Structure and Governance of Networks: Cases of Franchising and Co-operative Chains

Abstract

A variety of inter-organizational networks have emerged between hierarchy and market. They are either internal networks in the same industries such as franchising and co-operatives, or external networks among organizations operating in the supply chain such as alliances. In the distribution industry, a strong tendency towards hierarchic corporate chains is observed as shown by the Swedish cases, but successful franchise chains and co-operative federations also exist. These networks are not necessarily regulated by top–down authority and require specific coordination mechanisms to solve inherent governance problems. This paper concludes the loosely connected networks are coordinated by specific collaboration mechanisms but have to solve the governance problems in the internal and external networks.