Organizational Identity and Interorganizational Alliances
01 Jan 2012-
TL;DR: In this article, the authors examined the relationship between organizational identity and the formation and performance implications of interorganizational alliances and developed 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.
Abstract: This 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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Posted Content•
TL;DR: In this paper, the influence of the structure and composition of a firm's alliance network on its exploratory innovation was examined, and the benefits of network closure and access to diverse information can coexist in a firms' alliance network.
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•
TL;DR: A review of the existing literature on alliance portfolio literature can be found in this paper, where three key research areas are identified: (a) the emergence of alliance portfolios, (b) the configuration of alliance portfolio, and (c) the management of portfolio.
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
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References
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TL;DR: In this paper, a case study of the disk array market and its associated technologies finds that if firms in the market derive their primary identities from other activities (implying that there are few highly focused firms deriving their primary identity from disk arrays), then the disk arrays producer identity cannot cohere into a code or form.
Abstract: This article asks a basic question of organizational evolution: When and where will a new organizational form emerge? Using a definition of organizational forms as external identity codes, we focus on two answers drawn from contemporary organization theory. The first holds that formal institutions such as industry associations and standard-setting bodies will result in a taken-for-granted organizational form. The second answer contends that increasing organizational density (number of organizations) will generate a legitimated organizational form. As reported here, a historical case study of the disk array market and its associated technologies finds both arguments limited. Although significant collective activity in association building and standard setting occurs among disk array producers, these have not yet led to an organizational form. Similarly, an observed trajectory of organizational density showing rapid growth followed by stabilization has not yet generated an organizational form. In our view, the diversity of origins and other activities of those organizations operating in this market work against institutionalization of the disk array organizational form. We reason that if firms in the market derive their primary identities from other activities (implying that there are few highly focused firms deriving their primary identity from disk arrays), then the disk array producer identity cannot cohere into a code or form. This conclusion suggests a respecification of the legitimation component of the density-dependent model of organizational evolution.
148 citations
TL;DR: In this paper, the impact of transactions costs associated with patent "thickets" on new entrants' interactions with the capital markets was studied, showing that start-up software companies operating in markets characterized by denser patent thickets saw their initial acquisition of VC funding delayed relative to firms in markets less affected by patents after the mid 1990s.
Abstract: Legal changes in the patentability of software since the mid 1990s have resulted in a substantial increase in the number of patents on software inventions. We focus here on the impact of transactions costs associated with patent “thickets” on new entrants' interactions with the capital markets. Using data on the financing of entrants into 27 narrowly defined software markets, we show that start-up software companies operating in markets characterized by denser patent thickets saw their initial acquisition of VC funding delayed relative to firms in markets less affected by patents after the mid 1990s. The relationship between patent thickets and subsequent financing activity such as IPO or acquisition is more complex, but there is weak evidence that firms without patents became less likely to go public if they operated in a market characterized by patent thickets. Firms with patents are more likely to be funded or experience a liquidity event. However, the application for a patent appears to matter more than its grant.
146 citations
TL;DR: In this article, the authors combine insights from organizational ecology and social network theory to examine how the structure of relations among organizational populations affects differences in rates of foundings across geographic locales, and hypothesize that symbiotic and commensalistic interpopulation relations function as channels of information about entrepreneurial opportunities.
Abstract: Combining insights from organizational ecology and social network theory, we examine how the structure of relations among organizational populations affects differences in rates of foundings across geographic locales. We hypothesize that symbiotic and commensalistic interpopulation relations function as channels of information about entrepreneurial opportunities and that differing access to such information influences the founding rate. Empirical analyses of U.S. instruments manufacturers support this argument. The founding rate of instruments manufacturers rises with the densities of organizational populations that have symbiotic and commensalistic relationships with instruments manufacturers. These factors encourage the initial foundings of instruments manufacturers in areas where such organizations were not previously found. The dominance of organizational populations tied to instruments manufacturing by symbiotic or commensalistic relations increases the rate of foundings of instruments manufacturers,...
146 citations
TL;DR: Hannan et al. as mentioned in this paper examined how the life chances and financial performance of nascent high-technology firms were affected by two kinds of organizational changes: altering founders' blueprints for the employment relation and replacing a founder-chief executive officer (CEO) by an outsider.
Abstract: Industrial and Corporate Change, Volume 15, Number 5, pp. 755–784 doi:10.1093/icc/dtl020 Advance Access published August 8, 2006 Organizational identities and the hazard of change Michael T. Hannan, James N. Baron, Greta Hsu and Ozgecan Kocak We examine how the life chances and financial performance of nascent high- technology firms were affected by two kinds of organizational changes: altering founders’ blueprints for the employment relation and replacing a founder–chief executive officer (CEO) by an outsider. We argue that both events destabilize organizations but that changes in employment blueprints are tied more tightly to the organization’s identity and thus are more destabilizing. We analyze three dimensions of organizational performance among a sample of young high- technology companies in California’s Silicon Valley: survival versus failure, launching an initial public offering (IPO), and changes in financial valuations among organi- zations that underwent an IPO. As predicted, changing the employment blueprint increased the hazard of failure and diminished growth in market value. Appoint- ing an outsider as CEO did not affect the hazard of failure appreciably but did depress the rate of growth in market capitalization. The implications of these results for ecological and institutional perspectives on organizations are discussed. 1. Imprinting, identity, and disruptive change The proposition advanced by Hannan and Freeman (1984) that altering an organiza- tion’s core features is hazardous has been the focus of much theorizing and empirical research (Barnett and Carroll, 1995; Carroll and Hannan, 2000). This research has generally emphasized one side of the inertia story: the disruption entailed in reorgan- izing routines and architectures. The other side of the story—that changes in core fea- tures might be viewed as violations of deep-seated, taken-for-granted expectations by key organizational constituents—has received less attention. This article attempts to redress the balance by developing an identity-based notion of an organization’s core and testing the proposition that changing such core features is especially destabilizing. Notions of identity played an important part in shaping the original inertia argu- ment. For instance, Hannan and Freeman (1984: 155–156) motivated their argument with the example of the university: although some features, such as textbooks, con- stantly change in an adaptive way, changing a curriculum from liberal arts to voca- tional training would be extraordinarily difficult. “The curriculum is difficult to © The Author 2006. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved.
135 citations
"Organizational Identity and Interor..." refers background in this paper
...Furthermore, the more extensive an exploration alliance is, the more likely it is to signal an impending change that will affect the organization’s core, entailing a potential change in its identity (Hannan et al., 2006; Hannan and Freeman, 1984)....
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...In addition, organizational change will call into question the automatic, taken-forgranted identity expectations upon which members inside and relevant observers outside the organization have come to rely (Albert and Whetten, 1985; Hannan and Freeman, 1984; Hannan et al., 2006; Hsu and Hannan, 2005; Pólos, Hannan, and Carroll, 2002; Whetten, 2006)....
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Book•
05 Apr 2010TL;DR: In this article, the structural analysis of the network economy and the evolution of a corporate network are discussed. But, the authors focus on the next generation industrial architecture rather than the past.
Abstract: List of figures List of tables Acknowledgments Introduction 1. The structural analysis of the network economy 2. The origins of Japanese network structures 3. The evolution of a corporate network: a longitudinal network analysis of 259 large firms 4. Exchange and control: explaining corporate ties: a longitudinal dyad analysis 5. Intervention and redistribution: how keiretsu networks shape corporate performance 6. Japan's next generation industrial architecture Bibliography Index.
129 citations