THE DEVELOPMENT OF NETWORKS – ALTERNATIVE STRUCTURES FOR FIRMS
THE DEVELOPMENT OF NETWORKS – ALTERNATIVE STRUCTURES FOR FIRMS

Summary/Abstract: Firm theories explain that the appearance and the development of firms is influenced by transaction costs optimization, competitive advantage and knowledge creation. These answers are rooted in Coase’s “The nature of the firm” article, appeared in 1937. One question which we address within this article is whether firms represent appropriate structures for the businesses developed today all over the world. Networks are presented as alternative structures for firms and supply chains. The increased interconnectivity between firms has diminished the importance of firms’ boundaries, while the supply chain concept, as a value chain, is a limited concept in explaining the real situation. However, networks of firms evolve and are important concepts in today’s internet world.

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