Corporate Governance, Organization and the Firm
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Corporate Governance, Organization and the Firm

Co-operation and Outsourcing in the Global Economy

Edited by Mario Morroni

In recent years, applied studies have shown widespread, profound and increasing heterogeneity across firms in terms of their strategy, organization arrangement and performance. This book investigates the diversity of business firms, offering a picture of the different organizational settings they adopt in their endeavour to cope with increasing competitive pressure.
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Chapter 6: Organization of Firms, Knowing Communities and Limits of Networks in a Knowledge-Intensive Context

Patrick Cohendet and Patrick Llerena


6. Organization of firms, knowing communities and limits of networks in a knowledge-intensive context Patrick Cohendet and Patrick Llerena INTRODUCTION 6.1 This contribution addresses the issues of organization and competitiveness of firms in a knowledge-intensive context. A knowledge-intensive context refers to an industrial context where the competitive pressure requires the integration of different bodies of specialized knowledge and the production of an ever increasing diversity. These conditions are met in some traditional sectors, such as automobile or aeronautics, but also in creative industries, such as film making, video games or fashion companies. The main challenge which arises in this context is the emergence of new organizational forms, allowing for both diversity creation and economic efficiency. Networks of firms seem to be an overwhelmingly accepted organizational solution. They allow the combination of a variety of competences and access to specialized and demand-specific knowledge. However networks have limits and have some impact on the view and role of firms. The main purpose of this chapter is precisely to clarify the nature of those limits and their origins. We shall, in fact, argue that the viability of a variety-based industrial organization cannot rely on ‘simple’ networks of firms, but mainly should instead rely on the existence of more complex, interactive networks, associating formal structures, such as firms, and informal structures, such as elementary sources of specialized knowledge: the knowing communities. These latter are the loci of the creation of new specialized knowledge and a means to take into account the...

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