By the 1980s and 1990s, two concepts were coming increasingly into widespread

use: the concept of a core and that of a network. The former usually referred to
what a firm considered to be its primary business or businesses and was
commonly used when it decides it had overextended itselft from the ponrt of view
of efficient and profitable management. The network concept first appeared in
nineteenth century literatura in the form of industrial clusters (Marshall 1890) and
later as industrial districts as described by Best (1990). Both these concepts
describe numerous small and mdium-sized firms which operate together closely,
depending on each other for all shorts of services, including technology.

Perharps a kind of intermdiate stage between the hierarchical firm and what we
shall call the business Alliance is exemplified by whats Bartlett and Ghoshal (1993)
have called a context model of the managerial firm. This model draws heavily on
sociology and on organization theory (see organization behaviour) and on the role
of trust and responsability in the motivation of people. It is designed to remove as
fas as posible any tight hierarchical administrative controls, to reduce substantially
administrative controls, to reduce substantially the numerous layers of
management in the firm and to create a large number of decentralized small-
businnes units consistinf of front-line managers with small teams directly in
touch with customers, suppliers and financial providers. A layer of middle
management fulfils whats is essentially a supportive role.

In on case described, such a large number of so-called front-line manager-
entrepreneurs were created, on whom was devolved such a high degree of power
and authority to make independent decisions, including investment decisions, that
what might be called a colections of small quasi firms seemed to have been
created, the personnel of which had been successfully socialized to the values of
the firm, accepting strong personal incentives to Excel in meeting targets. Thus,
strong network relationships thtoughout the firm could be relied on more tan
normally to mainstain the administrative cohesion of the firm. This type of
operational structure base don strongly manipulative guiding and advisory
management adumbrates a different firm context as the growth of the firm excedes
the older types of administrative hierarchical control.

The formal contractual manifestation of associations between firms became
increasingly common in the 1980s and 1990s. Although firms continued to grow
through vertical and horizontal takeovers of one kind or another, there arose a
growing tendency for a number of them to join together in corporate alliances or
cooperatibe arrengements, not necessarily with monopolistic intent but as a means
of gaining mutual Access to such resources as technology, regional markets and
information services. Sometimes, long-term associations were formed; in cases
where specific operations needed to be carried out, shorter-term associations were
formed.

A large variety of terms have been applied to the various ways of organizazing
such types of economic activity which do no fall easily into market or firm
categories, such as quasi firms, relationship-enterprises value-added
partnerships, virtual corporations or global webs. The term networking ws
applied to a wide variety of relationships between firms, including cooperative
agreements, alliances, associations, licensing, relational contracts, franchising and
R&B arrangements. It is difficult to be more precise, since the question of whether
any given arrangement should be regarded as part of an existing network or
alliance or as part of the firm is essentially the problema of defining with any
precisin the fuzzy boundaries of the firm. The crucial point is the extent to which
the administrative structure or managerial reach of the firm in question is believed
to be significantly involved.

Even in developing countries it had been noted in the 1980s that multinational
corporations had been changing their strategy and moving increasingly towards
less highly integrated operations, and away from 100-percent equity and control
towards active participation in complex types of association