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Network Forms of Organization
TL;DR: In this paper, the authors review work that has laid a foundation for this broader focus and suggest analytical concerns that should guide this literature as it moves forward, as sociologists move away from critiquing what are now somewhat outdated economic views, they need to balance the exclusive focus on prevalence and functionality with attention to constraint and dysfunctionality.
Abstract: Initial sociological interest in network forms was motivated in part by a critique of economic views of organization. Sociologists sought to highlight the prevalence and functionality of organizational forms that could not be classified as markets or hierarchies. As a result of this work, we now know that network forms of organization foster learning, represent a mechanism for the attainment of status or legitimacy, provide a variety of economic benefits, facilitate the management of resource dependencies, and provide considerable autonomy for employees. However, as sociologists move away from critiquing what are now somewhat outdated economic views, they need to balance the exclusive focus on prevalence and functionality with attention to constraint and dysfunctionality. The authors review work that has laid a foundation for this broader focus and suggest analytical concerns that should guide this literature as it moves forward.
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TL;DR: A growing number of sociologists, political scientists, economists, and organizational theorists have invoked the concept of social capital in the search for answers to a broadening range of questions being confronted in their own fields as mentioned in this paper.
Abstract: A growing number of sociologists, political scientists, economists, and organizational theorists have invoked the concept of social capital in the search for answers to a broadening range of questions being confronted in their own fields. Seeking to clarify the concept and help assess its utility for organizational theory, we synthesize the theoretical research undertaken in these various disciplines and develop a common conceptual framework that identifies the sources, benefits, risks, and contingencies of social capital.
8,518Â citations
Cites background from "Network Forms of Organization"
...The "narrow" camp, exemplified by Portes (1998), argues that the abilities at the network nodes are complements to social capital....
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...In a similar vein, Portes (1998) notes that social capital in tight-knit communities may create free-riding problems and hinder entrepreneurship....
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TL;DR: This paper reviewed and analyzed the emerging network paradigm in organizational research and developed a set of dimensions along which network studies vary, including direction of causality, levels of analysis, explanatory goals, and explanatory mechanisms.
2,845Â citations
TL;DR: The central argument of network research is that actors are embedded in networks of interconnected social relationships that offer opportunities for and constraints on behavior as discussed by the authors, and the authors of this paper review the antecedents and consequences of networks at the interpersonal, interunit, and interorganizational levels of analysis, evaluate recent theoretical and empirical trends, and give directions for future research.
Abstract: The central argument of network research is that actors are embedded in networks of interconnected social relationships that offer opportunities for and constraints on behavior. We review research on the antecedents and consequences of networks at the interpersonal, interunit, and interorganizational levels of analysis, evaluate recent theoretical and empirical trends, and give directions for future research, highlighting the importance of investigating cross-level network phenomena.
1,994Â citations
TL;DR: In this article, the authors combine Simon's conception of relational contracts with Grossman and Hart's focus on asset ownership to analyze whether transactions should occur under vertical integration or non-integration, and with or without self-enforcing relational contracts.
Abstract: We combine Simon's conception of relational contracts with Grossman and Hart's focus on asset ownership. We analyze whether transactions should occur under vertical integration or non-integration, and with or without self-enforcing relational contracts. These four models allow us to re-run the horse race Coase proposed between markets and firms as alternative governance structures, but with four horses rather than two. We find that efficient ownership patterns are determined in part by the relational contracts that ownership facilitates, that vertical integration is an efficient response to widely varying supply prices, and that high-powered incentives create bigger reneging temptations under integration than under non-integration. Note: this paper was formerly titled "Implicit Contracts and the Theory of the Firm"
1,431Â citations
Book•
05 Jun 2013
TL;DR: The knowledge and tools exist to put the health system on the right course to achieve continuous improvement and better quality care at a lower cost, and a better use of data is a critical element of a continuously improving health system.
Abstract: America's health care system has become too complex and costly to continue business as usual. Best Care at Lower Cost explains that inefficiencies, an overwhelming amount of data, and other economic and quality barriers hinder progress in improving health and threaten the nation's economic stability and global competitiveness. According to this report, the knowledge and tools exist to put the health system on the right course to achieve continuous improvement and better quality care at a lower cost.The costs of the system's current inefficiency underscore the urgent need for a systemwide transformation. About 30 percent of health spending in 2009--roughly $750 billion--was wasted on unnecessary services, excessive administrative costs, fraud, and other problems. Moreover, inefficiencies cause needless suffering. By one estimate, roughly 75,000 deaths might have been averted in 2005 if every state had delivered care at the quality level of the best performing state. This report states that the way health care providers currently train, practice, and learn new information cannot keep pace with the flood of research discoveries and technological advances.About 75 million Americans have more than one chronic condition, requiring coordination among multiple specialists and therapies, which can increase the potential for miscommunication, misdiagnosis, potentially conflicting interventions, and dangerous drug interactions. Best Care at Lower Cost emphasizes that a better use of data is a critical element of a continuously improving health system, such as mobile technologies and electronic health records that offer significant potential to capture and share health data better. In order for this to occur, the National Coordinator for Health Information Technology, IT developers, and standard-setting organizations should ensure that these systems are robust and interoperable. Clinicians and care organizations should fully adopt these technologies, and patients should be encouraged to use tools, such as personal health information portals, to actively engage in their care.This book is a call to action that will guide health care providers; administrators; caregivers; policy makers; health professionals; federal, state, and local government agencies; private and public health organizations; and educational institutions.
1,324Â citations
Cites background from "Network Forms of Organization"
...Another successful communication strategy is the creation of learning or improvement networks (Podolny and Page, 1998)....
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References
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TL;DR: In this paper, the authors argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities.
