The Network Firm as a Political Coalition

Abstract

The article uses a qualitative case study of fifteen years in the production network that revolves about Fiat Auto to depict the “network firm” as a political coalition. It used a discussion of radical outsourcing of production in the 1990s, a short-lived and ill-fated alliance with General Motors in 2001, a descent to the brink of bankruptcy in 2004, a return to profitability by 2007, and, finally, the sudden acquisition of control of Chrysler in 2009 to reconstruct James March’s classic Carnegie model of the firm in light of the blurring of organizational boundaries. Using concepts drawn from the literatures on organizational networks, social movements, and organizational politics, it demonstrates that strategic decision making at Fiat and at key suppliers shaped, and were shaped by, an interplay of frames and relational embedding within and across organizational boundaries. It therefore builds theory by showing how coalitional politics shape and are shaped by the shifting boundaries of the firm, and by showing how those coalitional politics affect the evolution of the production networks that prevail across many contemporary industries

Politics and Power in Multinational Companies: Integrating the International Business and Organization Studies Perspectives

“…coercion. These two papers, by Whitford and Zirpoli (2016) and Dörrenbächer and Gammelgaard (2016), have the closest links with current debates in IB research. The first paper focuses on MNCs as network firms with fragmented power structures that are conceptualized as 'bundles of coalitions'.…”

Interorganizational Relationships as Political Battlefields: How Fragmentation within Organizations Shapes Relational Dynamics between Organizations

“…Framing organizations as fragmented entities, organizational politics scholars (e.g., Glynn, 2000;Monin et al, 2013;Whitford & Zirpoli, 2016) highlight that different organizational actors can rely on different belief systems and practices to provide meaning to their social reality. This situation, where different belief systems and practices co-exist, is described as a situation of competing logics (Pache & Santos, 2010).…”

“…However, we acknowledge that coalition building can also span organizational boundaries. For instance, studying the history of the automotive company Fiat, Whitford and Zirpoli (2016) describe how coalition building between engineers of Fiat and engineers of its suppliers impacted important insourcing and outsourcing decisions. Exploring such coalition-building across organizational boundaries may not only be relevant in dyadic inter-organizational contexts, but can also help to move forward our understanding of even more complex collaborative phenomena, such as multiparty constellations and innovation ecosystems.…”

Directionality in collaborative innovation: governing inter-firm relationships in the supply-chain

“…The Italian automotive industry is characterized by a significant fragmentation of the supply system in a plethora of small and medium size firms, highly specialized on small phases of the production process, and with very different attitudes towards innovation activities. Integrating knowledge for innovation purposes is then one of the more problematic challenges of the Italian automotive supplier network, pushed by the industry evolution towards the development of a complex and articulated network of inter-organizational relationships (see for an overview Whitford and Zirpoli, 2016, Enrietti and Whitford, 2005, Zirpoli and Caputo, 2002. In the last decade, in fact, the national carmaker (Fiat now Fiat Chrysler Automobiles), whose production choices deeply affected all small and medium suppliers, decided to reduce dramatically internal production levels 2 .…”

“…Conversely, it has been showed that the governance toolkit (Whitford & Zirpoli, 2016), innovation competences, and relative bargaining position (Robertson & Langlois, 1995) might influence the governance of vertical relationships. Notably, in vertical supply chains firms occupying different tiers have often very different characteristics.…”