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date: 18 November 2019

Abstract and Keywords

There are a number of ways that interfirm relationships can be conceived and organized. The classic dichotomy is between a market form of organization and a hierarchical form. Considered in terms of this continuum, the market appears towards the coordination end while hierarchy appears towards the governance end. This article concentrates on how cooperation and governance are organized in interfirm networks and what networks offer that is different from either strictly market or hierarchical relations between firms. Thus, networks are not seen as simple hybrid organizational forms — occupying a space between markets and hierarchies and involving aspects of them both — but as distinctive, new organizational forms in their own right. They have their own unique characteristics and logic of operation. After setting out an argument to this effect, the discussion critically interrogates evolutionary and biological approaches to understanding networks.

Keywords: interfirm relationships, market form, hierarchical form, biological approaches, networks

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