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The Emergence of
Organizations and Markets
This page intentionally left blank
The Emergence of
Organizations and Markets
press.princeton.edu
HM786.E44 2012
302.3'5—dc23 2012004342
10 9 8 7 6 5 4 3 2 1
This volume is dedicated to
H a r r ison C . W h i t e ,
il maestro della bottega
Nihil ideo quoniam natumst in corpore, ut uti
possemus, sed quod natumst id procreat usum.
of Sociology, 2010) analyzes generative tensions application and its ramifications for careers,
in the historical evolution of business groups. identities, and public science.
The article won the 2011 Viviana Zelizer Award Spiro Maroulis is an assistant professor in the
for best article in economic sociology, as well as School of Public Affairs at Arizona State Univer-
the 2011 Roger V. Gould Prize. sity, and Associate Director for Policy Informat-
Kurt Sandholtz is a doctoral candidate at Stan- ics at the ASU Decision Theater. His research
ford’s Center for Work, Technology, and Organi- addresses problems involved with understand-
zation, and a visiting instructor at BYU Marriott ing the relationship between individual and
School of Management. His work has appeared collective behavior, particularly why strategic
in Organization Studies and Strategic Entrepre initiatives and change efforts so often provoke
neurship Journal. resistance and unanticipated responses inside or-
Kelley Packalen is an associate professor of ganizations. Spiro received his B.S.E. from Duke
entrepreneurship in the School of Business at University, M.P.P. from Harvard University, and
Queen’s University in Kingston, Ontario. Her Ph.D. from Northwestern University.
research is at the intersection of entrepreneur- Lee Fleming is the director of the Coleman
ship and organization theory. She is broadly Fung Institute of Engineering Leadership in the
interested in the connection between the career UC–Berkeley College of Engineering. Previously
biographies of founders and the networks they he was the Albert Whitehead III Professor of
develop for their nascent firms. Kelley received Business Administration at the Harvard Busi-
her Ph.D. in industrial engineering from Stan- ness School. Working with large databases, he
ford University. has empirically modeled invention as a process
Kjersten Whittington is an assistant profes- of recombinant search, the social networks of
sor of sociology at Reed College. In addition to inventors, and the emergence of leadership in
regional dynamics, her research addresses how open innovation communities. He is currently in-
the structural and network organization of firms vestigating how non-compete contracts influence
influences scientists’ career trajectories and inno- inventor mobility, firm strategy, and regional
vative output. Her work on this topic focuses on dynamics.
sex disparities in productivity in light of inventor Lyra Colfer holds a Ph.D. in information, tech-
collaborations across academic and industrial nology, and management from Harvard Uni-
science contexts. She is also studying gender and versity. Her research examines the relationship
motherhood dynamics among science profes- between organizational structure and product
sionals and, with collaborators, gendered deci- architecture. She has applied multiple methods to
sion making in venture capital contexts. evaluate the mirroring hypothesis, which posits
Jason Owen-Smith is an associate professor of that the structure of a development organization
sociology and organizational studies at the Uni- “mirrors” the design of the product it develops.
versity of Michigan. He examines how science, She is currently working in the commercial soft-
commerce, and the law cohere and conflict in ware industry as a strategic consultant.
contemporary societies and economies. Together Alexandra Marin is an assistant professor of
with collaborators, Jason works on projects sociology at the University of Toronto. Her re-
that examine the dynamics of high-technology search examines how social networks operate in
industries, the commercialization of academic the labor market, focusing on how information
research, and the science and politics of human holders make choices to share or withhold infor-
embryonic stem cell research. mation. She is currently examining occupation
Jeannette A. Colyvas is an assistant professor closure and its effects on status attainment and
in the School of Education and Social Policy network-based job search in the Canadian labor
and (by courtesy) Sociology and the Institute market.
