The spatial configuration of the firm and the management of sunk costs
In this paper we explain why the modern corporation may persist with a decentralized system of plants differentiated by the vintage of capital and the style of management. Our goal is to show how and why firms are, at once, structured by the inherited configuration of capital and also reproduce diff...
| প্রধান লেখক: | , |
|---|---|
| বিন্যাস: | Journal article |
| ভাষা: | English |
| প্রকাশিত: |
Clark University
1997
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| বিষয়গুলি: |
| _version_ | 1826266354212143104 |
|---|---|
| author | Clark, G Wrigley, N |
| author_facet | Clark, G Wrigley, N |
| author_sort | Clark, G |
| collection | OXFORD |
| description | In this paper we explain why the modern corporation may persist with a decentralized system of plants differentiated by the vintage of capital and the style of management. Our goal is to show how and why firms are, at once, structured by the inherited configuration of capital and also reproduce differentiation within and outside the corporation. To do so, we use concepts and principles drawn from modern financial theory to show that a spatially differentiated configuration of production may have advantages for the firm in terms of the risk-adjusted flow of revenue, strategic options in relation to actual and potential competitors, and the management of sunk costs. Our argument focuses on the modern corporation, characterized by a separation between ownership and control as well as a dependence upon internal stakeholders for the realization of planned revenue and output targets. We argue that our framework can help theorists account for the persistence of interfirm and interindustry differences in capital profiles, despite a common presumption in favor of convergence around a simple, efficient industry standard. While the paper is an exercise in theory, it is based upon our previously published studies of corporate restructuring in manufacturing and retail industries in the United States and the United Kingdom. |
| first_indexed | 2024-03-06T20:37:38Z |
| format | Journal article |
| id | oxford-uuid:3327d5ce-9c11-497e-b87c-f8902a58d8a1 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T20:37:38Z |
| publishDate | 1997 |
| publisher | Clark University |
| record_format | dspace |
| spelling | oxford-uuid:3327d5ce-9c11-497e-b87c-f8902a58d8a12022-03-26T13:18:40ZThe spatial configuration of the firm and the management of sunk costsJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:3327d5ce-9c11-497e-b87c-f8902a58d8a1EconomicsGeographyEnglishOxford University Research Archive - ValetClark University1997Clark, GWrigley, NIn this paper we explain why the modern corporation may persist with a decentralized system of plants differentiated by the vintage of capital and the style of management. Our goal is to show how and why firms are, at once, structured by the inherited configuration of capital and also reproduce differentiation within and outside the corporation. To do so, we use concepts and principles drawn from modern financial theory to show that a spatially differentiated configuration of production may have advantages for the firm in terms of the risk-adjusted flow of revenue, strategic options in relation to actual and potential competitors, and the management of sunk costs. Our argument focuses on the modern corporation, characterized by a separation between ownership and control as well as a dependence upon internal stakeholders for the realization of planned revenue and output targets. We argue that our framework can help theorists account for the persistence of interfirm and interindustry differences in capital profiles, despite a common presumption in favor of convergence around a simple, efficient industry standard. While the paper is an exercise in theory, it is based upon our previously published studies of corporate restructuring in manufacturing and retail industries in the United States and the United Kingdom. |
| spellingShingle | Economics Geography Clark, G Wrigley, N The spatial configuration of the firm and the management of sunk costs |
| title | The spatial configuration of the firm and the management of sunk costs |
| title_full | The spatial configuration of the firm and the management of sunk costs |
| title_fullStr | The spatial configuration of the firm and the management of sunk costs |
| title_full_unstemmed | The spatial configuration of the firm and the management of sunk costs |
| title_short | The spatial configuration of the firm and the management of sunk costs |
| title_sort | spatial configuration of the firm and the management of sunk costs |
| topic | Economics Geography |
| work_keys_str_mv | AT clarkg thespatialconfigurationofthefirmandthemanagementofsunkcosts AT wrigleyn thespatialconfigurationofthefirmandthemanagementofsunkcosts AT clarkg spatialconfigurationofthefirmandthemanagementofsunkcosts AT wrigleyn spatialconfigurationofthefirmandthemanagementofsunkcosts |