/ STRATEGIZING, ECONOMIZING, AND ECONOMIC ORGANIZATION

best strategy. That is not to say that strategizing efforts to deter or defeat rivals with clever ploys and positioning are unimportant. In the long run, however, the best strategy is to organize arid operate efficiently. Business strategy is a complex subject. It not only spans the functional areas in businessmarketing, finance, manufacturing, international business, etc.-but it is genuinely interdisciplinary-involving. as it does, economics, politics, organization theory, and aspects of the law. Business strategy has become increasingly important with the growth of the multinational enterprise and of international trade and competition. Although several different approaches to the substantive aspects of business strategy can be distinguished, the main contestants cluster under two general headings: strategizing and economizing. The first of these appeals to a power perspective; the second is principally concerned with efficiency. Both of these orientations are pertinent to the study .of business strategy, but power approaches have played a role in the recent business strategy literature that belies its relative importance. Partly that may be because the analysis of efficiency is believed to have reached such an advanced state of development that further work of this kind is not needed. Economizing is important, but we know all about that. What we don’t understand, and need to study, goes the argument, is strategizing. Not only is strategizing where many of the novel practices and new issues are said to reside, but the pressing realities of foreign competition are first and foremost of a strategizing kind. I take exception with arguments of both kinds. Thus, although it is true that efficiency analysis of the firm-as-production function genre has reached a high state of refinement, that does not exhaust all that is relevant to the assessment of efficiency. Efficiency analysis properly encompasses governance costs as well as production costs, and the analysis of comparative economic organization (governance) is still in