The New Industrial Organization

Resumen

Economic Activity takes two alternative forms: the Market and the Firm. Economics is a social science that tries to explain how to generate wealth and how it is distributed. The firm is a social organization whose members decide to cooperate to generate wealth and its distribution among the stakeholders. They certainly share a common goal. However, to translate economic principles to management is an open challenge. Traditional IO as understood among the economists deals with the generation of wealth through the market, which if it is well designed will achieve a fair distribution through endogenous dynamics towards equilibrium. On the other hand, a proper theory of the firm needs explicit rules of governance and operations. This fact requires a New I.O dealing with uncertainty far beyond probability; individual and collective bounded rational agents; specialization and heterogeneity; imperfect information and variety; incentives and penalties to avoid free riding, and how to develop core competences such as entrepreneurship, innovation and knowledge management. The paper revised I.O and ends up with a map of Management Sciences to help designing the Management Engineering curricula and the range of specific skills and competences demanded by different institutions