The Embeddedness of Selfish Routines: How Routines are Replicated in Business Networks

Abstract

The notion of routines as a powerful metaphor for explaining organizational capabilities and the evolution of organizations has been widely accepted as a central issue in evolutionary economics. The configuration and management of routines across organizational, and ownership, boundaries involves a range of specific managerial and strategic issues which are not addressed in the current literature on routines. However, as new less-hierarchical and more fluent organizational forms evolve, where boundaries between the organization and the environment are increasingly arbitrary, the role of routines beyond the organizational perimeter becomes increasingly relevant. It is argued here that social networks sustain interpersonal routines, which not only transgress organizational boundaries but on occasion also incubate new organizations in order to ensure their continued existence. This paper presents an overview of the routine concept and an argument for applying it in a network embeddedness context. Two case studies are presented, covering examples from the Danish dairy and the Danish machinery industry.