Firms as Connected, Temporary Coalitions: Organisational Forms and the Exploitation of Intellectual Capital

Abstract

The paper presents the case for conceptualising firms as 'connected temporary coalitions' that are able to respond to the challenges of and adapt to, changing environments: in particular, to build, exploit and determine the value of Intellectual Capital (human, structural and relational) enabling different trajectories of renewal and growth in the long term. The paper adopts the perspectives of theoretical pluralism to identify distinctive viewpoints regarding the theory of the firm and the dynamic nature of knowledge. The study draws on four areas of theory: (a) the institutionalist ideas of New Regionalism in economic geography — in particular the conceptualisation of firms as temporary, dynamic, place‑ based coalitions; (b) the structural contingency model of organisation theory coupled with ideas from the knowledge based theory of the firm in exploring changes over time in business activity; (c) evolutionary economics and the perspective it offers on emergent developments, change and time; and (d) knowledge management thinking, and the perspective it provides on intellectual capital and its contribution to firm dynamics, drawing on ideas on social interaction, social practices, social contexts, and the impacts of power and control. The paper extends our understanding of the processes and dynamics operating in and around temporary coalitions, the shifting and reconfiguring of knowledge assets and the role of dynamic capabilities. In addition, the paper challenges earlier concepts of intellectual capital as being embedded in business clusters. The paper argues that, collectively, the coalitions of people that comprise firms deploy their knowledge assets through different forms of organisational arrangement to achieve temporary equilibrium in order to commercialise knowledge, achieve renewal and generate growth. This perspective on the firm has significant policy implications.