Skip to main content
Log in

Markets with Hierarchies and the Network Structure of Organizational Communities

  • Published:
Journal of Management & Governance Aims and scope Submit manuscript

Abstract

Using data on supplier relationships among 106organizations involved in the production of means oftransportation located in southern Italy, I exploresome of the consequences of the progressive erosion ofboundaries around corporate actors in modernorganizational economies. The paper is built aroundthe claim that – as companies are forced by variouslearning imperatives to rely more on other companies– interorganizational differences are sustained andreproduced by role structures emerging from theconcatenation of different types of relationshipsacross multiple networks. The analysis illuminatesselected implications of network relations for thestructuring of market relations in interorganizationalfields.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

References

  • Arrow, K. (1974). The Limit of Organization. New York: Norton.

    Google Scholar 

  • Ashkenas, R., Ulrich, D., Jick, T. & Kerr, S. (1995). The Boundaryless Organization. San Francisco: Jossey-Bass.

    Google Scholar 

  • Baker, W. (1992). The Network Organization in Theory and Practice. In Nohria, N., Eccles, R. (eds.) Networks and Organizations. Boston, MA: Harvard University Press, 397–429.

    Google Scholar 

  • Barnett, W. (1993). Strategic Deterrence Among Multipoint Competitors. Industrial and Corporate Change 2: 249–278.

    Article  Google Scholar 

  • Barnett, W., Greve, H. & Park, D. (1994). An Evolutionary Model of Organizational Performance. Strategic Management Journal 15: 11–28.

    Article  Google Scholar 

  • Bensaou, M. & Venkatraman, N. (1995). Configurations of Interorganizational Relationships: A Comparison Between Japanese and US Automakers. Management Science 41: 1471–1492.

    Article  Google Scholar 

  • Berger, S. & Piore, M. (1981). Dualism and Discontinuity in Industrial Societies. New York: Cambridge University Press.

    Google Scholar 

  • Bonacich, P. & McConaghy, M. (1980). The Algebra of Blockmodelling. In Schussler, K. (ed.) Sociological Methodology. San Francisco: Jossey Bass, 489–532.

    Google Scholar 

  • Boorman, S. & White, H. (1976). Social Structure from Multiple Networks II. Role Structures. American Journal of Sociology 81: 1384–1446.

    Article  Google Scholar 

  • Borgatti, S., Everett, M. & Freeman, L. (1992). UCINET Version IV. Columbia SC: Analytic Technologies

    Google Scholar 

  • Breiger, R. (1976). Toward an Operational Theory of Community Elite. Quality and Quantity 13: 21–57.

    Google Scholar 

  • Breiger, R. (1991). Explorations in Structural Analysis: Dual and Multiple Networks of Social Interaction. New York: Garland.

    Google Scholar 

  • Breiger, R., Boorman, S. & Arabie, P. 1975. An Algorithm for Clustering Relational Data with Applications to Network Analysis and Comparison with Multidimensional Scaling. Journal of Mathematical Psychology 12: 328–383.

    Article  Google Scholar 

  • Brown, J. & Duguid, P. (1992). Organizational Learning and Communities-of-Practice: Toward and Integrated View of Working, Learning and Innovation. Organization Science 2: 40–56.

    Article  Google Scholar 

  • Burt (1992). Structural Holes: The Social Structure of Competition. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Burt, R. & Talmud, I. (1992). Market Niche. Social Networks 14.

  • Castronovo, V. (1980). L’industria Italiana Dall’ottocento a Oggi. Milano: Mondadori.

    Google Scholar 

  • Chandler. A. (1977). The Visible Hand. Cambridge, MA: Belknap Press.

    Google Scholar 

  • Chandler, A. (1990). Scale and Scope: The Dynamics of Industrial Capitalism. Cambridge, MA: The Belknap Press of Harvard University Press.

    Google Scholar 

  • Christopherson, S. & Storper, M. (1986). The City as a Studio; The World as a Back Lot: The Impact of Vertical Disintegration on the Location of the Motion Picture Industry. Environment and Planning D: Society and Space 4: 305–320.

    Article  Google Scholar 

  • Cohen, W. & Levinthal, D. (1990). Absorptive Capacity: A New Perspective on Learning and Innovation. Administrative Science Quarterly 35: 128–152.

    Article  Google Scholar 

  • Cusumano, M. (1989). The Japanese Auto Industry. Harvard-East Asia Monograph N. 122. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Davidow, W. & Malone, D. The Virtual Corporation. New York: Harper Business.

  • deGeus, A. (1988). Planning as Learning. Harvard Business Review March–April: 70–74.

  • DiMaggio, P. (1986). Structural Analysis of Organizational Fields: A Blockmodel Approach. In B. Staw and L. Cummings (eds.) Research in Organizational Behavior 8: 335–370. Greenwich, CT: JAI Press.

