Authority in the case of an Alliance: Questions from the management

Abstract

Authority as a type of power is the characteristic selected by Weber
([1922]1997) for describing the business enterprise. The New Institutional
Economics (NIE) has recognized authority as the explanation for the
existence of the firms because it permits lowering coordination costs
if compared with those of the market. Today, cooperation agreements
or alliances are common and some New Institutional Economists have
considered the costs of structuring the contracts that make them possible
but they have left authority behind and with it, the coordination
of activities in those alliances where no new firm is constituted. This
subject is the one that is considered, and the analysis of one case is the
source for the different questions asked. In the case studied, two parallel
authority structures leave areas in which authority becomes diffuse and
coordination debilitates.