The Many-Headed Hydra: Networks as Higher-Order Collective Actors
CORPORATE CONTROL AND ACCOUNTABILITY: CHANGING STRUCTURES AND THE DYNAMICS OF REGULATIONS, Joseph McCathery, Sol Picciotto, Colin Scott, eds., Oxford University Press, 1993
58 Pages Posted: Last revised: 8 Jun 2018
Date Written: 1993
Today prominent examples of network-like 'interpenetration of market and organization' are decentralized conglomerates, multi-divisional firms with autonomous 'profit centers', joint ventures in the R & D area, strategic alliances, but also franchising networks and other distribution systems. The article sets up the following three theses for discussion:
(1) Networks constitute themselves as genuine emergent phenomena, not between, but beyond contract and organization. The self-organization of networks as higher-order autopoietic systems is accomplished through 're-entry' of institutionalized distinctions. A 'double attribution' of action results from this as the differentia specifica of networks.
(2) Networks are not just relations between several autonomous corporate actors, but are themselves corporate actors of a special nature. As polycorporate collectives, they are in fact personified webs of relationships with a special capacity for collective action which is constituted among the nodes of the nets.
(3) Networks, whose efficiency gains are based on an intelligent combination of market and hierarchy, also have a dark side. They create specific transactional risks. The externalization of these risks brings them (illegitimate) cost advantages. Appropriate internalization seems possible through novel legal mechanisms of simultaneous multiple attribution of responsibility.
Keywords: legal theory, system theory
JEL Classification: K10, K40
Suggested Citation: Suggested Citation