In his seminal 1972 essay on the “organization of industry,”G. B. Richardson argued that economists had generally viewed firms as “islands of planned co-ordination in a sea of market relations.” Business historians, too, had focused predominantly on the firm (or entrepreneur) and the market. In drawing attention when he did to the “dense networks of co-operation and affiliation by which firms are inter-related,” Richardson was on the forefront of what would become a noticeable shift in the analysis of business organization. There were many reasons for this transition. In particular, the comparative success of the “Japanese model,” with its “intermarket” keiretsu disturbed standard assumptions. (Richardson himself pointed to Japanese firms as thriving examples of interfirm relations.) Furthermore, it was becoming clear that in many emerging industries networked relations of industrial clusters were increasingly important. Comparative research suggested that new-technology firms with tightly drawn boundaries were at a competitive disadvantage compared to firms that had developed cooperative links not only to suppliers but even to competitors. To explain such developments, economists, organizational theorists, and business historians alike looked beyond not only the conventional boundaries of the firm but also the conventional boundaries of their disciplines. In particular, they turned to theories of networks, the topic of this special issue.

Most studies of the early-modern Atlantic world give its emergence a sense of inevitability. Historians who have tried to understand networks in the early-modern Atlantic have focused solely on their successes, which skews our understanding. This analysis of the role played by Scottish networks in the production, distribution, and consumption of Madeira wine during that product's golden age, which lasted from 1640 to 1815, attempts to correct the record. Networks succeeded when they led to profitable sharing of information, goods, and services, and they failed when individuals were unable to get networks to function for them. Problems arose among the parties in the course of negotiating terms for sharing, monitoring the agreements, responding to disasters, and estimating the costs of transactions. At times, networks worked so well that they metamorphosed into other social and commercial forms, helping to establish critical nonmetropolitan links within and between the British and Portuguese empires.

Diversified trading networks have recently drawn a great deal of attention. In the process, the importance of diversity has perhaps been overemphasized. Using the trade in port wine from Portugal to Britain as an example, this essay attempts to show how a market once dominated by general, diversified traders was taken over by dedicated specialists whose success might almost be measured by the degree to which they rejected diversification to form a dedicated “commodity chain.” The essay suggests that this strategy was better able to handle matters of quality and the specialized knowledge that port wine required. The essay also highlights the question of power in such a chain. Endemic commodity-chain struggles are clearest in the vertical brand war that broke out in the nineteenth century, which, by concentrating power, marked the final stage in the transformation of the trade from network to vertical integration.

Very different commodity chains had been established over the centuries in France to produce and sell wines as diverse as champagne, fine old clarets, or ordinary table wines. The major shortages caused by the vine disease phylloxera after 1875 forced merchants to search for new sources of supply, often in foreign countries or through the production of artificial wines. When domestic production revived, however, the recovery was not accompanied by a noticeable reduction in these new supplies, with the result that prices, as well as growers' profitability, fell sharply after the turn of the twentieth century, strengthening the merchants' power in the various commodity chains. To overcome this situation, growers in three very different wine-producing areas, namely the Midi, Bordeaux, and Champagne, used their political influence to achieve government intervention in order to control fraud and establish regional appellations or producer cooperatives, which helped them win back some of their market power from merchants.

This study looks at the formation of multinationals and relates that process to the emergence of institutions favorable to economic growth. It compares the development of such institutions from 1960 in four European countries: the United Kingdom, France, the Netherlands, and Portugal. The focus of the study is a global industry—alcoholic beverages—in which brands, marketing knowledge, and distribution channels have been critical. In order to understand why some nations succeed in developing multinationals and others do not, different views of the determinants of national wealth, such as trade, institutions and organizations, and corporate governance, are examined. Whereas three of the countries developed leading multinationals in alcoholic beverages, Portugal did not succeed in doing so. The study concludes that, in marketingbased industries, both the type of product and the institutional environment influence the ability of firms to become leading multinationals.

Because of Alfred D. Chandler Jr.'s widely influential books and articles, historians of management and of business have often taken a firm, especially a manufacturing firm, as their unit of analysis. Despite its usefulness as an organizing concept, the firm-based approach does not take into consideration the management of networked systems, which have spread widely and posed major managerial challenges in recent decades. In the following essay, I shall compare the firm and the networked-systems approaches, but first I should stress that I am not dealing with networked systems in general, which are numerous and vary greatly in form. My attention, instead, is focused upon networked electric-power systems.

In his article “From Firm to Networked Systems,” Thomas Hughes introduces concepts, such as “infrastructure” and “networking,” that are critical to today's managerial system, but, by focusing on electric utilities, the story he tells does not go beyond the arrival of the new science of electronics in the early twentieth century. Professor Hughes, therefore, does not consider the critical role of high-technology industries–that is, those that commercialized and brought to market new products based on new scientific learning—in exploring the evolution of managerial systems.