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The Nature of the Business Group: A Social Network Perspective

Department of Sociology, Columbia University, New York, USA

This article takes as its point of departure the ambiguous and inconsistent way in which the concept of the ‘business group’ and other associated concepts has been used in the literature to describe and label different types of interfirm relationships. To remedy this state of affairs, a preliminary conception of the business group is presented and elaborated upon, in which the business group is conceptualized as comprising three analytically separable elements: network(s) of interrelated firms, the institutionalized logic of reciprocity, and the intersubjective interpretation of actors inside as well as outside the group. Further, a social network perspective on organizations is suggested for the analysis of business groups.

Key Words: business networks • economic institutions • intercorporate relations • systems of exchange

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