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Abstract
The debate about the governance of complex systems of production represents a rich branch
of the literature of applied organization theory. The particular application to agro‐related
networks is a relevant example since agriculture plays new roles in modern society. The core
of the analysis is centered in the rationale for allocation of residual decision rights and
distribution of the rights regarding the value created. Contributions based in transaction cost
economics, resource‐based view, dynamic competences, and incomplete contract theory
explore different dimensions related to the allocation of property rights.
The question of how joint strategies are defined, and how value added (or subtracted) is
shared among network players is still relevant. Indeed, the questions of how residual decision
rights are defined and how residual rewards of resources applied in production are shared
are relevant for the modern theory of organizations in general. Most of the traditional
literature considers the transaction as the unit of analysis, following the tradition of the
alignment hypothesis proposed by Williamson (1996). Hence the literature as developed so
far deals with two limitations. First, the dyadic perspective, which narrows a complex and
multidimensional task down to two actors, one transaction, and a choice of internal or
contractual mechanisms of coordination. Second, the traditional perspective places its
attention on the existing value, whether real or potential, that can be revealed by choosing
the efficient mechanism of allocation of authority. This is only part of a larger and more
complex frame, where value generation becomes a central question.