for Policy Research at Northwestern Univer- Jonathan McPhie is currently a product man-
sity. She holds a Ph.D. from Stanford University. ager at Google, Inc. While there, he has worked
Her published work has appeared in Manage on a variety of projects covering online commu-
ment Science, Research Policy, Minerva, Socio nications, web search, location services, and so-
logical Theory, and Research in Organizational cial networking. Jonathan previously worked as
Behavior. Jeannette’s current research examines a research associate at Harvard Business School,
university-industry interfaces, focusing on the where he conducted analyses of collaboration
translation of basic science into commercial patterns in the U.S. patent database. Jonathan
Contributors ■ xi
holds bachelor’s and master’s degrees in com- Siobhán O’Mahony is an associate professor
puter science from Harvard University. at the Boston University School of Manage-
Fabrizio Ferraro is an associate professor of ment. Her research explores how technical and
strategic management at IESE Business School. creative projects organize. She has examined
He holds a Ph.D. in management from Stan- high-technology contractors, open source pro-
ford University. He has studied the emergence grammers, artists, music producers, Internet
of novel organizational forms and institutions, start-ups, and corporate consortiums. She is
including open-source software communities interested in how people create organizations
and sustainability reporting. He is now study- that promote innovation, creativity, and growth
ing the emergence of the socially responsible without replicating the bureaucratic structures
investing field in finance and, more broadly, the they strive to avoid. Her work has appeared in
relationship between social values and financial Administrative Science Quarterly, Organiza
investing. He has published in the Academy of tion Science, Academy of Management Journal,
Management Journal, Academy of Management Research in Organizational Behavior, Research
Review, and Organization Science. His article Policy, Research in the Sociology of Organiza
“Economics Language and Assumptions: How tions, Industry and Innovation, and the Journal
Theories Can Become Self-fulfilling” won the of Management and Governance.
2006 Best Paper Award from the Academy of
Management Review.
This page intentionally left blank
Illustrations
1.1. Multiple-network ensemble in 3.1. Representative 5-skill hypercycles
Renaissance Florence 6 at equilibrium 77
1.2a. Partnership systems in Renaissance 3.2. Survival of autocatalytic networks:
Florence: genesis 13 hypercycle chemistry 78
1.2b. Partnership systems in Renaissance 3.3. Survival of autocatalytic networks:
Florence: catalysis 13 ALL chemistry 82
1.3a. Dedicated Biotechnology Firms 3.4. Survival of autocatalytic networks:
(DBFs): genesis 14 ALL chemistry, 3+ cycles 82
1.3b. Dedicated Biotechnology Firms 3.5. Population of cells: ALL chemistry 83
(DBFs): catalysis 14 3.6. Rule complexity: ALL chemistry 84
1.4a. Medieval corporations in Dugento 3.7. Subsystem complexity: ALL
Tuscany: genesis 17 chemistry 85
1.4b. Medieval corporations in Dugento 3.8. Free riding: ALL chemistry 87
Tuscany: catalysis 17 4.1. Hypercycles linked through
1.5a. Joint-stock companies in early “International Trade” 100
modern Netherlands: genesis 18 4.2. Hypercycles linked through
1.5b. Joint-stock companies in early “Reciprocity” 106
modern Netherlands: catalysis 19 4.3. Cellular autocatalysis or “Families” 107
1.6a. Nineteenth-century Germany: 4.4. Functional aggregation of linked
genesis through conflict displacement 20 hypercycles 112
1.6b. Nineteenth-century Germany: 5.1. Sequence of emergence of Dugento
catalysis 21 Tuscan merchant-banks 128
1.7a. Soviet Central Command economy: 5.2. Total number of papal letters,
genesis 22 1243–68 131
1.7b. Soviet Central Command economy: 5.3. Number of papal letters
catalysis 23 mentioning Italian bankers 131
1.8a. Chinese market economy: genesis 24 5.4. Italian bankers in extract from
1.8b. Mao’s communist economy and liberate rolls of king of England 134
party: catalysis 25 6.1. Multiple-network ensemble in
2.1. Examples of catalytic and Renaissance Florence 171
autocatalytic chemical cycles 35 6.2. Number of cambio bankers, by
2.2. The chemoton 37 social class, in the fourteenth century 196
2.3. Simplified chemistry of life 38 7.1. Migration and homology: the birth
2.4. Reductive citric-acid cycle 42 of Netherlands and the joint-stock
2.5. Changes in understanding of the tree company 210
of early life 45 8.1. Late nineteenth-century Germany
2.6. The hypercycle model of Eigen as dual inclusion 237
and Schuster 47 8.2. Conflict displacement 238
2.7. Full-blown genetic autocatalytic 8.3. Hieratic authority 240
machinery 48 8.4A and B. War with Austria (1866) 242
2.8. Autocatalysis of polymers 52 8.4C. War with Austria: conflict
