Table Of ContentInterfirm Networks
‘This will almost surely become a standard reference on business
analysis.’
Nicholai Foss, Copenhagen Business School
A wide range of economists and policy-makers are now aware that there is
a distinct correlation between the economic success of a country or region
and that unit’s capacity to develop networks of relatively high-trust
relationships among firms. This has drawn deserved attention to this
organizational form. Interfirm Networks examines the nature of such
networks and their role in promoting industrial competitiveness.
Where previous work in this area has tended to be purely descriptive
rather than analytical, the distinguished contributors to this volume
present a balanced, theoretical and empirical approach to interfirm
networking drawing on a variety of international case studies. Issues
covered in Interfirm Networks: Organization and Industrial Competitiveness
include:
• the role of networks in regulating conflict and producing cooperation
• the role of networks in developing knowledge and competences
• network governance and conflict intensive networks
Students and researchers working on industrial and managerial economics, as well as those
in business in general will find this an indispensible resource on the role of contemporary
interfirm networks.
Anna Grandori is Professor of Organization and Management,
University of Modena and Bocconi University, Milan.
Routledge Studies in Business Organizations and Networks
1 Democracy and Efficiency in the Economic Enterprise
Edited by Ugo Pagano and Robert Rowthorn
2 Towards a Competence Theory of the Firm
Edited by Nicolai J. Foss and Christian Knudsen
3 Uncertainty and Economic Evolution
Essays in honour of Armen A. Alchian
Edited by John R. Lott Jr
4 The End of the Professions?
The restructuring of professional work
Edited by Jane Broadbent, Michael Dietrich and Jennifer Roberts
5 Shopfloor Matters
Labor-management relations in twentieth-century American manufacturing
Davd Fairris
6 The Organisation of the Firm
International business perspectives
Edited by Ram Mudambi and Martin Ricketts
7 Organizing Industrial Activities Across Firm Boundaries
Anna Dubois
8 Economic Organization, Capabilities and Coordination
Edited by Nicolai Foss and Brian J. Loasby
9 The Changing Boundaries of the Firm
Explaining evolving interfirm relations
Edited by Massimo G. Colombo
10 Authority and Control in Modern Industry
Theoretical and empirical perspectives
Edited by Paul L. Robertson
11 Interfirm Networks
Organization and industrial competitiveness
Edited by Anna Grandori
12 Privatization and Supply Chain Management
Andrew Cox, Lisa Harris and David Parker
13 The Governance of Large Technical Systems
Edited by Olivier Coutard
14 Managing the New Product Supply Chain
An industrial organization perspective
Michael Schwartz
Interfirm Networks
Organization and Industrial
Competitiveness
edited by Anna Grandori
London and New York
First published 1999 by Routledge
11 Fetter Lane, London EC4P 4EE
Simultaneously published in the USA and Canada
by Routledge
29 West 35th Street, New York, NY 10001
This edition published in the Taylor & Francis e-Library, 2001.
© 1999 Anna Grandori for selection and editorial matter; individual contributors for their contributions
All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any
electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording,
or in any information storage or retrieval system, without permission in writing from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Interfirm networks: organization and industrial competitiveness / edited by Anna Grandori.
p. cm. — (Routledge studies in business organization and networks; 15)
Includes bibliographical references and index.
1. Business networks. I. Grandori, Anna. II. Series.
HD69.S8158 1999
658.4´095–dc21 98-33131
CIP
ISBN 0–415–20404–6 (Print Edition)
ISBN 0-203-02248-3 Master e-book ISBN
ISBN 0-203-17228-0 (Glassbook Format)
Contents
List of Tables and Figures vii
List of Contributors ix
Introduction 1
ANNA GRANDORI
Interfirm networks: organizational mechanisms and economic
outcomes
PART 1
Differentiated interests, coordination mechanisms and
fairness outcomes
1 The rules of the game in industrial districts 17
SEBASTIANO BRUSCO
2 The fairness properties of interfirm networks 41
ANNA GRANDORI AND MASSIMO NERI
3 Inside partnership. Trust, opportunism and cooperation in the
European automobile industry 67
ERHARD FRIEDBERG AND JEAN-PHILIPPE NEUVILLE
PART 2
Differentiated competences, coordination mechanisms and
learning outcomes
4 The dynamic efficiency of networks 91
BART NOOTEBOOM
5 Interorganizational relations in the Modena biomedical industry:
a case study in local economic development 120
ANDREA LIPPARINI AND ALESSANDRO LOMI
vi Contents
6 Industry clusters as commercial, knowledge and institutional
networks: opto-electronics in six regions in the UK, USA and
Germany 151
CHRIS HENDRY, JAMES BROWN, ROBERT DEFILLIPPI AND
ROBERT HASSINK
7 Organizational learning and the role of the network broker in
small-firm manufacturing networks 185
