Caught in the web: the dual nature of networks and its consequences.

Relations between a firm and organizations in its political and economic environment are increasingly seen as crucial for the successful functioning of that firm, both in the narrow economic sense, and at the broader level of reaching sustainability. However, attention seems to be focused on the positive qualities of such networks of organizations. In this paper it is argued that networks of organizations have a dual nature, and do not just provide possibilities for collective learning and problem solving. At the same time, such networks consist of dependency relations that provoke power strategies, which result in outcomes reflecting the distribution of power rather than leading to an optimal result. By means of a case study, this dual nature is explored. It is shown that the actors involved in the process of developing an alternative to the disposable milk carton in the Netherlands are embedded in dependency relations. Several of these actors attempt to create problem solving networks, and succeed. However, the already existing dependency relations between the actors involved influence the direction, outcome, and timing within these networks. Using criteria for network performance, this dual nature of networks is assessed. © 1998 John Wiley & Sons, Ltd and ERP Environment.