Network
Interpretations of Non-Market Bureaucracies:
The Case of a State Children's Services Agency
Mark T. Shanley and Michael
Lounsbury
Abstract
Explanations of organizational behavior provided by economic approaches
such as transaction costs are often stretched to subsume situations
that inherently contradict baseline economic assumptions. We argue
that under conditions where there is little or no market discipline
and high human asset specificity, economic efficiency arguments
are not useful. Under such conditions, the development of trust,
mutuality of exchange, and social comparison processes highlighted
by network perspectives should provide more theoretical and explanatory
leverage. Through an analysis of the organization of work at a state
childrens' services agency, we develop suggestive evidence for how
network theory can extend our understanding of nonmarket bureaucracies.
Such a shift from economic to network analytical frames has important
policy implications.
Mark T. Shanley, J. L. Kellogg Graduate School
of Management, Northwestern University Michael Lounsbury, J. L. Kellogg Graduate School of Management,
Northwestern University
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