An extensive body of knowledge exists on network outcomes and on how network structures may contribute to the creation of outcomes at different levels of analysis, but less attention has been paid to ...understanding how and why organizational networks emerge, evolve, and change. Improved understanding of network dynamics is important for several reasons, perhaps the most critical being that the understanding of network outcomes is only partial without an appreciation of the genesis of the network structures that resulted in such outcomes. To provide a context for the papers in this special issue, and with the broader goal of furthering network dynamics research, we present a framework that begins by discussing the meaning and role of network dynamics and goes on to identify the drivers and key dimensions of network change as well as the role of time in this process. We conclude with theoretical and methodological issues that researchers need to address in this domain.
To assess the effects of a firm's network of relations on innovation, this paper elaborates a theoretical framework that relates three aspects of a firm's ego network-direct ties, indirect ties, and ...structural holes (disconnections between a firm's partners)-to the firm's subsequent innovation output. It posits that direct and indirect ties both have a positive impact on innovation but that the impact of indirect ties is moderated by the number of a firm's direct ties. Structural holes are proposed to have both positive and negative influences on subsequent innovation. Results from a longitudinal study of firms in the international chemicals industry indicate support for the predictions on direct and indirect ties, but in the interfirm collaboration network, increasing structural holes has a negative effect on innovation. Among the implications for interorganizational network theory is that the optimal structure of interfirm networks depends on the objectives of the network members.
We use patant data from the worldwide semiconductor industry from 1984 to 1994 to study the effect of the structure of organizational knowledge basas, or the patterns of coupling between their ...elements of technical knowledge, on the usefulness of inventions and knowledge-base malleability. We argue that organizational variations in coupling patterns between knowledge elements can be reflected in a spectrum of knowledge-bbase structures--varying from fullydecomposable (the knowledge base n composed of distinct clusters of knowledge elements coupled together with no significant ties between clusters) through nearly decomposable (knowledge clusters are discernable but are connected through cross-cluster couplings) to non-decomposable (no knowledge clusters emerge, as the couplings are pervasively distributed)--and that organizations may differ in the way they use their knowledge because of variations in their knowledge-base structure, rather than because of differences in the knowledge elements themselves. Results show that a nearly decomposable knowledge base increases the usefulness of the inventions generated from it, as measured by patent citations, and also the knowledge base's malleability or capacity for change.
I argue that the linkage-formation propensity of firms is explained by simultaneously examining both inducement and opportunity factors. Drawing upon resource-based and social network theory ...literatures I identify three forms of accumulated capital-technical, commercial, and social-that can affect a firm's inducements and opportunities to form linkages. Firms possessing these capital stocks enjoy advantages in linkages formation. However, firms lacking these accumulated resources can still form linkages if they generate a radical technological breakthrough. Thus, I identify paths to linkage formation for leading as well as peripheral firms. I test these arguments with longitudinal data on technical collaborative linkages in the global chemicals industry.
We examine how firms search, or solve problems, to create new products. According to organizational learning research, firms position themselves in a unidimensional search space that spans a spectrum ...from local to distant search. Our findings in the global robotics industry suggest that firms' search efforts actually vary across two distinct dimensions: search depth, or how frequently the firm reuses its existing knowledge, and search scope, or how widely the firm explores new knowledge.
The embeddedness of interfirm relationships in a social structure can engender order in new tie formation, but competitive incentives may undermine the order that firms seek to achieve and lead to ...tie dissolution. We examine how relational embeddedness (history of interactions), positional embeddedness (network centrality), and structural embeddedness (common partners) influence tie stability, focusing on unplanned joint venture dissolution. Prior work suggests that relational embeddedness facilitates alliance stability. This study shows that positional embeddedness does not promote stability, but structural embeddedness does help sustain alliances, particularly when partners have strong incentives to pursue self-interest at the expense of joint benefits.
In this paper, we examine the emergence of resources. Our analysis of technological capability acquisition by global U.S.-based chemical firms shows that the emergence of resources is inherently ...evolutionary. We find that path-creating search that generates resource heterogeneity is a response to idiosyncratic situations faced by firms in their local searches. Two such idiosyncratic situations--technology exhaustion and expansion beyond national markets--trigger firms in our sample to create unique innovation search paths. We also find that along a given path firms experiment in order to find the correct investment--in fact, some organizations seem to take a step backward for two steps forward--further demonstrating the evolutionary nature of the resource creation process.
Recent research shows that preexisting network structure constrains the formation of new interorganizational alliances. Firms that are poorly embedded in a network structure are less likely than ...richly embedded firms to form alliances, because they lack informational and reputational benefits. This study examines the types of ties that poorly embedded firms can form to overcome the constraints that their structural positions impose, in turn helping to explain how firms' actions can transform existing network structures. We argue that poorly embedded firms are more likely to participate in ties characterized by social asymmetry than in ties characterized by structural homophily. We analyze the terms of trade that socially asymmetric partners negotiate for alliance governance and discuss how such alliances influence network dynamics. To test our arguments, we use longitudinal data on the alliance activities of 97 global chemical firms from 1979 to 1991.
This paper examines the impact of acquisitions on the subsequent innovation performance of acquiring firms in the chemicals industry. We distinguish between technological acquisitions, acquisitions ...in which technology is a component of the acquired firm's assets, and nontechnological acquisitions: acquisitions that do not involve a technological component. We develop a framework relating acquisitions to firm innovation performance and develop a set of measures for quantifying the technological inputs a firm obtains through acquisitions. We find that within technological acquisitions absolute size of the acquired knowledge base enhances innovation performance, while relative size of the acquired knowledge base reduces innovation output. The relatedness of acquired and acquiring knowledge bases has a nonlinear impact on innovation output. Nontechnological acquisitions do not have a significant effect on subsequent innovation output.
We present a model that explains how established firms create breakthrough inventions. We identify three organizational pathologies that inhibit breakthrough inventions: the familiarity trap - ...favoring the familiar; the maturity trap - favoring the mature; and the propinquity trap - favoring search for solutions near to existing solutions. We argue that by experimenting with novel (i.e., technologies in which the firm lacks prior experience), emerging (technologies that are recent or newly developed in the industry), and pioneering (technologies that do not build on any existing technologies) technologies firms can overcome these traps and create breakthrough inventions. Empirical evidence from the chemicals industry supports our model.
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