ABSTRACT
This chapter discusses some hypotheses on reasons for using networks, coalitions and ownership structures. The first section reviews traditional theories of Foreign Direct Investment (FDI). The second enumerates the possible forms of international business collaboration found in Professional Business Services (PBS) firms. The third section outlines the major characteristics of PBSs. The last section proposes an explanation for the use of various forms of organization, most of which are between markets and hierarchies. In PBSs, there is generally a very high degree of interaction between client and service provider and a high level of customization. Most importantly, it shows us how management decides on the boundaries of the firm when coalitions or networks are preferred to ownership and how they are managed. It is likely in the future that networks may become the common form of organizational structure, allowing international interaction, not limited to any specific market place.
