Structuring the Boundaries of the Firm

  • Theresia TheurlEmail author
  • Eric Meyer


The boundaries of the firm have been part of economic analysis since Ronald Coase’s seminal paper on the nature of the firm. Subsequently numerous theories and explanations of the boundaries have evolved. New information and communication technology are now changing these boundaries which become increasingly blurred. Boundaries have turned to be “bounding areas” and companies interact in multiple ways. Knowledge about where these bounding areas are and how to design them has become highly relevant for companies’ success. The article shows what determines the boundary areas and how they can be organized by applying existing theories of the firm like to this problem. These theories provide guidelines for the design and the management of the boundaries of the firm.


Boundaries of the firm Cooperation 


  1. Alchian, A. A., & Demsetz, H. (1972). Production, information costs, and economic organization. The American Economic Review, 62(5), 777–795.Google Scholar
  2. Aoki, M., Gustafsson, B., & Williamson, O. E. (1990). Firm as a Nexus of Treaties. SAGE Publications.Google Scholar
  3. Barney, J. (1995). Looking inside for competitive advantage. Academy of Management Executive, 9(4), 49–61.Google Scholar
  4. Coase, R. H. (1937). The nature of the firm. Economica.Google Scholar
  5. Hart, O. (1995). Firms, contracts, and financial structure. Oxford: Oxford University Press.CrossRefGoogle Scholar
  6. Jensen, M., & Meckling, W. (1976). The theory of firm: managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.CrossRefGoogle Scholar
  7. Malone, T. W. (2004). The future of work: How the new order of business will shape your organization, your management style, and your life. Harvard Business Review Press.Google Scholar
  8. Porter, M. E. (1985). The competitive advantage: Creating and sustaining superior performance. New York: Free Press.Google Scholar
  9. Reve, T. (1990). The firm as nexus of internal and external contracts. The firm as a nexus of treaties (pp. 133–161). London: SAGE Publications.Google Scholar
  10. Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5(2), 171–180.CrossRefGoogle Scholar
  11. Williamson, O. E. (1978). Markets and hierarchies. New York: Free Press.Google Scholar
  12. Williamson, O. E. (1985). The economic institutions of capitalism. New York: Free Press.Google Scholar
  13. Zadeh, L. A. (1965). Fuzzy sets. In Information and Control.CrossRefGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.University of MuensterMünsterGermany

Personalised recommendations