Markets in the Firm: A Market-Process Approach to Management (Hobart Papers) [Paperback]

Tyler Cowen (Author), David Parker (Author)

Book Description

Publication Date: October 1997 | ISBN-10: 0255364059 | ISBN-13: 978-0255364058

Businesses around the world face increasing turbulence in their economic and social environments. The pace of change in market economies seems to be ever accelerating. In this book, the authors consider some of the implications for management of different views of the firm. They point to the need, in these days of global markets and increased uncertainty, for firms to be flexible and responsive to market-place requirements.

Product Details

• Paperback: 100 pages
• Publisher: Coronet Books Inc (October 1997)
• Language: English
• ISBN-10: 0255364059
• ISBN-13: 978-0255364058
• Product Dimensions: 8.3 x 5.3 x 0.3 inches
• Shipping Weight: 3.2 ounces (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #3,433,041 in Books (See Top 100 in Books)

Customer Reviews

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2 of 2 people found the following review helpful:

4.0 out of 5 stars A good synopsis of management practice and theory up to the present, February 11, 2007

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E. Husman "ehusman" (Las Cruces, NM USA) - See all my reviews
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This review is from: Markets in the Firm: A Market-Process Approach to Management (Hobart Papers) (Paperback)

I read this along with Senge's The Fifth Discipline: The Art & Practice of The Learning Organization and Malone's The Future of Work: How the New Order of Business Will Shape Your Organization, Your Management Style and Your Life. The Cowen and Parker book was the most satisfying of the three. For one thing, it summarizes recent economic theorizing about the nature of the firm in a short section. This includes Transaction Cost Analysis, or New Institutional Economics, of which Oliver Williamson's work is the best known. For people interested in it but who don't want to tackle The Economic Institutions of Capitalism, this book is the way to go. They trace the changes in industrial organization from craft production through the Industrial Revolution, Taylorism, and into the modern age. They declare Taylorism to be dead, killed by the intense competition brought by globalism.

The goal of the paper is to introduce the idea that firms are similar to states, Taylorism is analogous to central planning, and modern organizations are starting to look more like a market economy. This was appealing to me in light of something I wrote several months ago. I wrote that Lean production was Hayekian in that it allows people to share information and organizations to learn more quickly. In addition to emphasizing that principle, Cowen and Parker write that firms should try to be more market-like by design by using market-like incentives and clarifying property rights and responsibilities within the firm. They use Koch Industries as an example; Koch actually trademarked the phrase Market-Based Management (R). As the book he co-authored with Norm Bodek seemed especially concerned with the comparative accounting practices of GM (and especially Donaldson Brown) and Toyota, Bill Waddell should be especially interested in one of their closing comments:

"This paper has considered some general principles which are a guide to how market economics can aid management. Future research needs to focus on the internal and institutional impediments to the use of these principles. One particular area that needs exploring is current accounting practices. The development of 'activity-based accounting' appears to be a step in the right direction by allocating joint costs or overheads more effectively so as to identify the true costs of production in carious parts of the firm."

Still, I am dissatisfied with the general sharing of information between management science books like Fifth Discipline and The Future of Work and economic theory. Cowen and Parker mention W. Edwards Deming, but don't elaborate. Markets in the Firm was written in 1997, so they would have had access to many of the Lean canon (they cite The Machine That Changed the World : The Story of Lean Production in the bibliography), but don't explore much of it. If an article mapping Lean methods to transaction cost economics hasn't been written, it needs to be.