The Working Firm

Deborah E. Lange

Chapter Chapter 4 in Cliques and Capitalism, 2011, pp 77-85 from Palgrave Macmillan

Abstract: Abstract This chapter describes the “Working Firm.” A diagram below, Figure 4.1, depicts it. The Working Firm, composed of lower and middle-level managers and their employees, must function in a substantive sense. The firm cannot exist unless it serves some real purpose, and it is these human resources that make that happen. The ways in which these people are connected with each other as coworkers is governed by network and embeddedness theory, because informal understandings predominate (see the middle layer in Figure 4.1). However, they are organized around some formal functional basis that is built on standard myths—a department structure that we see mimicked in most firms (see the bottom layer in Figure 4.1). Thus, the informal aspect of organizations prevails in terms of how firm actors actually work together, but it is based on a formal legitimized structure and institutional theory is helpful for understanding these aspects. Overlaying Figure 4.1 Theoretical Layers of the Working Firm. this, in more recent times, is professionalization (see the top layer in Figure 4.1). This additional layer is explained by institutional theory forces. I will describe each of these layers in turn.

Keywords: Agency Theory; Small World; Business Unit; Institutional Theory; Network Governance (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-01619-5_5

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DOI: 10.1057/9781137016195_5

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