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School of Business professor attends research symposium in honor of Nobel Prize winner

Sunday, January 10, 2010

BY FELONIZ LOVATO-WINSTON

On December 4, 2009, at the BI Norwegian School of Management in Oslo, Professor Oliver E. Williamson, a trailblazer in institutional economics, delivered the keynote presentation at a symposium in honor of his recent Nobel Prize. The event was attended by a small number of researchers whose work has been similarly influential in the field of transaction cost economics (TCE). KU School of Business professor Laura Poppo was among the chosen few.

The fact that Poppo, a strategic management professor, was invited to a symposium reserved for leading economists and scholars advancing TCE is a testament to the interdisciplinary aspects of her research. It's a trait she shares with the Nobel Prize winner himself. Both professors have spent their careers examining the benefits and limitations of markets and firms, expanding their research to include other academic areas. "This is why Williamson's work is so significant." says Poppo, "His research has influenced many disciplines outside of economics - marketing, strategic management, international business, organizational theory - many other disciplines reference his work."

Although Poppo was invited to the symposium specifically because of her contributions to Williamson's specialty, TCE, this wasn't her first encounter with the Nobel Prize winner. She met him 15 years ago while teaching at Washington University, where Williamson was a guest lecturer. Williamson also reviewed a recent publication of Poppo's, which makes sense, given the influence his research has had on her own work. "I have spent most of my career examining empirically whether Williamson's claims are supported or not," says Poppo "and how his ideas should be expanded to better explain the phenomenon."

During the keynote address, Poppo was struck by their complementary research styles. Williamson encouraged his fellow scholars to know a chosen field well, have an active, open mind and, most importantly, explore the interdisciplinary aspects of their research. "I thought it was interesting that my approach to research has been similar," says Poppo, "I know transaction cost economics well; yet I also complemented this area with sociology, especially those perspectives related to the kind of problems addressed by transaction cost economics."

The study of TCE lends itself well to interdisciplinary study. According to Poppo, TCE examines the role of firms in an economy, and how firms can actually exist as hierarchical organizations which coordinate specialized transactions more efficiently than markets. "Williamson's research proposed why a large firm could and should exist," says Poppo, "because markets fail. Prior to this time, economists believed that markets were the optimal form of organization and firms were incidental." Because TCE examines firms as organizational structures that can have a positive, regulatory impact on the economy, it is easy to see why a strategic management professor would be able to explore and make significant contributions to TCE research. In fact, it is Poppo's research in TCE that led to the invitation to the Nobel Prize symposium.

Although most of the symposium was dedicated to Williamson's influential research, Poppo did have the opportunity to hear some funny anecdotes about Williamson's strict approach to Ph.D. advising. "Several of his students spoke at the symposium, and shared great stories of how Williamson pushed his students relentlessly and was not Ônice' at all. In fact, he was intimidating and demanding!"

Oliver E. Williamson is an Edgar F. Kaiser Professor Emeritus of Business, Economics and Law at the University of California Berkeley. According to the Nobel Prize website, he received the 2009 Nobel Prize in Economics for "his analysis of economic governance, especially the boundaries of the firm." Professor Williamson shares the prize with Elinor Ostrom of Indiana University...