The Contract Paradigm as a Component of the Institutional Theory of the Firm: Search for Methodological Ways to Improve
A qualitative analysis of the constituent elements of the contractual paradigm, which is the result of a neo-institutional analysis of the market environment, requires a systematic approach. The main purpose of the article is to search for new methodological ways to improve the contract paradigm wit...
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| Format: | Article |
| Language: | English |
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Zhytomyr Polytechnic State University
2024-08-01
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| Series: | Економіка, управління та адміністрування |
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| Online Access: | http://ema.ztu.edu.ua/article/view/308967 |
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| author | Yu. Ushchapovskyi |
| author_facet | Yu. Ushchapovskyi |
| author_sort | Yu. Ushchapovskyi |
| collection | DOAJ |
| description | A qualitative analysis of the constituent elements of the contractual paradigm, which is the result of a neo-institutional analysis of the market environment, requires a systematic approach. The main purpose of the article is to search for new methodological ways to improve the contract paradigm with the use of axiological aspects and the systemic approach of the methodology of traditional institutionalism.
The features of the contractual paradigm of the theory of the firm built on the methodological platform of neoclassicism are investigated. A comparative analysis of market contracting with labor contracting in the context of saving on transaction costs is carried out. It is noted that the emphasis in the theory of the firm has shifted to the analysis of the external institutional environment, to the achievement of welfare through the specification of property rights.
The importance of the principal-agent model for understanding the neoclassical theory of the firm, which raised the problem of agency relations in the context of separating managerial functions from ownership functions in the context of limited information, is clarified. It is emphasized that the main contribution of Alchian and Demzetz to the contractual paradigm was the formulation of the problem of incentives arising within the firm.
Attention is focused on the differences between a conventional market contract and a contract for hire. It is noted that the possibility of sanctioning opportunistic behavior is important for understanding the theory of the firm as a relationship of hire.
It is established that specific assets are of particular importance when choosing the form of contract and the appropriate way of organizing the transaction. A systematic approach to the contractual paradigm based on the methodology of traditional institutionalism will allow avoiding the one-sidedness of the principal-agent model, which absolutizes agency relations in the theory of the firm, and avoiding giving primary importance to certain qualitative components of the institutional system, such as transaction costs.
The necessity of creating a contract paradigm on the extended methodological platform of neoclassicism and traditional institutionalism, especially in terms of contracts related to labor recruitment, is substantiated; the holism of traditional institutionalism and system analysis can expand the possibilities of specifying human assets and become the basis for studying the opportunistic behavior of an individual in the contract paradigm. |
| format | Article |
| id | doaj-art-c1925a057bfa4a70b8ece0e07f14f508 |
| institution | OA Journals |
| issn | 2664-245X 2664-2468 |
| language | English |
| publishDate | 2024-08-01 |
| publisher | Zhytomyr Polytechnic State University |
| record_format | Article |
| series | Економіка, управління та адміністрування |
| spelling | doaj-art-c1925a057bfa4a70b8ece0e07f14f5082025-08-20T02:02:29ZengZhytomyr Polytechnic State UniversityЕкономіка, управління та адміністрування2664-245X2664-24682024-08-012108313610.26642/ema-2024-2(108)-31-36The Contract Paradigm as a Component of the Institutional Theory of the Firm: Search for Methodological Ways to ImproveYu. Ushchapovskyi0https://orcid.org/0000-0001-5898-5824Yu. UshchapovskyiA qualitative analysis of the constituent elements of the contractual paradigm, which is the result of a neo-institutional analysis of the market environment, requires a systematic approach. The main purpose of the article is to search for new methodological ways to improve the contract paradigm with the use of axiological aspects and the systemic approach of the methodology of traditional institutionalism. The features of the contractual paradigm of the theory of the firm built on the methodological platform of neoclassicism are investigated. A comparative analysis of market contracting with labor contracting in the context of saving on transaction costs is carried out. It is noted that the emphasis in the theory of the firm has shifted to the analysis of the external institutional environment, to the achievement of welfare through the specification of property rights. The importance of the principal-agent model for understanding the neoclassical theory of the firm, which raised the problem of agency relations in the context of separating managerial functions from ownership functions in the context of limited information, is clarified. It is emphasized that the main contribution of Alchian and Demzetz to the contractual paradigm was the formulation of the problem of incentives arising within the firm. Attention is focused on the differences between a conventional market contract and a contract for hire. It is noted that the possibility of sanctioning opportunistic behavior is important for understanding the theory of the firm as a relationship of hire. It is established that specific assets are of particular importance when choosing the form of contract and the appropriate way of organizing the transaction. A systematic approach to the contractual paradigm based on the methodology of traditional institutionalism will allow avoiding the one-sidedness of the principal-agent model, which absolutizes agency relations in the theory of the firm, and avoiding giving primary importance to certain qualitative components of the institutional system, such as transaction costs. The necessity of creating a contract paradigm on the extended methodological platform of neoclassicism and traditional institutionalism, especially in terms of contracts related to labor recruitment, is substantiated; the holism of traditional institutionalism and system analysis can expand the possibilities of specifying human assets and become the basis for studying the opportunistic behavior of an individual in the contract paradigm.http://ema.ztu.edu.ua/article/view/308967transaction costsasset specificationsystems approachcontractual paradigmfirm theory |
| spellingShingle | Yu. Ushchapovskyi The Contract Paradigm as a Component of the Institutional Theory of the Firm: Search for Methodological Ways to Improve Економіка, управління та адміністрування transaction costs asset specification systems approach contractual paradigm firm theory |
| title | The Contract Paradigm as a Component of the Institutional Theory of the Firm: Search for Methodological Ways to Improve |
| title_full | The Contract Paradigm as a Component of the Institutional Theory of the Firm: Search for Methodological Ways to Improve |
| title_fullStr | The Contract Paradigm as a Component of the Institutional Theory of the Firm: Search for Methodological Ways to Improve |
| title_full_unstemmed | The Contract Paradigm as a Component of the Institutional Theory of the Firm: Search for Methodological Ways to Improve |
| title_short | The Contract Paradigm as a Component of the Institutional Theory of the Firm: Search for Methodological Ways to Improve |
| title_sort | contract paradigm as a component of the institutional theory of the firm search for methodological ways to improve |
| topic | transaction costs asset specification systems approach contractual paradigm firm theory |
| url | http://ema.ztu.edu.ua/article/view/308967 |
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