The shift to an open systems perspective, particularly with its increased focus on
interorganizational relations, provided another impetus. Benson’s ( 1975 ) political
economy approach to interorganizational relations claimed ‘‘networks’’ of organ-
izations were a new unit of analysis.
A decade or more later, the rising inXuence of institutional economics provided
another context for the articulation of network ideas. The work of Oliver
Williamson posed ‘‘markets’’ and hierarchies’’ as two alternative means of organ-
izing economic transactions. The framework placed organization on a continuum
between contract (market) and authority (hierarchy). In an inXuential article,
Powell ( 1990 ) argued that ‘‘network organizations’’ were neither markets nor
hierarchies. He argued that network organizations achieve coordination through
trust and reciprocity rather than through contract or authority.
Other work on organizations points to structural aspects that made them diYcult
to describe either as markets or as hierarchies. For example, Faulkner ( 1983 )applied
network models to the process of forming project teams in the AmericanWlm
industry. At the same time, the burgeoning importance of strategic alliances and
joint ventures betweenWrms gave credence to thinking of interorganizational rela-
tions betweenWrms in network terms. Gerlach’s ( 1992 ) network analysis of Japanese
intercorporate relations provides a notable example. A 1990 volume by Nohria and
Eccles gave additional impetus to thinking of organizations as networks. These ideas
have been used in political science to describe political parties (Schwartz 1990 ).
A somewhat separate line of research in public administration stressed the
importance of thinking about interorganizational relationships in network terms.
Fragmentation of service delivery and the complexity of implementation processes
was a major concern of this literature. One common theme was how to achieve
coordination among multiple public agencies with overlapping missions and
authority. Chisholm’s ( 1989 ) study of the role of informal networks in coordinating
multiple transportation agencies and Provan and Milward’s ( 1995 ) comparison of
mental health networks in four American cities oVer good examples of this genre.
The managerial emphasis of this work is well represented in Kickert, Klijn, and
Koppenjan ( 1997 ).
6Markets
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TheWelds of political economy and economic sociology have also used the idea of
networks to conceptualize markets and market dynamics, and to describe the
relationship between states and markets. Baker’s ( 1984 ) study of social relationships
82 christopher ansell