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Functionalism Revisited: A practice based Functionalism
Unformatted Document Text:  Functionalism Revisited 12 should be understood as formations of relationships; (2) such relationships emerge from the interactions among the “players”; (3) the relationships at any moment are temporary; and (4) imperfect competition (un-seized structural hole) provides opportunities for organizations (Burt, 1976, 1980, 1982, 1992; Burt & Carlton, 1989). Dependencies. Investigating the dependencies among the collaborating firms, most network studies naturally incorporate RDT perspectives. In general, studies find that the resource capacity of a firm is positively related to the influence of the organization (Galaskiewicz, 1979; Aldrich, 1976). Granovetter’s argument about the embeddedness of economic actions in social network attracts researchers in this area (1985; 1992). Gulati, for example, acknowledges the importance of “personal” relations among key individuals as a source for interorganizational relationship formation (See also, Ring & Van de Ven, 1992). This notion of personal relationship makes researchers regress to the studies of board interlock patterns (Mizruchi, 1984; Mizruchi & Stearns, 1988; Galaskiewicz & Wasserman, 1989). Few discussions have been made about the comparison between asset specificity (TCE perspective) and strategic interdependence (RDT). In general, asset specificity refers to an a posteriori status between two organizations, while resource strategic interdependence is an a priori status of an organization (or between organizations). The former leads a firm to a defensive strategy against opportunistic behavior of the other organization (by setting up in-housing facility). Its longitudinal aspect is based on the instability of opportunistic behavior. That is, as an interorganizational relationship develops, the other organization’s taking advantage of the situation is assumed. On the other hand, the latter guides a firm to seek out a complementary function from the other organization while anticipating giving out its valuable assets to the other firm (exchange). The longitudinal aspect of this approach emphasizes the stability of interdependence. That is, mutual needs for each other would remain stable along with the relationship. There are empirical studies from RDT and network analysis perspectives pointing to durable and stable interorganizational relations and structures. Gulati (1995; 1999) has managed to tackle the complex duality of group structure and group members. Gulati’s argument has a strong point in explaining the unharmonious relationship between asset specificity and interdependencies. That is, the ironic anticipations of two theoretical backgrounds can be resolved form the social aspects of business practices. Gulati (1995) argues that the experiences of network participation are “a salient catalyst” for potential alliance formation. His longitudinal study measures some network properties of organizations in three industrial areas by year, and analyzes how such properties are related to the future (next year’s) alliance pattern. His findings indicate that structural governance patterns emerge from the groups of

Authors: Kim, Hyo.
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Functionalism Revisited 12
should be understood as formations of relationships; (2) such relationships emerge from the interactions
among the “players”; (3) the relationships at any moment are temporary; and (4) imperfect competition
(un-seized structural hole) provides opportunities for organizations (Burt, 1976, 1980, 1982, 1992; Burt
& Carlton, 1989).
Dependencies. Investigating the dependencies among the collaborating firms, most network studies
naturally incorporate RDT perspectives. In general, studies find that the resource capacity of a firm is
positively related to the influence of the organization (Galaskiewicz, 1979; Aldrich, 1976). Granovetter’s
argument about the embeddedness of economic actions in social network attracts researchers in this area
(1985; 1992). Gulati, for example, acknowledges the importance of “personal” relations among key
individuals as a source for interorganizational relationship formation (See also, Ring & Van de Ven,
1992). This notion of personal relationship makes researchers regress to the studies of board interlock
patterns (Mizruchi, 1984; Mizruchi & Stearns, 1988; Galaskiewicz & Wasserman, 1989).
Few discussions have been made about the comparison between asset specificity (TCE
perspective) and strategic interdependence (RDT). In general, asset specificity refers to an a posteriori
status between two organizations, while resource strategic interdependence is an a priori status of an
organization (or between organizations). The former leads a firm to a defensive strategy against
opportunistic behavior of the other organization (by setting up in-housing facility). Its longitudinal aspect
is based on the instability of opportunistic behavior. That is, as an interorganizational relationship
develops, the other organization’s taking advantage of the situation is assumed. On the other hand, the
latter guides a firm to seek out a complementary function from the other organization while anticipating
giving out its valuable assets to the other firm (exchange). The longitudinal aspect of this approach
emphasizes the stability of interdependence. That is, mutual needs for each other would remain stable
along with the relationship.
There are empirical studies from RDT and network analysis perspectives pointing to durable and
stable interorganizational relations and structures. Gulati (1995; 1999) has managed to tackle the
complex duality of group structure and group members. Gulati’s argument has a strong point in
explaining the unharmonious relationship between asset specificity and interdependencies. That is, the
ironic anticipations of two theoretical backgrounds can be resolved form the social aspects of business
practices. Gulati (1995) argues that the experiences of network participation are “a salient catalyst” for
potential alliance formation. His longitudinal study measures some network properties of organizations in
three industrial areas by year, and analyzes how such properties are related to the future (next year’s)
alliance pattern. His findings indicate that structural governance patterns emerge from the groups of


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