ABSTRACT
This chapter examines how transnational corporations organise industrial networks, which roles the organisations play and what is their economic rationale. Organisational innovations such as the large multiregional corporations are, in his view, first of all designed to economise on transactions costs and not for anti-competitive purposes. Understanding present turbulence and socio-economic change is still based on rather weak theoretical foundations. A promising contribution to this important task by Nelson and Winter should be of interest to geographers studying industrial systems. Few actors in segments of the market combined with uncertainty, complexity and human opportunism will increase the cost of doing transactions in the market and force firms to integrate in some way. In the oil industry trilateral governance is a normal organisational structure when highly specific investments like offshore platforms are being built. Orthodox understanding of competition in factor and product-markets is that goods and services sold or bought in the market are homogeneous.
