Localised Co-ordination and Trust: Tentative Findings from In-depth Case Studies

The paper argues that the furniture industry, because it is low-tech, mature, and thus easy to grasp technology-wise, is an excellent case for investigating some basic notions on the rise within the economics of organisation. The paper concentrates on the growing incidence of flexible co-operation arrangements between specialised, localised, furniture firms; the role of informal social institutions (such as norms; conventions; language; and trust) for co-ordination between such specialised firms; and the crucial importance of learning processes for bringing about this economic organisation as well as the social institutions that support it. The paper empirically investigates localised knowledge and competencies amongst Danish furniture producers. Empirical findings are presented illustrating the importance of geographical proximity and trust for cooperation and co-ordination between specialised furniture producers, and the importance of learning processes for the creation of trust.