Abstract
Using Stern's “network process” approach to interorganizational relations, the decline of the International Air Transport Association (IATA) from cartel to trade association is analyzed. IATA's loss of power and the erosion of stability in the international civil aviation network are traced to the emergence of a strong “proactive” regulatory style within the U.S. Civil Aeronautics Board, to increased competition for domain in the area of price setting, and to IATA's failure to maintain legitimacy with governments and the traveling public. In addition, it is suggested that industry networks are more vulnerable to external threats where they lack legal autonomy, where there are basic ideological differences built into a joint interorganizational structure from the beginning, and where the chief network “broker” is unable to mediate the majority of external contacts of network members. The case of IATA indicates that the relationships among a multiorganizational action set, the larger network in which it is located, and the task environment are complex and deserve further systematic research.
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