How Business Organizes Collectively
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How Business Organizes Collectively

An Inquiry on Trade Associations and Other Meta-Organizations

Hervé Dumez and Sandra Renou

Collective action by firms is a central societal phenomenon, whereby firms set up specific devices, referred to by the authors as ‘Firms’ Collective Action Devices’ (FCADs). This timely book shows how the phenomenon has been studied in a variety of academic disciplines, including history, political science, economics, sociology, management and organization theory, and how FCADs are used in lobbying, and to tackle issues such as those related to the environment and human rights. The book uses the concepts of meta-organization and heterarchy to give a fascinating overview of firms’ collective action, investigate some little-known aspects of the phenomenon, and examine the impact of FCADs on the economy and democracy.
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Chapter 4: Firms collective action devices as a mix of heterarchy and hierarchy

Hervé Dumez and Sandra Renou

Abstract

To study the dynamics of firms’ collective action devices (FCADs), a longitudinal analysis of a meta-organization was conducted. It is based on the analysis of the costs and benefits of collective action over the long term. For firms, direct costs (fees) are low. Generally, there is a phenomenon of cross-subsidization: large firms pay proportionally more than small firms. The latter therefore pay little. As for large firms, even if their contributions are proportionally higher, they represent very little compared to their turnover. The benefits derived by firms are both individual and collective. The analysis highlights a series of temporal nodes: the creation of a formal organization or the operation of an informal mode; the minimum activity in the DIY or the scaling of the organization; maintenance of the activity or entering into dormancy; the possible creation of a new organization. This model explains the proliferation trend of FCADs and, at the same time, their longevity.

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