Managing Network Resources: Alliances, Affiliations, and Other Relational Assets

342 Pages·2007·1.55 MB·English

by  Ranjay Gulati

Managing Network Resources
Alliances, Affiliations and Other Relational Assets
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Managing Network
Resources
Alliances, Affiliations and Other
Relational Assets
Ranjay Gulati
1
3
GreatClarendonStreet,Oxfordox26dp
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Tomyparentswhogavemethethirsttolearn
To my teachers, colleagues, and students from whom I have
learnedsomuch
Tomyfamilywhohavesupportedmeonthisjourneytolearn
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(cid:0) PREFACE
Myresearchoverthelastdecadehasshownthatinterorganizationalnetworks
not only influence the creation of new ties between organizations but also
affect their design, evolutionary path, and success. I subsequently extended
some of these ideas to other types of interorganizational ties in contexts
rangingfromlargetoentrepreneurialfirms.Thisbookbringstogethermuch
of this research under one fold. Most of the chapters draw heavily from my
publishedarticles,manyofwhicharecoauthored.Atthestartofeachchapter,
Iclearlyindicatethepublishedsourcefromwhichthechapterhasbeendrawn
and also acknowledge my, coauthors, if any for that published work. While
I have adapted the front end of these chapters to draw out the common
threadofnetworkresourcesthatcutsacrossthebook,theresearchreportedis
fromtheoriginalarticlesmentionedattheoutsetofthechapter.Somedetails
onthedataandmethodshavebeenabbreviatedforthebook.Whilesomeof
the chapters in this book are based on solo-authored articles, in the case of
coauthoredchaptersitisimportanttonotethattheresearchreportedisbased
oncollaborativeworkwiththelistedauthors.
This book is more than simply a retrospective collection of my published
work.Allthechaptershavebeenadaptedtocohereunderacommonunifying
theme. In doing so, I have recrafted the conceptual underpinnings of the
articles to allow them to be parts of a broader story. In some sense this was
anexerciseformetotrytodrawoutacommonthreadthatranacrossmany
ofmypriorworksandtodosomeretrospectivesense-making.
Indrawingonthesociologicalparadigmofembeddednesstoexplaininter-
firmbehavior,Idevelopheretheconceptof‘networkresources’asanimpor-
tant but overlooked factor to explain both firm behavior and outcomes in
interorganizational collaboration. Network resources are valuable resources
thataccruetoafirmfromitstieswithkeyexternalconstituentsincluding—
butnotlimitedto—partners,suppliers,andcustomers,andthusexistoutside
a firm’s boundaries and within its social networks. Networks thus become
conduits that make available to firms valuable resources and information
that may reside within their partners. The ties are thus sources of valuable
resources and information that can influence strategic behavior by altering
theopportunitysetofactionsavailabletoafirmandalsooutcomesbymaking
availableresources.Theymayalsobeviewedbyexternalconstituentsassignals
oflegitimacyinasmuchastheysignaltheavailabilityofkeyresourcestothose
firms. Consequently, the manner and extent to which a firm is embedded
in a prior interorganizational network enable firms to obtain resources and
viii PREFACE
information that significantly influence the behavior and also key outcomes
fortheparticipatingfirms.
Whileseveralchaptersinthefirsttwopartsofthisbookfocusondemon-
strating the impact of network resources originating in a firm’s network of
prioralliances,Ialsoreflectinseveralsubsequentchaptersonotherpossible
networks from which such resources may be derived and how these influ-
ence firm behavior and outcomes. Further, I consider the likely dynamic of
co-evolution of disparate networks in which the accumulation of one may
facilitatetheacquisitionoftheother,openingupmultipleconduitsforfirms.
This suggests a complex interplay across disparate networks that shape each
other and through this coevolutionary process impact the cumulative net-
work resources that become available for participating firms. For example,
