Logic of Economic Organizations: Exchange and Collaboration
Bai Xiaohu1,2, Peng Huanchong3
1.Department of Economics, Party School of Zhejiang Provincial Committee of CPC, Hangzhou 311121, China 2.Innovation and Development Research Institute of the Double-eight Strategy, Party School of Zhejiang Provincial Committee of CPC, Hangzhou 311121, China 3.Department of Economics, Party School of the Central Committee of CPC, Beijing 100091, China
Abstract：The research on economic organizations should not solely focus on their functions and attributes, i.e., the post facto outcomes that emerge once these organizations are established, but also emphasize the preconditions and causes that lead to the internal structural changes within the organization prior to its formation and evolution. This article conceptualizes economic organizations as social entities that facilitate the division of labor and concretize the benefits arising from it. It argues that the framework of division of labor provides a means to address the challenges faced by existing researches, which often struggles to explain the multifaceted nature of economic organizations.The essence of economic organizations lies in the diverse structures that emerge from the relationships among economic agents. The nature of these relationships is determined by the types of division of labor involved. Thus, only by elucidating the intrinsic connection between division of labor and economic organizations can many of the challenges currently faced in the field be effectively addressed. Ignoring the role of division of labor would cause economic organizations to forfeit their characteristic features of differentiation and integration, a stance that is inconsistent with the rich and varied history of economic development. The relationship between economic organizations and division of labor is not merely one of an independent variable and dependent variable (or vice versa), but rather one of entity and process. Economic organizations not only reflect the structure of division of labor, but their development also influences the relationships between individual agents, thereby fostering further specialization and division of labor.The logic of exchange and the logic of collaboration represent two fundamental modes through which economic organizations interact with the division of labor. Exchange logic characterizes a horizontal relationship among relatively equal individuals, where the core objective is to create an equitable decision-making environment for individual agents within the economic organization. In such an environment, individuals actively engage in exchanges and economic activities based on their self-interest. In contrast, collaboration logic describes a vertical relationship between the leader and the subordinate, wherein the role of the economic organization is primarily to direct and coordinate the division of labor. Under this logic, individuals collaborate within an authoritative framework to achieve predefined economic objectives. Traditional forms of economic organization, such as unilateral markets and hierarchical firms, represent typical embodiments of these two logics. In the classical era, Adam Smith, based on his meticulous observations of market exchanges, articulated the exchange logic of economic organizations. Building on Smith’s work, Karl Marx analyzed the internal cooperation mechanisms within capitalist production systems, thereby expounding the collaboration logic of economic organizations and clarifying the distinction and interplay between exchange logic and collaboration logic.The relationship between exchange logic and collaboration logic is one of reciprocal reinforcement. In traditional economic organizations, such as unilateral markets and hierarchical enterprises, this mutual reinforcement manifests indirectly, primarily reflected in the facilitation of their respective divisions of labor, rather than being aimed at directly promoting one another. In contemporary economic organizational forms, however, the relationship between exchange logic and collaboration logic not only indirectly supports the division of labor but also gives rise to external network externalities that aim to promote one another as a primary objective. In fact, platform organizations exemplify a new type of economic organization grounded in collaboration logic, with the goal of deepening the exchange logic within bilateral markets. As economic and social systems continue to evolve, economic organizations are manifesting increasingly unprecedented features and characteristics. Nevertheless, regardless of the form or function of these organizations, exchange logic and the collaboration logic remain central in providing a coherent explanatory framework for understanding economic organizations.
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