Uncertainty, Strategic Decision-making and the Essence of the Modern Corporation: Extending Cowling and Sugden

Abstract

This paper makes a positive contribution to Cowling and Sugden's recent work on the theory of the firm. We focus on their novel definition of the firm as a "means of coordinating production from one centre of strategic decision-making". We extend this definition to account for the fact that strategic decision-makers engaged in the coordination of production operate under conditions of "fundamental uncertainty". The significance of such an extension is that it avoids many of the problems associated with Cowling and Sugden's framework while reinforcing their main conclusions and providing a technical definition of the concept of strategy. Copyright 2001 by Blackwell Publishers Ltd and The Victoria University of Manchester