in some chapters I examine how accumulated prior alliances of firms shape
the creation of new such ties. In others I consider the role of interpersonal
tiessuchasboardinterlocksininfluencingallianceformation.Finally,Ialso
studytheinfluenceofprioremploymentandboardtiesofupperechelonsof
entrepreneurial firms on the likelihood of landing partnerships with higher
prestige investment banks. The settings in which these ideas are explored
rangefromlargeUSandglobalcorporationstostart-upsinthebiotechnology
sector.
Inlookingbackatsomeofmyownpublishedworkthatisincludedhere,I
discoveredthatIhadnotalwaysreferredtothecoreconstructinthosearticles
asnetworkresources.ThetermsIusedbeforerangefrom‘embeddedness’to
‘relationalcapital’.Inbringingthesedisparateworkstogether,Ihavetriedto
streamlinethetermsandbringeverythingunderthesinglerubricofnetwork
resources. I hope that by doing so, I bring greater clarity to the reader and
sharpenthemessagewhilealsoprovidingaconsistentthreadthatrunsacross
thiswork.Asthesearticleswerenotwrittenwiththisunifyingthemeinmind,
theycontainelementsthatwereimportantintheoriginalpresentationofthe
researchbutarenotgivencenterstagehere.InnowaydoIwishtodetractfrom
thecontributionsoftheoriginalresearch.Myde-emphasizingofaparticular
pointissimplytomaintainmyfocusonthesinglethemearoundwhichthis
book is woven. Yet in bringing a range of published work under a common
umbrella,Iruntheriskofmakingthatumbrellatoolarge.Iacknowledgethese
concernsandinthefinalchapterreflectontheneedforfurthersharpeningof
theconceptofnetworkresources.Thefieldhasalreadytakenthismessageto
heart,andmanyrecentstudies—myownandthoseofothers—havesoughtto
furtherdelineatetheconceptofnetworkresources.
Thisbookhasnotbeenasolitaryaffair.ItistheproductofajointeffortI
beganfifteenyearsagowhenIfirstembarkedonaresearchcareer.Numerous
colleagueshavebeenverygenerousinguidingmythinkingandwithoutthem
thisworkwouldnothavebeenpossible.Iwouldliketoacknowledgethemany
peopletowhomIoweadebtofgratitudeforhelpingmeshapethisresearch
PREFACE ix
program.Imustfirstthankmydoctoraldissertationcommittee(thelateAage
Sorensen, Nitin Nohria, and Paul Lawrence) who worked tirelessly with me
to formulate these research questions. Upon graduation, I was fortunate to
workwithanexcellentsetofresearchcollaboratorswhojoinedmeindiscov-
ering new ideas andgenerouslyallowed me to use some of those collectively
researchedpapersforthisbook.Theseresearchersinclude:MartinGargiulo,
Monica Higgins, David Kletter, Harbir Singh, Lihua Olivia Wang, and Jim
Westphal.Iwouldalsoliketothankanumberoffriendsandcolleagueswho
generouslyagreedtoreadearlierdraftsoftheentiremanuscriptandprovide
detailed comments. These include: Bruce Carruthers, Glenn Hoetker, Dovev
Lavie,NitinNohria,N.Venkatraman,andJimWestphal.Ialsohadanumber
of helpful conversations about the book with Ha Hoang, Tim Rowley, M.
B. Sarkar, and Aks Zaheer. I would also like to thank the following indi-
viduals who helped me attend to the details of pulling this book together
and carefully read the entire manuscript, made editorial suggestions, and
cleaned up all references and text. These included: Lynn Childress, Alberto
Gastelum,KateHeinze,LindaJohanson,LisaKhan-Kapadia,JamesOldroyd,
AndyRich,SharmiSurianarain,MaximSytch,TomTruesdell,BartVanneste,
FranzWohlgezogen,andSachinWaikar.Anumberofmycolleagueshaveover
theyearsbeencatalystsformanyoftheideasthathaveappearedinmypub-
lished worksthatwerethebasisforthis book.They include:GautamAhuja,
BharatAnand,RonBurt,JerryDavis,YvesDoz,BobDuncan,JeffDyer,Paul
Hirsch, Tarun Khanna, David Krackhardt, Ravi Madhavan, Mark Mizruchi,
JackNickerson,WillieOcasio,ChristineOliver,PhanishPuranam,Hayagreeva
Rao,JitendraV.Singh,andEdZajac.Finally,Iwouldliketoacknowledgemy
family.MyparentsSatyaPaulandSushmaGulatinurturedinmethedesireto
learn that has sent me on this lifelong journey. My wife Anuradha has given
me the encouragement and support so very essential for such a long-term
effort, while my children Varoun and Shivani provide the joy of distraction
thatallowsmetostepawayfromitperiodically.