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ABSTRACT
Initial sociological interest in network forms of organization was motivated in part by a critique of economic views of organization. Sociologists sought to highlight the prevalence and functionality of organizational forms that could not be classified as markets or hierarchies. As a result of this work, we now know that network forms of organization foster learning, represent a mechanism for the attainment of status or legitimacy, provide a variety of economic benefits, facilitate the management of resource dependencies, and provide considerable autonomy for employees. However, as sociologists move away from critiquing what are now somewhat outdated economic views, they need to balance the exclusive focus on prevalence and functionality with attention to constraint and dysfunctionality. The authors review work that has laid a foundation for this broader focus and suggest analytical concerns that should guide this literature as it moves forward.
KEY WORDS: networks, organization, alliances, governance, trust
INTRODUCTION
Over the past decade or so, sociological interest in network forms of organization has blossomed. Sociologists have become increasingly intrigued by the plethora of organizational configurations that fail to conform to traditional definitions of markets or hierarchies. Part of the interest in these alternative organizational arrangements is no doubt due to what some regard as their increased empirical prevalence (Kanter 1991).
While a number of scholars have convincingly challenged the view that these forms are more prevalent now than at other times in history (e.g., Clawson 1980, Granovetter 1995, Laumann 1991), it nonetheless remains true that changes in the US regulatory environment greatly facilitated the ability of US firms to engage in cooperative activities with their market competitors. For example, the National Cooperative Research Act enabled coordinated research and development activity across firm boundaries to an extent that had not been allowed in the past. Such regulatory changes were themselves a consequence of another empirical phenomenon in the 1980s that also increased scholarly interest in these network forms of organization: the worldwide competitive success of Japanese and, to a lesser extent, other Asian firms. Because Japanese firms seemed to rely extensively on network forms of organization, there emerged great interest on the part of both scholars and practitioners in understanding the extent to which that reliance was itself a determinant of competitive...