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The Network Firm as a Single Real Entity: Beyond the Aggregate of Distinct Legal Entities


  • Virgile Chassagnon


This conceptual paper starts with a question regarding the nature of the firm: is the firm a nexus of contracts or a real entity? To answer this question, the article departs from a critique of firm contract theory that usually focuses on moral personification to propose some theoretical foundations of the firm as a real entity. This provides crucial insights for the analysis of modern complex organizations. Then, this paper applies the real entity paradigm to the case of the network firm: is the network firm merely a collection of distinct legal entities or a single real entity? The integrating and unifying role of intra-network power relationships is emphasized, and some legal and economic aspects of the network firm are discussed to clarify the argument that the network firm is a singular real entity composed from distinct legal entities. Considering the network firm as a single real entity has strong policy implications in terms of employment protection rights and politico-legal responsibilities.

Suggested Citation

  • Virgile Chassagnon, 2011. "The Network Firm as a Single Real Entity: Beyond the Aggregate of Distinct Legal Entities," Journal of Economic Issues, Taylor & Francis Journals, vol. 45(1), pages 113-136.
  • Handle: RePEc:mes:jeciss:v:45:y:2011:i:1:p:113-136 DOI: 10.2753/JEI0021-3624450107

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    References listed on IDEAS

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    Cited by:

    1. Virgile Chassagnon & Bernard Baudry, 2016. "American versus French labor and employment law : a critical review of the analysis of employment relationship in contract economic theories," Working Papers halshs-01371870, HAL.
    2. Virgile Chassagnon, 2014. "Toward a Social Ontology of the Firm: Reconstitution, Organizing Entity, Institution, Social Emergence and Power," Journal of Business Ethics, Springer, vol. 124(2), pages 197-208, October.
    3. Chassagnon, Virgile, 2012. "Une analyse historique de la nature juridique de la firme," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 12.
    4. Chassagnon, Virgile, 2014. "Consummate cooperation in the network-firm: Theoretical insights and empirical findings," European Management Journal, Elsevier, vol. 32(2), pages 260-274.
    5. Virgile Chassagnon, 2012. "Pouvoir et coopération dans la firme et entre les firmes," Post-Print halshs-00818301, HAL.

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