This article synthesizes the large but diverse literature on organizational legitimacy, highlighting similarities and disparities among the leading strategic and institutional approaches. The analysis identifies three primary forms of legitimacy: pragmatic, based on audience self-interest; moral, based on normative approval: and cognitive, based on comprehensibility and taken-for-grantedness. The article then examines strategies for gaining, maintaining, and repairing legitimacy of each type, suggesting both the promises and the pitfalls of such instrumental manipulations.

https://www.jstor.org/stable/pdf/258788.pdf

Managing Legitimacy: Strategic and Institutional Approaches

This paper focuses on dynamic capabilities and, more generally, the resource-based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing. They are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed ‘best practice’). This suggests that they are more homogeneous, fungible, equifinal, and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic, stable processes with predictable outcomes. In contrast, in high-velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well-known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high-velocity markets, it is on selection. At the level of RBV, we conclude that traditional RBV misidentifies the locus of long-term competitive advantage in dynamic markets, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high-velocity markets. Copyright © 2000 John Wiley & Sons, Ltd.

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Dynamic capabilities, what are they?

In this article we offer a view that suggests that a firm's critical resources may span firm boundaries and may be embedded in interfirm resources and routines. We argue that an increasingly important unit of analysis for understanding competitive advantage is the relationship between firms and identify four potential sources of interorganizational competitive advantage: (1) relation-specific assets, (2) knowledge-sharing routines, (3) complementary resources/capabilities, and (4) effective governance. We examine each of these potential sources of rent in detail, identifying key subprocesses, and also discuss the isolating mechanisms that serve to preserve relational rents. Finally, we discuss how the relational view may offer normative prescriptions for firm-level strategies that contradict the prescriptions offered by those with a resource-based view or industry structure view.

https://www.jstor.org/stable/pdfplus/259056.pdf

The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage

After briefly explaining why social capital (civil society) is important to democracy, Putnam devotes the bulk of this chapter to demonstrating social capital’s decline in the United States across the last quarter century. (See Putnam 1995 for a similar but more detailed argument.) While he acknowledges that the significance of a few countertrends is difficult to assess without further study, Putnam concludes that crucial factors such as social trust are eroding rapidly in the United States. He offers some possible explanations for this erosion and concludes by outlining the work needed to consider these possibilities more fully.

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“Bowling Alone: America’s Declining Social Capital”

Stakeholder theory has been a popular heuristic for describing the management environment for years, but it has not attained full theoretical status. Our aim in this article is to contribute to a theory of stakeholder identification and salience based on stakeholders possessing one or more of three relationship attributes: power, legitimacy, and urgency. By combining these attributes, we generate a typology of stakeholders, propositions concerning their salience to managers of the firm, and research and management implications.

https://www.jstor.org/stable/pdfplus/259247.pdf

Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of who and What Really Counts

Industrial districts and regional clusters depend on the networks that arise from reciprocal linkages among co-located organizations, while physical proximity among firms can alter the nature of information and resource flows through networks. We consider the joint effects of geographic propinquity and network position on organizational innovation using negative binomial count models of patenting activity for U.S.-based life science firms in industrial districts and regional clusters across a 12-year time period, 1988-1999. We find evidence that regional agglomeration and network centrality exert complementary, but contingent, influences on organizational innovation. Results show that in the high velocity, research-intensive field of biotechnology, geographic and network positions have both independent and contingent effects on organizational innovation. The influence of centrality in local, physically co-located partner networks depends on the extent to which firms are also embedded in a global network comprising physically distant partners. Such global centrality, however, alters how proximity to two important classes of organization - other biotechnology firms and public sector research organizations, such as universities, research institutes, and teaching hospitals - influences innovation. Regional agglomeration shapes the character of information and resource flows through networks, while much of what makes industrial clusters region-like involves the structure of their internal networks. We conclude that network effects persist both independently and interdependently with geographic variables, and regional characteristics influence the degree to which centrality enhances innovation.

