Working Paper Series, Department of Industrial Economics & Strategy, Copenhagen Business School
No 98-13:
The Genesis and Progress of the Socially Embedded Firm.
Henrik Sornn-Friese
Abstract: In his seminal article Economic Action and Social
Structure: The Problem of Embeddedness Granovetter argued that economic
action is embedded in social relations and structures that affect its
functioning, and that economic action should be analyzed as such. In
theories of the business firm the idea that firms are socially embedded is
widely acknowledged, but social context is typically understood as an
exogenous force. When embeddedness is actually accounted for in theories of
the business firm it is mostly as independent variable highlighting the
structural aspects of embeddedness at the expense of more relational
aspects. This short paper traces the origin and branching of embeddedness
in business studies. It asserts that the concept of embeddedness is
recurrently used as a concept symbol to reclassify aspects of social
context, but not in a way that gives credit to the endogeneity of social
context to the actions of the business firm. Finally, it is suggested that
the notions of evolution and mutualism are fruitful for understanding how
and why firms are embedded in different ways and to different degrees.
Keywords: Embeddedness; economic activities; a theory of action; social structure; evolutionary economics; business studies; economic relationships; information; learning; (follow links to similar papers)
JEL-Codes: B2; B4; L2; M1; (follow links to similar papers)
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