A general theory of network governance: exchange conditions and social mechanisms

Article Abstract:

A phenomenon of the last 20 years has been the rapid rise of the network form of governance. This governance form has received significant scholarly attention, but, to date, no comprehensive theory for it has been advanced, and no sufficiently detailed and theoretically consistent definition has appeared. Our objective in this article is to provide a theory that explains under what conditions network governance, rigorously defined, has comparative advantage and is therefore likely to emerge and thrive. Our theory integrates transaction cost economics and social network theories, and, in broad strokes, asserts that the network form of governance is a response to exchange conditions of asset specificity, demand uncertainty, task complexity, and frequency. These exchange conditions drive firms toward structurally embedding their transactions, which enables firms to use social mechanisms for coordinating and safeguarding exchanges. When all of these conditions are in place, the network governance form has advantages over both hierarchy and market solutions in simultaneously adapting, coordinating, and safeguarding exchanges. (Reprinted by permission of the publisher.)

Corporate governance, Business enterprises, Public relations, Social networks, Cost (Economics), Costs (Economics)

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The knowledge-based view, nested heterogeneity, and new value creation: Philosophical considerations on the locus of knowledge

Article Abstract:

A study reveals that a coherent theory of new value creation should start with a consideration of the individuals that make up the organization. The immediate steps required to disentangle the locus of knowledge question or individual and collective level effects are discussed.

Management dynamics, Methods, Management, Knowledge management, Corporate culture, Company business management, Collectivism

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