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At the same time, the controlling function was retained, because the reputations of the businessmen on the supervisory board stood as a guarantee that the legal requirements were being adhered to, and these businessmen faced the prospect of being excluded from the entire network in the event of a legal violation.

There are two principal approaches explaining the emergence of corporate networks. Simultaneously, social cohesion among executives was strengthened — in addition to their meeting one another in clubs and associations — by regular contact on supervisory boards. Companies constantly had to develop strategies in order to keep the unavoidable dependence on others to a minimum. Thus they, for example, established links with organizations which could provide the goods and services required. After the stock market crash in New York on October 25th, , the global economic crisis gradually gripped most of the industrial countries, reaching its lowest point in As well as numerous companies, banks also collapsed in many countries, triggering panic among the population, which not only feared for their jobs, but for their savings also.

The photo shows Berlin residents concerned about their deposit accounts. These corporate networks, which were based to a degree on capital involvement, were part of the social elite, whose homogeneity and exclusivity were primarily maintained by shared values and a specific lifestyle, but also by means of collective recruitment mechanisms. Soon after the National Socialist seizure of power, the Jewish members of the German commercial elite were expelled from the business network, and the network experienced a partial change.

However, Jewish businessmen and bankers were able to retain their influence for a time in some cases, particularly in cases where their knowledge and contacts remained valuable.

Although the subsequent structural break of initially looked likely to result in the commercial elite being replaced, many businessmen in West German companies retained their positions. In the area of methodology, Weber sought a resolution of the dualism between the humanities and the natural sciences, and he argued that academic research must be freed from moral value judgements. His theory on the contribution of protestant ethics to the formation of modern capitalism was particularly widely read. Internal company structures can be understood as a changing organizational form, which partially resembles a network or develops in that direction.

Therefore, even actors within a company cannot simply be explained with reference to their fixed positions in a hierarchical company organigram. Paul Reusch — was chairman of the board of management of GHH for many years and he used a comprehensive reporting system to control the company. This reporting system, which gave him a monopoly on information, did not correspond to the official executive structures. This enabled him to control geographically dispersed and legally independent parts of the group and to ensure that his power could not be challenged by the family which owned the company.

The modern company of the 19th and 20th centuries constituted a social field of activity in which people with conflicting interests competed with each other for influence and were at the same time integrated into networks which did not necessarily correspond to the formal company hierarchy.

In this way, he managed to control the individual parts of the company, which were geographically far removed from each other and legally independent of one another, and to prevent the family who owned the company from undermining his power within the company. Fundamental to this topic is the idea — borrowed from economics — that cooperating organizations which are located in the same particular region will benefit from their close proximity to one another. Along with close collaboration with other institutions, this facilitates an easy transfer of knowledge and technology related to innovations in the areas of development, processes, production and organization, thereby generating a competitive advantage over other companies.

The economic advantage of such clusters therefore lies in specialization in one sector respectively closely related industries, in the availability of qualified workers and in the easy local transfer of knowledge through formal and informal contact between the companies. Although competition is viewed as the most potent instrument for the acquisition of information and the selection of knowledge, innovative clusters demonstrate the limitations of the market as an allocation mechanism and the importance of cooperation in the production of goods.

The unpredictability of results as a basic principle of the discovery of new knowledge is therefore not specific to competitive structures, but also applies to relationships of cooperation. Due to its advantageous geographical location, the city of Manchester in North-Western England became the industrial centre of the United Kingdom in the 19th century.

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The numerous rivers and streams of the region and its proximity to the coast meant that many workshops engaged in the textile industry and suppliers established themselves there as early as the 18th century. The city and its economic output grew rapidly as a result. This map from illustrates how dying workshops and other workshops marked in green settled near the Medlock river on what was then the edge of Manchester, thereby profiting from their close proximity to one another.

Around a pre-industrial hub of textile production and metal-working with a financial and trade centre, a large number of specialized workshops sprang up, resulting in a further development of the tool-making and mechanical engineering industry, in an increasing division of labour, and consequently in a growing competitive advantage over companies operating alone in other parts of the country.

A Brief History of Economic Networks in the Early Modern and Modern Worlds

This increased competitiveness and capacity for innovation did not exist solely in companies and sectors in capitalist economies. The success of the entire printing machine manufacturing sector in East Germany has been attributed to the planned-economy network structures of non-commercial institutions and research facilities. In this context, some economists assert that only competition in a market free from intervention can produce multiple and dispersed sources of knowledge.

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These include exchange relationships of a material kind, such as trade and credit networks or connections based on capital, as well as the transfer of knowledge between members of the commercial elite and the transfer of knowledge about technological innovations in regional clusters. However, research in this area to date has focused on phases and forms of migration as well as on familial relationship structures and is therefore more closely related to social history and migration sociology. The diversity of the network concept and its possible applications — from network as a metaphor to the strict methodology of social sciences network analysis — has resulted in a flood of historical network research in the areas of economic and business history.

Regardless of this broad methodological spectrum, economic networks are — according to the logic of the network concept — fundamentally directed at the avoidance of commercial risks, at improving organizational efficiency, and at the attainment of an improved competitive position. Though much of the research to date has focused on particular companies and sectors in an individual country, networks generally do not end at national borders. European and global trade networks, such as the transnational trade networks of German merchants in the British Empire during the 18th century, are an impressive example of this.

In these networks, the exchange of commercial commodities, both in the form of goods and in the form of knowledge, is usually accompanied by the transfer of cultural content. European economic networks are therefore closely connected with cultural transfer between the European states. This transnational perspective contains enormous scope for the further theoretical and methodological development of historical network research. By overcoming national borders, hidden economic relationship structures at the European level and in the global context can be identified, and existing analytical instruments can be optimized.

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Chandler, Alfred D. Clemens, Gabriele B. Jahrhundert zwischen privaten Netzwerken und institutioneller Geldleihe, in: Gabriele B. Clemens ed. Coleman, James S. Davis, John R. Denzel, Markus A. Jahrhundert, Stuttgart Barnett ed. Dyas, Gareth P. Erickson, Bonnie H. Erker, Paul et al. Berghahn et al.

Gestrich, Andreas et al. Probleme und Perspektiven einer historischen Verflechtungsanalyse, in: Bettina Joergens et al.

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Reitmayer, Morten et al. Jahrhunderts, in: Curt W.

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Rose, Mary B. Stegbauer, Christian: Netzwerkanalyse und Netzwerktheorie: Ein neues Paradigma in den Sozialwissenschaften, 2nd edition, Wiesbaden Stokman, Frans N. Wilson, John F. Wilson et al.