Pergamon 0956-5221(95)00030-5 Scand. J. Mgmt, Vol. 12, No. 2, pp. 189-205, 1996 Copyright © 1996 Elsevier Science Ltd Printed in Great Britain. All rights reserved 0956-5221/96 $15.00 + 0.00 OPPORTUNISM, ORGANIZATIONAL ECONOMICS AND THE NETWORK APPROACH NICOLAI J. FOSS Institute of lndustrial Economics and Strategy, Copenhagen Business School, Denmark CARSTEN A. KOCH Department of Management, Odense Universi~, Denmark (First received September 1993; accepted in revised form October 1994) Abstract -- This article discusses the concept of opportunism, familiar from Williamsonian transaction cost economics, and its role in business studies. Various arguments for the importance and centrality of the concept are presented. The transaction cost framework is compared to the Swedish network approach. Specifically, opportunistic behavior seems to be implicitly present in the claims of network theory. The overall conclusion is that many network arguments are not in substantial conflict with transaction cost economics. And by joining forces, the approaches may provide a more comprehensive and dynamic theory of economic relationships. A number of new arguments are brought to bear on these issues. Copyright © 1996 Elsevier Science Ltd Key words: Transaction cost economics, network approach, opportunistic behavior. Though the wicked were fewer in number than the righteous, yet because we cannot distinguish them, there is a necessity of suspecting, heeding, anticipating, subjugating, self-depending, ever incident to the most honest and fair-conditioned (Thomas Hobbes, De Cive). 1. INTRODUCTION During the last decade organizational economics -- particularly Oliver E. Williamson's transaction cost economics (Williamson, 1985)* -- has penetrated increasingly into management science, making an impact on marketing (Anderson and Schmidtlein, 1984), strategy (Reve, 1990), and organizational theory (Miller, 1992). An increasing part of the curriculum traditionally taught in business schools is now influenced or potentially influenced by organizational economics. What is remarkable from a sociology of science perspective about this development is the fervor -- on the part of both foes and friends -- that has accompanied the spread of organizational economics in much of the academic community.t Although the field of *For a technical overview of the streams in organizational economics which differ from Williamsonian transaction cost economics, see Holmstrom and Tirole (1989). Our use of the term "organizational economics" is less inclusive than that which is found in Barney and Ouchi (1988); for example, we exclude evolutionary economics. tSee in particular the exchange between Perrow (1981) and Williamson and Ouchi (1981 a and b). 189