Firm development as an integrated process: with evidence from the General Motors–Fisher Body case

Abstract

This paper argues that an adequate approach to the firm should be able to accommodate the complexities of actual firm development. The latter is conceptualized in terms of three general stages: prime movers or drivers of change, change processes, and change attractors. Furthermore, any "real-world" firm is both a technical and an institutional unit. To emphasize the importance of "real firm" analysis, the discussion presented here revolves around an understanding of the much considered case of General Motors and Fisher Body integration has developed over time. Generalization from this case suggests that an integrated view of the firm is necessary that combines the three stages and the two bases (technical and institutional). Six general perspectives on the firm are identified as having technical or institutional bases that are relevant in each of the three stages. This integrated approach to the firm is explored in terms of the general topic of firm development. It is concluded that, without an integrated approach to firm development, a potentially biased or incomplete analysis can result.

Strategic management and the economics of the firm

“…Some time ago Coase (1937) suggested that we should analyse firms as they exist in the real world. This idea is pursued by Dietrich and Krafft (2011) when they suggest that real firms are obviously both institutional and technical objects. The institutional analysis covers matters such as boundaries, organization and the like.…”