The Sources and Consequences of Embeddedness for the Economic Performance of Organizations: The Network Effect
Abstract
In this paper, I attempt to advance the concept of embeddedness beyond the level of a programmatic statement by developing a formulation that specifies how embeddedness and network structure affect economic action. On the basis of existing theory and original ethnographies of 23 apparel firms, I develop a systematic scheme that more fully demarcates the unique features, functions, and sources of embeddedness. From this scheme, I derive a set of refutable implications and test their plausibility, using another data set on the network ties of all better dress apparel firms in the New York apparel economy. Results reveal that embeddedness is an exchange system with unique opportunities relative to markets and that firms organized in networks have higher survival chances than do firms which maintain arm's-length market relationships. The positive effect of embeddedness reaches a threshold, however, after which point the positive effect reverses itself. Embeddedness 1
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Organizations that cultivate working relationships with allies in their communities should be more likely to achieve public recognition, recruit participants, and develop leaders.
“Finally, organizations that cultivate working relationships with allies in their communities should be more likely to achieve public recognition, recruit participants, and develop leaders (Galaskiewicz 1985;Uzzi 1996;Diani and McAdam 2003).”
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- Authors
- Uzzi, B.
- Corresponding author
- Uzzi, Brian
- ORCID
- Uzzi, Brian
- Venue
- American Sociological Review
- Publisher
- SAGE Publications
- Published
- 1996-08
- Volume
- 61
- Issue
- 4
- Pages
- 674
- ISSN
- 0003-1224 (ISSN-L)
- OpenAlex
- W286295083
- Cited by
- 6,013
- References
- 3
- Citations by year
- 2026: 106 · 2025: 141 · 2024: 169 · 2023: 217 · 2022: 178 · 2021: 265 · 2020: 258 · 2019: 241 · 2018: 253 · 2017: 298 · 2016: 265 · 2015: 338 · 2014: 271 · 2013: 345 · 2012: 312
- FWCI
- 117.33
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- American Sociological Review (publishedVersion)
- Topics
- Social Sciences › Sociology and Political Science › Social Capital and Networks
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Theory and Institutions
- Social Sciences › Business, Management and Accounting › Organizational Behavior and Human Resource Management › Management and Organizational Studies
- Keywords
- embeddedness, network effects, economic performance, exchange systems, network structure, business survival, threshold effects
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