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Global competition, converged tastes, rapidly changing technologies, and short-product life cycle has meant the need for huge capital investment that one company can not endure and, therefore increased the importance of cooperative strategy (Faulner D and De Rond M, 2000).
Global competition, converged tastes, rapidly changing technologies, and short-product life cycle has meant the need for huge capital investment that one company can not endure and, therefore increased the importance of cooperative strategy (Faulner D and De Rond M, 2000).
To the success of an alliance and the performance of a network organization, non-economical factors play significant rule. On the other hand, it might be true that the structure of specific alliance or an organization can curb individual action as the structure may serve as an enabling device for human conduct and a precondition also for chance. In fact, social aspects of alliance can explain causation in alliance life and provides different theoretical lens to understand voluntarism, determinism, and serendipity, which we found in the network of organizations and the people in the specific environment (De Rond M, 2003).
In many organizations, relatively clear social order exists. It is in fact like hierarchism or even royalism. Williamson (1975) called the mechanism of the firm as hierarchies, which is far from the concept of democracy. By contrast, in the network form of organizations we may find the potential of relatively liberal, equal, and democratic relationships. It is at least theoretically possible to find certain form of democratic “society” where the participants of the network benefits the rights and obligations that is similar to the ones we find in our developed countries.
However, in really it seems that democratic relationships in a network of organization or an alliance are relatively new potential. Gerlach (1997) referred the inter-corporate alliance such as keiretsu, which connects both diversified families of firms located around “core-companies” by economic and social ties, as a profound contributor of the industrial success of Japanese companies. It is closer to democratic relationship; however, we still find clear distinction between who has power and who has to obey.
Further, even in a network form of the global value chain, Greffi (1994, 2001) explained the structure and the governance types of global commodity chains, and argued that the development requires selective linkage with distinct kinds of lead firm (e.g., Wal-Mart, Nike, Microsoft, Intel, Amazon, Dell) that controls the entire value chain. Democratic relationship is still relatively hard to find in today’s business environment.
Further, even in a network form of the global value chain, Greffi (1994, 2001) explained the structure and the governance types of global commodity chains, and argued that the development requires selective linkage with distinct kinds of lead firm (e.g., Wal-Mart, Nike, Microsoft, Intel, Amazon, Dell) that controls the entire value chain. Democratic relationship is still relatively hard to find in today’s business environment.
Still, we may find future potential in drastically changing new markets. Powell et al, (2005) showed how new information and entrants were integrated into an industry network by logics of attachment and how different rules for affiliation shape network evolution in order to offer account for the decentralized structure of the commercial field of the life sciences.
Moreover, there are many contributing factors such as the development of modularity. While technological know-how and capabilities may end up being distributed quite differently between OEMs and suppliers and potentially create inequity, modularity increases the independence or autonomy of an organization unit (Sako, 2003). This may result in specialization of players in a field and complex inter-connections among networks, contributing the future establishment of democratic network of organizations.
Democracy in an organization is still underdevelopment, however, there are increasing potential of democracy for participating organizations of networks and alliances.
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