2.9. Jain and Krishna’s ecological model displacement at political party level 243
of autocatalysis 54 8.5. Kulturkampf (1871–75) 250
2.10. Fontana’s λ-calculus model of 8.6A–C. Antisocialism and protectionism
autocatalysis 55 (1878–1989) 253
xiv ■ Illustrations
17.8. Xerox PARC and Hewlett Packard nodes, for Boston and Silicon Valley’s
component, Silicon Valley’s fourth largest components in 1989 541
largest component in 1989, by assig- 17.12. Size of component after removal
nee and importance of inventions 532 of specified proportion of component’s
17.9. Raychem component, Silicon nodes, for Boston and Silicon Valley’s
Valley’s third largest component in second largest components 541
1989, by assignee and importance of 18.1. Media citations of Debian GNU/
inventions 534 Linux, 1997–2002 553
17.10. Boston’s largest component in 18.2. Degree distribution of the Debian
1989, by assignee and importance of network, 1997–2002 560
inventions 538 18.3. Log-log plot of the cumulative
17.11. Size of component after removal degree distribution of the Debian
of specified proportion of component’s network, 1997–2002 561
This page intentionally left blank
Tables
3.1. Distribution of cycle lengths (ALL 6.8. Relative experience of nonfamily
chemistry) 86 cambio banking partners 197
5A.1. Bonsignori company members 6.9. Family types of cambio banking
and their transactions, 1250–56 146 partnerships 199
5A.2. Bonsignori company members 10.1. Banks and the loans-for-
and their transactions, 1261–63 147 shares deal 326
5A.3. Bonsignori company members 10.2. From design to emergence 329
and their transactions, 1265 148 11.1. Relative market share of cellular
5A.4. Bonsignori company members operators in Moscow and
and their transactions, 1266–67 149 St. Petersburg 335
5A.5. Bonsignori company partners 11.2. Ownership of the cellular
and their capital, 1289 149 operators in Moscow and
5B.1. Scali company members and their St. Petersburg 337
transactions, 1229–59 150 11.3. Cellular telephony penetration
5B.2. Scali company members and their rates in Moscow and St. Petersburg,
transactions, 1261–69 152 1993–2000 338
5B.3. Scali company members, 1282–84 153 12.1. Scenario 1: domestic networks
5C.1. Tolomei company members crowding out foreign capital 350
and their transactions, 1223–60 154 12.2. Scenario 2: foreign eradication
5C.2. Tolomei company members of networks directly and by
and their transactions, 1262–79 156 demonstration effects 351
5C.3. Scotti and Tolomei company 12.3. Scenario 3: a radically
members and their transactions, dual-segregated economy 351
1255–62 157 12.4. Distribution of large-firm
5D.1. Ricciardi company members capitalization by type, Hungary,
and their transactions, 122?–1266 158 2001 351
5D.2. Ricciardi company members 12.5. Local network positions 359
and their transactions, 1272–86 160 12.6. Pathways’ typical sequences of
5D.3. Ricciardi company members, network positions 361
doing business with Pope Martin IV 162 12.7. Sizable foreign ownership in 2001 363
6.1. Industrial composition of 1385–99 12.8. Capitalization in firms with
partnership systems 175 political ties in 2001 368
6.2. Social and political embedding of 12.9. Network sequence pathways,
businessmen in multiple companies 176 political ties, and foreign ownership 369
6.3. Political mobilization of cambio 13.1. Prominent early biotech firms 388
bankers and international merchants 181 13.2. Distinctive features of early
6.4. Political and social embedding of biotech firms 390
cambio bankers 183 13.3. Science vs. commerce:
6.5. Political and social embedding of a continuum 394
merchant-bankers 184 13.4. Two variants of a new form 398
6.6. Political and social embedding of 13.5. Publication and citation counts
cambio banking partnerships 189 for ten-year period post-IPO 399
6.7. Political and social embedding of 13.6. The creation of novelty, step-
merchant-banker partnerships 190 by-step 405
xviii ■ Tables
13.7. What happened to the first 18.1. Growth in the Debian keyring
generation? 407 network 550
14.1. Trends in biomedical patenting, 18.2. Descriptive statistics of Debian
by metropolitan region 437 developers, 2001–2 550
16.1. Laboratory approaches to 18.3. Correlation coefficients in 2001 551
commercializing research, 1970–82 502 18.4. Correlation coefficients in 2002 551
16.2. Recombined laboratory 18.5. Logistic regression coefficients
approaches to commercializing for the regression of New
research, 1970–82 505 Maintainer Committee membership
16.3. Empirical claims about science on selected independent variables
production and ABM mechanisms 508 in 2001 557
17.1. Summary of reasons for 18.6. Logistic regression coefficients
aggregation and non-aggregation for the regression of New
in Silicon Valley and Boston 526 Maintainer Committee membership
17.2. Patent analysis of component on selected independent variables
robustness 542 in 2002 557
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