The Economic Theory of Organizations: What It Is and What It Isn’t

Kathleen A. Carroll

Chapter 2 in Property Rights and Managerial Decisions in For-profit, Nonprofit, and Public Organizations, 2004, pp 13-26 from Palgrave Macmillan

Abstract: Abstract The economic theory of organizations began with research on the theory of the firm as a unit of production in a perfectly competitive market economy. This area of research has since expanded to consider the firm as a complex organization of production. This work mainly has been concerned with the corporation as the primary for-profit form of the firm in a developed economy. Research in this area more recently also has been extended to other types of organizations that are not clearly or exclusively profit oriented. The two major classifications of organizations of production that have been of increasing interest are public (that is, government) organizations and private nonprofit organizations. The focus of this research has been on the role of public sector and nonprofit organizations as producers of goods and services in a competitive market economy. This chapter reviews the major elements of the economic theory of organizations as it has developed so far and sorts out what this research includes (what it is) and its limitations (what it isn’t).

Keywords: Economic Theory; Transaction Cost; Organizational Form; Nonprofit Organization; Managerial Theory (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-4039-4809-0_2

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DOI: 10.1057/9781403948090_2

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