Organisational economics and organisation theory

Abstract

Organisation theorists and organisational economists tend to see each other as belonging to more unified camps than they really do. To be blunt, some organisation theorists try to lump all organisational economists together so that they can all be dismissed out of hand. On the other hand, organisational economists will often take one or two leading organisation theorists as representative, so that they can say they have taken organisation theory into account. Oliver Williamson (1990, p. 5) is a good example of a prominent organisational economist who tends to see organisation theory as more unified than it is. He seems to believe that organisation theory is derived from a few classic texts starting with Chester Barnard’s The Functions of the Executive (1964 [1938]), followed by Herbert Simon’s Administrative Behavior (1976 [1945]) and Philip Selznick’s Leadership in Administration (1957). This clearly reflects an American bias. More importantly, it obscures the diversity within organisation theory.