    Google Scholar 

  • Freeman, J. (1996). Entrepreneurship and the Infrastructural Community. UC Berkeley: unpublished manuscript.

  • Granovetter, M. (1985). Economic Action and Social Structure: The Problem of Embeddedness. American Journal of Sociology 91: 481–510.

    Article  Google Scholar 

  • Granovetter, M. (1994). Business Groups. In Smelser, N. & Swedberg, R. (eds.) Handbook of Economic Sociology: 453–475. Princeton NJ: Russell Sage Foundation.

    Google Scholar 

  • Hamel, G. & Prahalad, C.K. (1994). Competing for the Future. Boston, MA: Harvard Business School Press.

    Google Scholar 

  • Hannan, M. & Freeman, J. (1989). Organizational Ecology. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Helper, S. & Levine, D. (1992). Long-term Supplier Relations and Product-Market Structure. Journal of Law Economics and Organization 8: 561–582.

    Google Scholar 

  • Herrigel, G. (1995). Industrial Constructions. New York: Cambridge University Press.

    Google Scholar 

  • Hubert, L. & Shultz, L. (1976). Quadratic Assignment Procedure as a General Data Analysis Strategy. British Journal of Mathematical and Statistical Psychology 29: 190–241.

    Article  Google Scholar 

  • Katz D. & Kahan, D. (1966). The Social Psychology of Organizations. New York: Wiley.

    Google Scholar 

  • Krackhardt, D. (1987). QAP Partialling as a Test of Spuriousness. Social Networks 9: 171–186.

    Article  Google Scholar 

  • Lazerson, M. (1995). A New Phoenix: Modern Putting Out in the Modena Knitwear Industry. Administrative Science Quarterly 40: 34–59.

    Article  Google Scholar 

  • Levinthal, M. Organizational Adaptation and Selection — Interrelated Processes of Change. Organization Science 2: 140–145.

  • Lincoln, J., Gerlach, M. & Ahmadjian, C. (1996). Keiretsu Networks and Corporate Performance in Japan. American Sociological Review 61: 67–88.

    Article  Google Scholar 

  • Lipparini, A. (1997). Sistemi territoriali e comunità inter-organizzative. In Lomi, A. (ed.) Lanalisi relazionale delle organizzazioni. Bologna: Il Mulino.

    Google Scholar 

  • Lipparini, A. & Lomi, A. (1996). Relational Structures and Strategies in Industrial Districts: An Empirical Study of Interorganizational Relations in the Modena Biomedical Industry. Paper presented at the EMOT Conference on Interfirm Networks: Outcomes and Policy Implications. Italy: Modena (September).

    Google Scholar 

  • Lipparini, A. & Lorenzoni, G. (1996). Le organizzazioni ad alta intensità relazionale. Riflessioni sui meccanismi di “learning by interacting” nelle aree ad alta concentrazione di imprese. Working Paper. Milano: Università Luigi Bocconi Quaderno N. 5/95.

    Google Scholar 

  • Lomi, A. (1996). Mutazioni Competitive e Selezione. Bologna: Edizioni Pendragon.

    Google Scholar 

  • Lomi, A. (ed.) (1997). L’analisi relazionale delle organizzazioni. Bologna: Il Mulino.

    Google Scholar 

  • Lorenzoni, G. (1979). Una politica innovativa nelle piccole e medie imprese. Milano: Etas Libri.

    Google Scholar 

  • Lorenzoni, G. & Lazerson, M. (1996). The Network that Feeds Industrial Districts: A Return to the Italian Source. University of Bologna: Unpublished manuscript, September.

  • Lorrain, F. & White, H. (1971). Structural Equivalence of Individuals in Social Networks. Journal of Mathematical Sociology 1: 49–80.

    Article  Google Scholar 

  • McLean, P. & Padgett, J. (1996). Was Florence a Perfectly Competitive Market? Transactional Evidence from the Renaissance. Theory and Society, Forthcoming.

  • Miles and Snow (1986). Networks Organizations: New Concepts for New Forms. California Management Review 28: 62–73.

    Google Scholar 

  • Pattison, P. (1993). Algebraic Models for Social Networks. New York: Cambridge University Press.

    Book  Google Scholar 

  • Paulson, S. (1985). A Paradigm for the Analysis of Interorganizational Networks. Social Networks 7: 105–126.

    Article  Google Scholar 

  • Perrow, C. (1991). A Society of Organizations. Theory and Society 20: 725–762.

    Article  Google Scholar 

  • Pfeffer, J. & Salancik, G. (1978). The External Control of Organizations. New York: Harper and Row.

    Google Scholar 

  • Piore. M. & Sabel, C. (1984). The Second Industrial Divide. New York: Basic Books.

    Google Scholar 

  • Powell, W. & DiMaggio, P. (eds) (1991). The New Institutionalism in Organizational Analysis. Chicago: University of Chicago Press.