Networks, Propinquity, and Innovation in Knowledge-Intensive Industries

Contributors ix List of Illustrations xiii List of Tables xvii Acknowledgments xix Chapter 1 The Problem of Emergence John F. Padgett and Walter W. Powell 1 Part I Autocatalysis 31 * Chapter 2 Autocatalysis in Chemistry and the Origin of Life John F. Padgett 33 * Chapter 3 Economic Production as Chemistry II John F. Padgett, Peter McMahan, and Xing Zhong 70 * Chapter 4 From Chemical to Social Networks John F. Padgett 92 Part II Early Capitalism and State Formation 115 * Chapter 5 The Emergence of Corporate Merchant-Banks in Dugento Tuscany John F. Padgett 121 * Chapter 6 Transposition and Refunctionality: The Birth of Partnership Systems in Renaissance Florence John F. Padgett 168 * Chapter 7 Country as Global Market: Netherlands, Calvinism, and the Joint-Stock Company John F. Padgett 208 * Chapter 8 Conflict Displacement and Dual Inclusion in the Construction of Germany Jonathan Obert and John F. Padgett 235 Part III Communist Transitions 267 * Chapter 9 The Politics of Communist Economic Reform: Soviet Union and China John F. Padgett 271 * Chapter 10 Deviations from Design: The Emergence of New Financial Markets and Organizations in Yeltsin's Russia Andrew Spicer 316 * Chapter 11 The Emergence of the Russian Mobile Telecom Market: Local Technical Leadership and Global Investors in a Shadow of the State Valery Yakubovich and Stanislav Shekshnia 334 * Chapter 12 Social Sequence Analysis: Ownership Networks, Political Ties, and Foreign Investment in Hungary David Stark and Balazs Vedres 347 Part IV Contemporary Capitalism and Science 375 * Chapter 13 Chance, Necessite, et Naivete: Ingredients to Create a New Organizational Form Walter W. Powell and Kurt Sandholtz 379 * Chapter 14 Organizational and Institutional Genesis: The Emergence of High-Tech Clusters in the Life Sciences Walter W. Powell, Kelley Packalen, and Kjersten Whittington 434 * Chapter 15 An Open Elite: Arbiters, Catalysts, or Gatekeepers in the Dynamics of Industry Evolution? Walter W. Powell and Jason Owen-Smith 466 * Chapter 16 Academic Laboratories and the Reproduction of Proprietary Science: Modeling Organizational Rules through Autocatalytic Networks Jeannette A. Colyvas and Spiro Maroulis 496 * Chapter 17 Why the Valley Went First: Aggregation and Emergence in Regional Inventor Networks Lee Fleming, Lyra Colfer, Alexandra Marin, and Jonathan McPhie 520 * Chapter 18 Managing the Boundaries of an "Open" Project Fabrizio Ferraro and Siobhan O'Mahony 545 * Coda: Reflections on the Study of Multiple Networks Walter W. Powell and John F. Padgett 566 Index of Authors 571 Index of Subjects 573

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The Emergence of Organizations and Markets

We draw on diverse data sets to compare the institutional organization of upstream life science research across the United States and Europe. Understanding cross-national differences in the organization of innovative labor in the life sciences requires attention to the structure and evolution of biomedical networks involving public research organizations (universities, government laboratories, nonprofit research institutes, and research hospitals), science-based biotechnology firms, and multinational pharmaceutical corporations. We use network visualization methods and correspondence analyses to demonstrate that innovative research in biomedicine has its origins in regional clusters in the United States and in European nations. But the scientific and organizational composition of these regions varies in consequential ways. In the United States, public research organizations and small firms conduct R&D across multiple therapeutic areas and stages of the development process. Ties within and across these regions link small firms and diverse public institutions, contributing to the development of a robust national network. In contrast, the European story is one of regional specialization with a less diverse group of public research organizations working in a smaller number of therapeutic areas. European institutes develop local connections to small firms working on similar scientific problems, while cross-national linkages of European regional clusters typically involve large pharmaceutical corporations. We show that the roles of large and small firms differ in the United States and Europe, arguing that the greater heterogeneity of the U.S. system is based on much closer integration of basic science and clinical development.

A Comparison of U.S. and European University-Industry Relations in the Life Sciences

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Industrial districts and regional clusters depend on the networks that arise from reciprocal linkages among co-located organizations, while physical proximity among firms can alter the nature of information and resource flows through networks. We consider the joint effects of geographic propinquity and network position on organizational innovation using negative binomial count models of patenting activity for U.S.-based life science firms in industrial districts and regional clusters across a 12-year time period, 1988–1999. We find evidence that regional agglomeration and network centrality exert complementary, but contingent, influences on organizational innovation. Results show that in the high-velocity, research-intensive field of biotechnology, geographic and network positions have both independent and contingent effects on organizational innovation. The influence of centrality in local, physically co-located partner networks depends on the extent to which firms are also embedded in a global network c...

Walter W. Powell

Papers

Networks, Propinquity, and Innovation in Knowledge-Intensive Industries

The Emergence of Organizations and Markets

A Comparison of U.S. and European University-Industry Relations in the Life Sciences

A Comparison of U.S. and European University-Industry Relations in the Life Sciences

Networks, Propinquity, and Innovation in Knowledge-intensive Industries