Introduction: Dynamics of Interaction between Institutions, Markets and Organizations

Abstract

Whereas the comparative business systems literature has studied how different national institutional settings encourage the development of different forms of economic organization, organization theory has tended to focus on the nature of different kinds of organizations and how these change, including vertical and horizontal alliances and networks of firms. Strategic management research, on the other hand, has concentrated on how firms develop different competences and strategies in different markets and competitive circumstances. The connections between these strands of research have, on the whole, remained quite limited. Studies of organization and strategy often neglected the role of institutions and national settings, while many studies of business systems have not considered the strategic behaviour of firms in the development of different kinds of economic coordination and control systems.One reason for the continued separation of these research approaches is their reflection of different disciplinary backgrounds, especially between those stemming from the economics of market structure and competition, the sociology of organization and networks and the sociology and political science of institutions and national settings. Economics has tended to emphasize demand conditions, market structure and competition, with notions such as economy of scale, entry barriers and differentiability of products explaining firm structure and behaviour. It has also often relied on functionalist accounts of economic organization, presuming that what survives is ipso facto efficient, as well as assuming ultra-rational owners and managers with perfect knowledge.In contrast, institutional analysis has highlighted the role of institutional arrangements governing the constitution of economic actors and their interactions, such as authority and trust norms, legal systems, state structures and policies, financial systems, the organization and hierarchy of professions and interest groups, skill-formation systems and the governance of labour markets. Many sociological approaches emphasize the importance of power relations, social conditioning, social capital and networks and social structures. Explanations in these two approaches invoke institutionalized expectations and rationalities as causal agencies in accounting for the ways that firms and other actors make sense of their situations and in deciding what to do, as well as more straightforward struggles over resources and control between groups with different capabilities and assets.

Advancing Nonmarket Strategy Research: Institutional Perspectives in a Changing World

“…In the 1990s, some institutional studies attempted to explain why internationally based patterns of economic and social factors persisted (Hall & Soskice, 2001). They did so by stressing the importance of differences in actor and stakeholder relationships cross-nationally, and how this power variation is used through formal and informal institutions (Djelic, Nooteboom, & Whitley, 2005). (2008).…”

“…Moreover, studies using this perspective have sought to identify distinct forms of national business systems and understand their resilience in the face of the homogenizing pressures of globalization (Whitley, 1999). They have done so by stressing the importance of power in social relationships in developing NMS and how this power is used through formal and informal institutions (Djelic, Nooteboom, & Whitley, 2005). Other studies have built on the political relationships by incorporating a national business systems approach into their analysis (Sun, Mellahi, & Thun 2010;Sun, Wright, & Mellahi, 2010).…”

Politics and the Evolution of Inter-firm Networks: A Post-Communist Lesson

“…By arguing that firms are embedded in concrete socio-political networks, my approach extends this work by attempting to clarify how the politics of institutional change can cause changes in socio-economic landscapes. In doing so, I build on the growing literature examining the interaction between public institutions and economic organizations (Djelic et al 2005;Whitley 2000) that has attempted to reconcile Polanyi's (1944) dual emphasis of economic activity being both embedded in social relationships and shaped by the politics of state crafting (see, for instance , Evans 1995;Fligstein 2001;Hall and Soskice 2001;Hamilton and Biggart 1988;Piore and Sabel 1984).…”

Entrepreneurship and the Legacies of a Developmental State: Singapore Enterprises Venturing Across National Borders

“…Studies in the field of comparative business systems have shown that national institutional regimes create forms of economic organization, which influence the ways in which firms develop competencies and strategies to respond to changing market conditions (Djelic et al, 2005). More recently, the focus in this field has shifted to the role of firms not in terms of passive recipients of institutional resources "but as actors involved in both the construction and reconstruction of such resources within and across national contexts" (Morgan andQuack, 2005, p. 1765).…”