Network dyads in entrepreneurial settings: A study of the governance of exchange relationships

Social control in network organizational forms is examined through an inductive field study of a sample of dyadic relationships established by high-growth entrepreneurial firms. The social dimensions of the transactions are central in explaining control and coordination in the exchange structures. A process model of network formation is presented that highlights the importance of reputation, trust, reciprocity, and mutual interdependence. The network form is proposed as an alternative to vertical integration for high-growth entrepreneurial firms. The data also suggest that studying the network form of governance can provide insights into firm growth.