Hybrids: where are we?

Abstract

We owe Williamson for the formal introduction of hybrid organizations as essential building blocks in ‘the institutional structure of production’. The analysis of these institutional arrangements, which culminated in The Mechanisms of Governance, provided a unified approach to the variety of setting within which transactions are embedded, opening a new perspective on a cornerstone of modern economies. This essay explores the past, present, and future of this breakthrough. First, it reviews the progressive integration of hybrids as a category of their own in the classic ‘make-or-buy’ model, inserting hybrids as an ‘intermediate’ form different from markets in that adaptation cannot be done unilaterally and different from ‘unified organizations’ in that adaptation cannot be done by fiat. Second, it shows how this initial characterization of hybrids, besides providing a coherent approach to empirical research available at the time, gave a powerful impulse to new contributions, identifying more rigorously the fundamental features of hybrids, throwing light on why firms go hybrid, and explicating the governance structure chosen. Last, it offers insights on a research program that remains a work in progress, delineating new terrains to explore and new puzzles to solve.

What is a firm? A reply to Jean-Philippe Robé

“…While a firm might organize a market (many platform companies currently do this), and some market organizations (such as the London Stock Exchange) are legally incorporated, the two concepts remain distinct, even in this context. Similar difficulties are encountered when considering the other discrete structural alternatives studied in transaction cost economics, including various so-called 'hybrid forms' (Ménard, 2014(Ménard, , 2021. On Robé's definition, relational contracts between firms dissolve into relational contracts between organized economic activities.…”

“…We also need to appreciate that the definition of the former must rest on the definition of the latter. As Reinier Kraakman (2001) argued, the existence of corporate groups, multinational enterprises, networks and other complex economic organizations, including those which Claude Ménard (2021) calls ‘hybrid forms’, does not displace the importance of legal form to the structuring of business; it reinforces it. Hence to use the multinational enterprise as a counterexample to our definition of the firm misses the mark completely.…”

Adaptation, adjudication, and private ordering: Contractual Relations through the Williamson Lens

“…Mutually beneficial cooperation presumes some understanding among the relevant parties, but securing those understandings does not necessarily require contracting. Although much of the economics literature uses the term contract for any type of agreement, a contract, properly understood, is a formal (although not necessarily written) legal commitment, a promise for which the parties have recourse to 2 For other, not necessarily incompatible, perspectives on Williamson's contributions to contract theory see Gibbons (2021) and Ménard (2021) in this issue.…”

Comparative Conceptology of Power and Resistance Using Google Ngram Books

“…В еще большей мере это применимо к говорению правды. Подобно выбору между несовершенными вариантами экономической организации: унитарной фирмой, дивизиональной структурой, конгломератом и гибридом [Williamson, 1991, Ménard, 2021, стоит говорить о выборе между несовершенными вариантами государственного устройства, причем не предполагая загодя, подобно У. Черчиллю, преимущество демократии. Делая данный вывод, следует отметить, что правдорубы все же чаще упоминаются в западном, а не российском дискурсе, во всяком случае, на протяжении последних 40 лет.…”