The social-spatial constitution of business organizations: A geographical perspective

Business organizations are important subjects in organizational studies, but their social-spatial constitution is largely caricatured in the existing theoretical literature. This paper examines the nature and operations of business organizations, arguing that the concept of business organizations embraces more than their rigid separation from the external environment. Business organizations should rather be conceptualized as causal agencies capable of exercising their peculiar modes of rationality; they gain causal powers from ongoing networks of social relations embedded in society and space. The quest for control, power and strategic advantages provides the central dynamics to a continuous process of structuration between business organizations and their network relations. In practice, business organizations become a network form of governance structure that replaces "spaces of firms" by "spaces of network relations". Because business organizations are embedded in network relations, they must also be embedded in geographically specific localities in order to reproduce themselves. This notion of the geographical embeddedness of business organization is further illustrated with an example of Chinese business organizations from Hong Kong. Some elements of a future research agenda are proposed in the concluding section.