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The Next Catastrophe by Charles Perrow

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Appendix BNetworks of Small Firms

The question arises as to whether more reciprocity will be obtained in a system that has a network of firms versus a system that consists of just one firm, hierarchically organized. One could argue that the successful single firm that has brought within it most of the components needed will have a high degree of reciprocity among the divisions, departments, and work groups. But such a setup is unlikely to have multiple suppliers and each component has only one customer, so there is a loss in resiliency. On the other hand, one might say that the competition among a variety of networked firms might inhibit reciprocity. However, the literature stresses the sense of common fate and sense of community in these networks, ...

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