Applying a strategic decision-making perspective on the economics of business, we suggest that a competitive locality in the health industry is one that, relative to other localities, is effective in: (1) providing the healthcare that enables everyone to participate fully in the democratic development of the locality; (2) providing the healthcare that is democratically identified as a direct objective of this development; (3) contributing through the health industry to any other democratically determined objectives of the localitys development. The paper hypothesizes that strategic decision-making in organizations is an especially significant determinant of the impacts of the health industry. We conclude that: (i) a locality that suffers concentration in the power to determine the objectives of its health industry could not be strictly competitive in that industry; (ii) the first best way to achieve competitiveness in the health industry would be to democratize its strategic decision-making. What this would entail in practice is discussed in some detail.

Creativity and socio‐economic development: space for the interests of publics

Emphasising power in strategic choice, we consider people in actual and potential publics kindling their imagination and ideas in order to shape new directions in the economies in which they have an interest. This paper proposes ‘public creativity forums’, spaces defined by relations aimed at free communication and based upon shared values, including openness. Artistic activities are highlighted as a viaticum for people’s creativity, hence for their potential significance in influencing development in any sector or region. The case of self‐styled Mutoids is presented following original ethnographic research. These prospects are positioned in an analysis of transnational corporations, uneven economic development, choices over globalisation and regional competitiveness.

Clusters and Globalisation

Clusters and Globalisation brings together scholars with different perspectives and theoretical groundings, and from different disciplines, to consider conceptual arguments and case study material. In doing so the volume identifies key characteristics and requirements of the forms of cluster that are especially significant for the attainment of economic success in a globalising world.