T-forms of Organization Revisited and A Trans-disciplinary Framework for Institutional Analysis

Author Name AOKI Masahiko  (President, RIETI)
Creation Date/NO. January 2003 03-E-004
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In the first part of this paper, the idea of T-form of organization, as opposed to A-form and J-form, due to O.E.Williamson is revisited. According to him, T denotes temporary, transitional, or timeliness. The paper identifies the clustering of entrepreneurial firms as observed in Silicon Valley as an instance of T-form and examines conditions under which it can be informationally more efficient than the integrated A-form (functional hierarchy) or J-form (information-sharing). It also formulates an essential aspect of the Silicon Valley phenomena as a tournament game among entrepreneurial firm judged by the venture capitalist and explores conditions under which option value and externalities created by the tournament can exceed the cost of multiple financing of firms competing in developmental design. The second part of the paper suggests a game-theoretic approach to broaden the Williamsonian framework for comparative institutional analysis. Specifically it suggests analytical ways to integrate economic, political and sociological approaches to institutions, using linked games and strategic complementarity analysis.