Abstract: In this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. We label this capability a firm's absorptive capacity and suggest that it is largely a function of the firm's level of prior related knowledge. The discussion focuses first on the cognitive basis for an individual's absorptive capacity including, in particular, prior related knowledge and diversity of background. We then characterize the factors that influence absorptive capacity at the organizational level, how an organization's absorptive capacity differs from that of its individual members, and the role of diversity of expertise within an organization. We argue that the development of absorptive capacity, and, in turn, innovative performance are history- or path-dependent and argue how lack of investment in an area of expertise early on may foreclose the future development of a technical capability in that area. We formulate a model of firm investment in research and development (R&D), in which R&D contributes to a firm's absorptive capacity, and test predictions relating a firm's investment in R&D to the knowledge underlying technical change within an industry. Discussion focuses on the implications of absorptive capacity for the analysis of other related innovative activities, including basic research, the adoption and diffusion of innovations, and decisions to participate in cooperative R&D ventures. **
31,623Â citations
TL;DR: In this article, the extent to which economic action is embedded in structures of social relations, in modern industrial society, is examined, and it is argued that reformist economists who attempt to bring social structure back in do so in the "oversocialized" way criticized by Dennis Wrong.
Abstract: How behavior and institutions are affected by social relations is one of the classic questions of social theory. This paper concerns the extent to which economic action is embedded in structures of social relations, in modern industrial society. Although the usual neoclasical accounts provide an "undersocialized" or atomized-actor explanation of such action, reformist economists who attempt to bring social structure back in do so in the "oversocialized" way criticized by Dennis Wrong. Under-and oversocialized accounts are paradoxically similar in their neglect of ongoing structures of social relations, and a sophisticated account of economic action must consider its embeddedness in such structures. The argument in illustrated by a critique of Oliver Williamson's "markets and hierarchies" research program.
25,601Â citations
TL;DR: In this article, the authors develop one of perhaps multiple specifications of embeddedness, a concept that has been used to refer broadly to the contingent nature of economic action with respect to cognition, social structure, institutions, and culture.
Abstract: This chapter aims to develop one of perhaps multiple specifications of embeddedness, a concept that has been used to refer broadly to the contingent nature of economic action with respect to cognition, social structure, institutions, and culture. Research on embeddedness is an exciting area in sociology and economics because it advances understanding of how social structure affects economic life. The chapter addresses propositions about the operation and outcomes of interfirm networks that are guided implicitly by ceteris paribus assumptions. While economies of time due to embeddedness have obvious benefits for the individual firm, they also have important implications for allocative efficiency and the determination of prices. Under the conditions, social processes that increase integration combine with resource dependency problems to increase the vulnerability of networked organizations. The level of investment in an economy promotes positive changes in productivity, standards of living, mobility, and wealth generation.
9,137Â citations
TL;DR: Powell et al. as mentioned in this paper developed a network approach to organizational learning and derive firm-level, longitudinal hypotheses that link research and development alliances, experience with managing interfirm relationships, network position, rates of growth, and portfolios of collaborative activities.
Abstract: This research was supported by grants provided to the first author by the Social and Behavioral Sciences Research Institute, University of Arizona, and the Aspen Institute Nonprofit Sector Research Fund and by grants to the second author by the College of Business and Public Administration, University of Arizona. We have benefited from productive exchanges with numerous audiences to whom portions of this paper have been presented: a session at the 1994 Academy of Management meetings, the Social Organization workshop at the University of Arizona, the Work, Organizations, and Markets workshop at the Harvard Sociology Department, the 1994 SCOR Winter Conference at Stanford University, and colloquia at the business schools at the University of Alberta, UC-Berkeley, Duke, and Emory, and the JFK School at Harvard. For detailed comments on an earlier draft, we are extremely grateful to Victoria Alexander, Ashish Arora, Maryellen Kelley, Peter Marsden, Charles Kadushin, Dick Nelson, Christine Oliver, Lori Rosenkopf, Michael Sobel, Bill Starbuck, Art Stinchcombe, and anonymous reviewers at ASQ. We thank Dina Okamoto for research assistance and Linda Pike for editorial guidance. Address correspondence to Walter W. Powell, Department of Sociology, University of Arizona, Tucson, AZ 85721. We argue in this paper that when the knowledge base of an industry is both complex and expanding and the sources of expertise are widely dispersed, the locus of innovation will be found in networks of learning, rather than in individual firms. The large-scale reliance on interorganizational collaborations in the biotechnology industry reflects a fundamental and pervasive concern with access to knowledge. We develop a network approach to organizational learning and derive firm-level, longitudinal hypotheses that link research and development alliances, experience with managing interfirm relationships, network position, rates of growth, and portfolios of collaborative activities. We test these hypotheses on a sample of dedicated biotechnology firms in the years 1990-1994. Results from pooled, within-firm, time series analyses support a learning view and have broad implications for future theoretical and empirical research on organizational networks and strategic alliances.*
8,249Â citations
TL;DR: In this paper, the authors assume that firms invest in R&D not only to generate innovations, but also to learn from competitors and extraindustry knowledge sources (e.g., university and government labs).
Abstract: The authors assume that firms invest in R&D not only to generate innovations, but also to learn from competitors and extraindustry knowledge sources (e.g., university and government labs). This argument suggests that the ease of learning within an industry will both affect R&D spending, and condition the influence of appropriability and technological opportunity conditions on R&D. For example, they show that, contrary to the traditional result, intraindustry spillovers may encourage equilibrium industry R&D investment. Regression results confirm that the impact of appropriability and technological opportunity conditions on R&D is influenced by the ease and character of learning. Copyright 1989 by Royal Economic Society.
7,980Â citations