KEITH G. PROVAN AND SHERRIE E. HUMAN
8 Dangerous liaisons: sharing knowledge within research and
development alliances 208
PAUL B. DE LAAT
PART 3
The externalities of networks
9 The costs of networked organization 237
PETER SMITH RING
10 Credit rationing among small-firm networks in the London and
New York garment industries 263
ANDREW GODLEY
11 The dark side of dense networks: from embeddedness to
indebtedness 276
GIUSEPPE SODA AND ALESSANDRO USAI
12 Japanese interfirm networks:‘high trust’ or ‘relational access’? 303
MARK J. SCHER
Index 319
Tables and Figures
Tables
5.1 The relational subsets 133
5.2 Centrality measures for each relational subset 135
6.1 Firms by size, age, industry level, ownership and start-up
pattern in six regions 158
7.1 Network, firm and respondent descriptive characteristics 190
7.2 Organizational learning within SME networks 192
7.3 Roles and emphases of the network broker for organizational learning 201
11.1 Porter’s five forces model applied to the construction
industry in Italy 282
11.2 Betweeness centrality of Italian general contractors 287
12.1 Characteristics of the insider–outsider continuum 314
12.2 Coordination mechanism modes 315
Figures
4.1 Degree of integration 94
4.2 Options for covering fixed costs 101
4.3 Cycle of learning 104
4.4 Cycle of (dis)integration 110
5.1 Competencies, size and basic connections among players
in the Modena biomedical industry 129
5.2 The Modena biomedical industry: total relationships 136
5.3 The Modena biomedical industry: exchange of raw
materials 137
5.4 The Modena biomedical industry: the use of subcontracting 138
5.5 The Modena biomedical industry: exchange of components
and parts 139
5.6 The Modena biomedical industry: exchange of finished
products 140
5.7 Average degree centrality by classes of firms’ age (dataset
TOT_REL) 141
viii Figures
5.8 Average degree centrality by classes of firms’ size (dataset
TOT_REL) 141
5.9 Average degree centrality by classes of firms’ age (dataset
RAW_MAT) 142
5.10Average degree centrality by classes of firms’ size (dataset
RAW_MAT) 143
5.11 Average degree centrality by classes of firms’ age (dataset
COM_PART) 143
5.12Average degree centrality by classes of firms’ size (dataset
COM_PART) 144
6.1 Five sets of factors for analysing the emergence and role
of clusters in opto-electronics 155
6.2 Relative importance of the local, national and international
networks 168–169
7.1 Alpha-net perception of competition among sample firms 196
7.2 Beta-net perception of competition among sample firms 197
9.1 Costs associated with economic exchange 240
11.1 The whole network of consortia among Italian general
contractors 286
11.2 Relationship between performance and relational capital 288
11.3 The vicious circle of costs and negative externalities 293
11.4 The public works market 1987–1995 297
11.5 Average profitability rate of the top 100 construction
companies in Italy from 1984 to 1993 297
11.6 Total amount of net profits (or losses) of the top 100
construction companies in Italy from 1984 to 1993 298
12.1 Kigyo shudan–keiretsu power relationships—a three-
dimensional view 310
12.2 Interfirm relations: trust—power/control matrix 312
12.3 R-dimension: relational access insider–outsider
continuum 315
Contributors
Anna Grandori is Professor of Organization and Human Resource Management and Head
of the Business Administration Department at the Economics Faculty, University of
Modena; and Professor of Methods of Organization and Management Research at
Bocconi University, Milan.
Massimo Neri is Research Fellow at the University of Modena, Department of Business
Administration. His research has focused on organizational justice as applied to a
variety of organization analysis and design problems.
Erhard Friedberg is Senior Researcher at the Centre National de la Recherche Scientifique
(CNRS), Paris, Director of the Centre de Sociologie des Organisations (CSO), and
Director of the Doctoral Program in Sociology at the Paris Institute of Political Science
(IEP).
Jean-Philippe Neuville is Assistant Professor of Sociology at the National Institute for
Applied Sciences (Lyon) and Research Associate at the Center for the Sociology of
Organisations (Paris).
Bart Nooteboom is Professor of Industrial Organization at the School of Management and
Organization at Groningen University, the Netherlands. His research interests have
been entrepreneurship, innovation and diffusion, technology policy, transaction cost
theory, interorganizational relations and learning.
Andrea Lipparini PhD teaches at the University of Bologna and at the Catholic University
in Milan. His research interests lie in the areas of interorganizational relationships and
organizational competencies.
Alessandro Lomi is a member of the Strategy and Organization Group at the School of
Economics of the University of Bologna. His main research interests include social
network analysis, ecological models of organizations and simulation models of social
processes.
Chris Hendry is Centenary Professor in Organisational Behaviour at City University Business
School, London. School, London.
