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Organizational Identity and Interorganizational Alliances

01 Jan 2012-

AbstractThis dissertation examines the relationship between organizational identity and the formation and performance implications of interorganizational alliances. The first study investigates the effect of an organization's identity on its initial alliance portfolio formation, addressing how becoming comprehensible through organizational identity is a fundamental step in order for a new organization to be accepted by the market. Through different categorizations, some new organizations will be more comprehensible and possess clearer identities in the market than others. I develop a theory of how this variation affects the search for alliance partners in terms of the speed of alliance formation and the diversity between the new organization and its partners. The second study investigates how organizational identity affects the impact of alliances on performance outcomes. Alliances that explore and experiment tend to affect organizational outcomes negatively, at least in the short term. Although exploration strategies facilitate learning and adaptation in the long run, they incur costs due to the nature of experimentation. I advance an alternative perspective that organizational identity plays a role in this alliance-performance link. Depending on the strength of an organization's identity in terms of how coherent and taken-for-granted its categorization or social grouping is, the effect on performance may be more or less negative. Overall, this research indicates that organizational identity matters both to an organization's initial alliance portfolio formation and to the impact of this alliance portfolio on performance outcomes. This work contributes to the literature streams of both organizational identity and alliances, and presents the first systematic investigation of the link between them.

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Abstract: This study examines the influence of the structure and composition of a firm's alliance network on its exploratory innovation. In a longitudinal investigation of 77 telecommunications equipment manufacturers, I find the technological diversity of a firm's alliance partners increases its exploratory innovation. I also find that network density among a firm's alliance partners strengthens the influence of diversity. These results suggest the benefits of network closure and access to diverse information can coexist in a firm's alliance network and the combination of the two increases exploratory innovation.

54 citations


Posted Content
Abstract: The engagement of firms in multiple simultaneous strategic alliances with different partners has become a ubiquitous phenomenon in today's business landscape This article offers a review of the extant alliance portfolio literature and organizes it around three key research areas: (a) the emergence of alliance portfolios, (b) the configuration of alliance portfolios, and (c) the management of alliance portfolios The article also highlights existing gaps in the present understanding of alliance portfolios and outlines a research agenda by identifying key research questions and issues in the areas where further research is needed

36 citations


References
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Journal ArticleDOI
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. **

29,672 citations


"Organizational Identity and Interor..." refers background in this paper

  • ...Implicit in these goals is the organization’s intention to incorporate new knowledge and routines, which differ from those it already possesses, from external sources (Cohen and Levinthal, 1990; Levitt and March, 1988); routines are the organizational properties, such as forms, strategies and technologies, “around which organizations are constructed and through which they operate”...

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  • ...The strategy to compete on cost and time lead firms to favor alliance partners with whom they share similar knowledge and technology backgrounds, as they can communicate and exchange information with these partners efficiently (Cohen and Levinthal, 1990; Mowery et al., 1996; Stuart, 1998)....

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Journal ArticleDOI
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.

24,320 citations


"Organizational Identity and Interor..." refers background in this paper

  • ...Such a link between structure and action is related to the broader sociological insight that social structures constrain organizational behavior and shape economic opportunities (Burt, 1992; Granovetter, 1985; Podolny, 1993; White, 1981)....

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Posted Content
Abstract: This study develops an evolutionary theory of the capabilities and behavior of business firms operating in a market environment. It includes both general discussion and the manipulation of specific simulation models consistent with that theory. The analysis outlines the differences between an evolutionary theory of organizational and industrial change and a neoclassical microeconomic theory. The antecedents to the former are studies by economists like Schumpeter (1934) and Alchian (1950). It is contrasted with the orthodox theory in the following aspects: while the evolutionary theory views firms as motivated by profit, their actions are not assumed to be profit maximizing, as in orthodox theory; the evolutionary theory stresses the tendency of most profitable firms to drive other firms out of business, but, in contrast to orthodox theory, does not concentrate on the state of industry equilibrium; and evolutionary theory is related to behavioral theory: it views firms, at any given time, as having certain capabilities and decision rules, as well as engaging in various ‘search' operations, which determines their behavior; while orthodox theory views firm behavior as relying on the use of the usual calculus maximization techniques. The theory is then made operational by the use of simulation methods. These models use Markov processes and analyze selection equilibrium, responses to changing factor prices, economic growth with endogenous technical change, Schumpeterian competition, and Schumpeterian tradeoff between static Pareto-efficiency and innovation. The study's discussion of search behavior complicates the evolutionary theory. With search, the decision making process in a firm relies as much on past experience as on innovative alternatives to past behavior. This view combines Darwinian and Lamarkian views on evolution; firms are seen as both passive with regard to their environment, and actively seeking alternatives that affect their environment. The simulation techniques used to model Schumpeterian competition reveal that there are usually winners and losers in industries, and that the high productivity and profitability of winners confer advantages that make further success more likely, while decline breeds further decline. This process creates a tendency for concentration to develop even in an industry initially composed of many equal-sized firms. However, the experiments conducted reveal that the growth of concentration is not inevitable; for example, it tends to be smaller when firms focus their searches on imitating rather than innovating. At the same time, industries with rapid technological change tend to grow more concentrated than those with slower progress. The abstract model of Schumpeterian competition presented in the study also allows to see more clearly the public policy issues concerning the relationship between technical progress and market structure. The analysis addresses the pervasive question of whether industry concentration, with its associated monopoly profits and reduced social welfare, is a necessary cost if societies are to obtain the benefits of technological innovation. (AT)

22,526 citations


Journal ArticleDOI
Abstract: Many formal organizational structures arise as reflections of rationalized institutional rules. The elaboration of such rules in modern states and societies accounts in part for the expansion and i...

21,423 citations


"Organizational Identity and Interor..." refers background in this paper

  • ...It is further helpful to relate cognitive legitimacy to how well or how effortlessly an audience comprehends the firm based on the firm’s fit with the audience’s conception of social reality and an established way of life (Meyer and Rowan, 1977; Suchman, 1995)....

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Journal ArticleDOI
Abstract: This paper considers the relation between the exploration of new possibilities and the exploitation of old certainties in organizational learning. It examines some complications in allocating resources between the two, particularly those introduced by the distribution of costs and benefits across time and space, and the effects of ecological interaction. Two general situations involving the development and use of knowledge in organizations are modeled. The first is the case of mutual learning between members of an organization and an organizational code. The second is the case of learning and competitive advantage in competition for primacy. The paper develops an argument that adaptive processes, by refining exploitation more rapidly than exploration, are likely to become effective in the short run but self-destructive in the long run. The possibility that certain common organizational practices ameliorate that tendency is assessed.

14,959 citations