Department of Economics


Date of this Version



Published in Industrial Policies After 2000, edited by Wolfram Elsner and John Groenewegen (Boston/Dordrecht/London: Kluwer Academic Publishers, 2000), pp. 235-284.


Copyright © 2000 Kluwer Academic Publishers. Used by permission.


Social scientists have come to understand that society is a set of integrated values, beliefs, institutions, technology, and ecological systems as explicitly laid out in Figure 1 (Hayden 1988, 1997). Societal integration and organization takes place through the on—going processing of overlapping institutions and their organizations. The components of transorganizational frameworks, as demonstrated in Figure 1, create and structure the networks within which organizations such as business corporations and government agencies function. “Trans” as used in this sense means across. Across organizational networks normative criteria are provided by social beliefs, technology, and ecological systems (Hayden, 1998). From basic criteria, numerous rules, regulations, and requirements are codified by various institutional organizations such as courts, corporations, and government agencies. Transorganizational frameworks guide multi-organization networks made up of overlapping organizations. Thurman Arnold explained in his Folklore of Capitalism that modern industrial systems are the integration of huge organizations that are coordinated with different kinds of organizations. Corporations, government agencies, universities, and inter-organizational compacts, for example, function together and are dependent upon each other (Arnold, 1937). They are one of another.

Much of the coordination and planning among the different organizations is finalized through multi-organizational contracts and agreements. Thus, analysis to meet the challenges of industrial policy needs to incorporate the inter-organizational forms whose content, interpretation, and final function are determined by the actions taken in dynamic transorganizational networks. For such an accomplishment, the analytical methodology needs to be transdisciplinary as is implicit in Figure 1.

The purpose here is methodological, substantive, and policyoriented. The purpose is to analyze the ramifications of a cost-plus contract arrangement that is very influential in determining the costs and activities of a particular corporate/government network in the United States. The network is built around the five-state Central Low-Level Radioactive Waste Compact (CIC) to include its policy-making Commission, a number of corporations, and several government agencies. The main methodological concern is how to model a transorganizational network utilizing the knowledge of transdisciplinary models. To accomplish this, the social fabric matrix (Hayden, 1982; Groenewegen, 1988; Meister, 1990) is combined with system dynamics (Radzicki, 1990; Gill, 1996).

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