Barney, Jay B. and Ouchi, William G., eds. Organizational Economics. San Francisco, CA.: Jossey-Bass, 1986.

All important management decisions are simultaneously social and economic. Economic questions about strategy, manufacturing, and finance are bound up with social questions about organizational change, culture, and management style. But rather than treating organizational pheomena as a combination of social and economic issues, organization theorists and microeconomists have typically ignored these aspects that do not fit within their own areas. As a result, these fields have developed in isolation, each largely unaware of the insights the other could offer about organizations and organizational actions.

In this book, Jay B. Barney and William G. Ouchi bring together two fields that have long been separate — microeconomics and organization theory — to offer a more complete understanding of organizations and how they work. They show organization theorists how a working knowledge of economics can help them address some of the most fundamental questions in organization theory, including: What is an organization? Why does it exist? What are its boundaries? And they help economists define the structure of what is still an emerging subdiscipline-organizational economics.

To assist specialists in organizational theory, behavior, and development in understanding the impact of organizational economics on the analysis of organizations, the editors present fifteen innovative and classic works in economics by such scholars as Armen A. Alchian, Michael E. Porter, R. H. Coase, David J. Teece, Harold Demsetz, and Oliver E. Williamson. The editors discuss in detail the major economic theory or issue covered in each reading, summarize its conclusions or findings, and clearly define technical concepts using terms that are easily understood by noneconomists.

They then examine the importance and implications, many of them revolutionary, of the works for the fields of organizational behavior, development, and theory. Finally, Barney and Ouchi suggest how economic ideas can be applied to develop a new paradigm for organizational theory and practice.