Coase: why organisations exist at all
Every time you ask for something from outside, you pay not only in money but in the time it takes to agree: how many messages, how many days, how many reminders. Sometimes it is cheaper to hold the job inside.
The expensive part in a club is not the service but the twenty messages, the two weeks of waiting and the one arrangement that fell through — Coase calls that the cost of using the price mechanism.
List ten pieces of work from last month and mark which were done inside the club and which you asked for outside. Against the outside ones write how many days agreeing took, and turn the most expensive into a named role this month.
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These works are related to the one you just read — and not by accident:
same competency: Economics of the organisation
same competency: Economics of the organisation
same competency: Economics of the organisation
same competency: Economics of the organisation
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The same work written at length: what it claims and what its evidence is worth.
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- Coase's Nobel lecture (1991) — his own summary of the theory of the firm
- The Nobel Prize — Ronald Coase (1991)
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