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Preferred term

organizational economics  

Definition

  • Organizational economics provides insights into questions such as, Why do organizations exist? What are their boundaries? How do they work? and Why do they behave the way they do? It uses and draws on the theories of transaction cost, agency, property rights, team production, the evolutionary theory of the firm, and business strategy to study and explain organizations and organizational phenomena (e.g., boundaries and the internal working of the firm). Conceptual Overview Traditional economic theories do little to explain why organizations exist and why they are different. [Source: International Encyclopedia of Organization Studies; Organizational Economics]

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https://concepts.sagepub.com/social-science/concept/organizational_economics

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