THE ENDOGENOUS CREATION OF A PROPERTY RIGHTS REGIME: A HISTORICAL APPROACH TO FIRM STRATEGY AND GOVERNANCE STRUCTURE

The definition, delineation, and enforcement of property rights depend on howthewider political and economic environment (or institutional environment) was created and by whom. Organization and management theories implicitly assume this institutional environment is given, fixed, and exogenous to private firms. We challenge this assumption and consider the institutional environment as the result of political struggles between different actors (including private firms) who, if successful in this struggle, will define a particular property rights regime. We maintain that private firms can endogenously create the institutional environment by legitimizing an existing one that protects their property rights or by delegitimizing (and seeking the replacement of) another one that threatens their property rights. Our study combines insights fromhistory, political economy, and organization andmanagement theories and shows the benefits for organization and management scholars of studying long-term processes in light of classic works that sought to understand howpolitical and economic orders were created.