The (dis-)embedded firm. Complex structure and dynamics in inter-firm relations: adding institutionalisation as a Veblenian dimension to the Coase-Williamson approach

The increasing complexity of the environment of firms seems to have outgrown the traditional Coase-Williamson transaction-cost framework with its market-hierarchy dichotomy. We propose to integrate an institutional dimension to enhance the theory of the firm and the analysis of real-world organisational forms. This institutional dimension is conceptualised as an original institutional (Veblenian) dichotomy that ranges between instrumental cooperative networking and ceremonial encapsulation (lock-in), as power- and status-seeking. Thus, a more comprehensive two-dimensional organisational space is drafted, which can better map the numerous and diverse forms of production and innovation systems, and serve to address questions of their emergence as spatial clusters and corporate networks. In addition to ideal market and hierarchy, it provides the ideal solution of institutionalised network cooperation as a third vanishing point and corner. The resulting organisational triangle is considered a heuristic for inter-firm organisational research. As a check of its usefulness, this device is applied to recent developments in the global corporate economy.