The governance of design alliances in embedded settings: Evidence from the Italian design-intensive furnishings industry

Recent dialogue between economics and sociology has led management scholars to acknowledge that economic action is embedded in both dyadic relationships ( relational embeddedness ) and more intricate structures of relationships ( structural embeddedness ). However, we still know too little about how social networks affect the governance of economic activity. In this respect, several scholars conceptualize the network as a distinct organizational form. This is in sharp contrast with standard Transaction Costs Economics (TCE), wherein market and hierarchy are the only two pure organizational forms, with their own coordination mechanisms, while networks are hybrid forms , based on intermediate mechanisms. The present paper tries to overcome the TCE logic under several respects. In particular, it is aimed at contributing to the debate on the governance of economic activity (Coase, 1937 in Economica; Williamson, 1991 in ASQ; Uzzi, 1997 in ASQ) by shedding light on the coordination mechanisms that characterize network governance (i.e., social mechanisms). Indeed, while an extensive body of research has investigated a number of social mechanisms individually, we still lack a thorough understanding of these mechanisms, of their structural and relational antecedents, and of how they interact with each other over time to coordinate economic exchange.