A brief glance at the evolution of strategic focus reveals dramatic shifts in relevant context with potent implications for organization and control, rooted in the reversal of a century-old “long wave” centered on internalizing various economic activities to control them, that gave rise to the integrated firm, the corporation, and the conglomerate (Chandler, 1977; Chandler and Salsbury, 1974). Where companies from the mid-1860s to roughly the 1980s created strategic advantage by internalizing activities for greater stability, efficiency, and control, increasingly since then advantage has centered more on faster learning and innovation (IBM_Global_Services, 2006; Prahalad and Krishnan, 2008; Schramm, 2006). But no company can control all the resources needed for innovation (Prahalad and Krishnan, 2008), so creating strategic advantage has increasingly required collaborative, outsourced, strategic alliances (Culpan, 2002; Doz et al., 2001; Doz and Hamel, 1998) and “open innovation” (Chesbrough et al., 2006; Chesbrough, 2003). Moreover, such innovation embraces new business and service models, not just new products: thus new models of business are emerging, centering on networked interactions (Chesbrough, 2006; Sirkin et al., 2008; Tuomi, 2002).

These developments pose critical theoretical and practical challenges for traditional conceptualizations of organizational control. First, most organizational theory of control has fixated on employees of “the firm,” yet contemporary relational networks explicitly transcend firm boundaries, to tap into expanded expertise. Much prior discussion addresses control in terms of hierarchical models, economic rationality, and managers' ability to enforce compliance (Bijlsma-Frankema and Costa, Chapter 13), but these are not really options among firms in voluntary association.