    Google Scholar 

  • Powell, W., Koput, K. & Smith-Doerr, L. (1996). Interorganizational Collaboration and the Locus of Innovation: Networks of Learning in Biotechnology. Administrative Science Quarterly 41: 116–145.

    Article  Google Scholar 

  • Sabel, C. (1991). Moebius-Strip Organizations and Open Labor Markets: Some Consequences of Reintegration of Conception and Execution. In Bordieu, P. & Coleman, J. (eds.) Social Theory for a Changing World, 23–53. Westview Press. New York: Russell Sage Foundation.

    Google Scholar 

  • Sabel, C., Herrigel, G., Kazis, R. & Deeg, R. (1981). How To Keep Mature Industries Innovative. Technology Review 90: 26–35.

    Google Scholar 

  • Sabel, C., Kern, H. & Herrigel, G. (1991). Kooperative Produktion. Neue Formen der Zusammenarbeit Zwischen Endfertigern und Zulieferern in der Automobilindustrie un die Neuordnung der Firma. In Mendius, H.G. & Wandeling-Schroeder, U. (eds.) Zulieferer im Netz, 203–227. Köln: Bund Verlag.

    Google Scholar 

  • Simon, H. (1962). The Architecture of Complexity. Proceedings of the American Philosophy Society 106: 467–482.

    Google Scholar 

  • Simon, H. (1991). Organizations and Markets. Journal of Economic Perspectives 5: 25–44.

    Google Scholar 

  • Stark, (1991). Comments. In Bordieu, P. & Coleman, J. (eds.) Social Theory for a Changing World, 54–56. Westview Press. New York: Russell Sage Foundation.

    Google Scholar 

  • Storper, M. & Harrison, B. (1991). Flexibility, Hierarchy and Regional Development: The Changing Structure of Industrial Production Systems and Their Form of Governance in the 1990s. Research Policy 20: 407–422.

    Article  Google Scholar 

  • Thompson, J. (1967). Organizations in Action. NY: McGraw Hill.

    Google Scholar 

  • Thompson, G., Frances, J., Levacic, R. & Mitchell, J. (1991). Markets, Hierarchies and Networks. London: Sage.

    Google Scholar 

  • Uzzi, B. (1996). The Sources and Consequences of Embeddedness for the Economic Performance of Organizations: The Network Effect. American Sociological Review 61: 674–698.

    Article  Google Scholar 

  • Wasserman. S. & Faust, K. (1994). Social Network Analysis: Methods and Applications. New York: Cambridge University Press.

    Google Scholar 

  • White, H. (1994). Identity and Control. Princeton, NJ: Princeton University Press.

    Google Scholar 

  • White, H., Boorman, S. & Breiger, R. (1976). Social Structure from Multiple Networks I. Blockmodels of Roles and Positions. American Journal of Sociology 81: 730–779.

    Article  Google Scholar 

  • White, H. & Eccles, R. (1987). Producers’ Markets. In Eatwell, J., Milgrates, M. & Newman, P. (eds.) The New Palgrave Dictionary of Economics, Vol. 3: 984–986. London: McMillan.

    Google Scholar 

  • Williamson, O. (1975). Markets and Hierarchies. New York: Free Press.

    Google Scholar 

  • Williamson, O. (1985). The Economic Institutions of Capitalism. New York: Free Press.

    Google Scholar 

  • Williamson, O. (1991). Comparative Economic Organization: The Analysis of Discrete Structural Alternatives. Administrative Science Quarterly 36: 269–296.

    Article  Google Scholar 

  • Williamson, O. (1994). Transaction Cost Economics and Organization Theory. In Smelser, N. & Swedberg, R. (eds.) Handbook of Economic Sociology, 77–107. Princeton NJ: Russell Sage Foundation.

    Google Scholar 

  • Williamson, O. & Ouchi, W. (1981). The Markets and Hierarchies Program of Research: Origins, Implications, Prospects. In Joyce, W. & Van de Ven, A. (eds.) Organizational design. New York: Wiley.

    Google Scholar 

  • Womak, J., Jones, D. & Roos, P. (1990). The Machine that Changed the World. New York: MacMillan.

    Google Scholar 

  • Zamagni, V. (1978). Industrializzazione e squilibri regionali in Italia. Bologna: Il Mulino.

    Google Scholar 

  • Zavatta, R. (1993). Il posizionamento competitivo dell’industria meccanica meridionale. Internal research report. Bologna: Economisti Associati.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Rights and permissions

Reprints and permissions

About this article

Cite this article

Lomi, A. Markets with Hierarchies and the Network Structure of Organizational Communities. Journal of Management & Governance 1, 49–66 (1997). https://doi.org/10.1023/A:1009941400148

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1023/A:1009941400148

Keywords

Navigation