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Answers to the reading questions on Sociology and Economics - Week 6
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The answers to the reading questions on the article: 'Economics versus Sociological Approaches to Organization Theory'.
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READING QUESTIONS WEEK 66 Sociology and economics: organisation theory
Swedberg - Economics versus Sociological Approaches to
Organization Theory
1. Swedberg considers organisation theory to be interdisciplinary.
Interdisciplinarity presumes that the disciplines are somehow connected. He has
however to admit that “most research on organizations is carried out within
distinct disciplines and according to disciplinary traditions”.
In what way does he hope the connections will be made?
Economists and sociologists view organizations in very different ways. Though
organization theory is interdisciplinary, most research on organizations is carries out
within distinct disciplines and according to disciplinary traditions (Swedberg, 2005). This
is the case with economics and sociology, which both have very different disciplinary
traditions. There is an antagonism between organizational economics and the sociology
of organizations which may be overcome.
Swedberg points out that a small number of people from both economics and sociology
have attempted to deal with the ideas that a new entrepreneurial economy may be out
there. Research in both economics and sociology has taken place to understand what
happens in the entrepreneurial parts of the economy. (Swedberg, 2005)
Until now sociology has ignored entrepreneurship and economics has been unable to deal
with the concept. The sociology of organizations and the emerging sociology of
entrepreneurship belong to two different bodies of work and have failed to come together
(Swedberg, 2005). Recent research has resulted in new insights about entrepreneurship.
From this research and the efforts to understand entrepreneurship Swedberg thinks a
unified theory of the firm will emerge.
Swedberg hopes that a new theory of firms will unite the two key ideas in economics and
sociology respectively: economic interests and social structures. Economics and sociology
can be woven together in the attempt to theorize what happens inside and outside of
firms - especially to capture the structures that firms will have to develop in order to
survive in an entrepreneurial economy. (Swedberg, 2005)
2. What are the core concepts and ideas about organisations in economics?
The firm used to be included in the production function
Now, the firm is seen as a hierarchy and constructed according to the principles of
microeconomics
Markets and firms are alternative methods of coordinating production.
The single organization interacts with other organizations through influential
contacts.
There is a cost for using the market, if this cost exceeds the cost for using a firm,
a firm will in principle be created. (Swedberg, 2005)
A firm will be used when transactions are frequent and demand special
investments
The market will be used when transactions only occur once
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