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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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
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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
36 citations
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TL;DR: Abrahamson et al. as discussed by the authors proposed an evolutionary model of technological change in which a technological breakthrough, or discontinuity, initiates an era of intense technical variation and selection, culminating in a single dominant design.
Abstract: The authors thank Eric Abrahamson, Warren Boeker, Donald Hambrick, and three anonymous reviewers for their assistance. An evolutionary model of technological change is proposed in which a technological breakthrough, or discontinuity, initiates an era of intense technical variation and selection, culminating in a single dominant design. This era of ferment is followed by a period of incremental technical progress, which may be broken by a subsequent technological discontinuity. A longitudinal study of the cement (1888-1980), glass (1893-1980), and minicomputer (1958-1982) industries indicates that when patents are not a significant factor, a technological discontinuity is generally followed by a single standard. Across these diverse product classes, sales always peak after a dominant design emerges. Discontinuities never become dominant designs, and dominant designs lag behind the industry's technical frontier. Both the length of the era of ferment and the type of firm inaugurating a standard are contingent on how the discontinuity affects existing competences. Eras of ferment account for the majority of observed technical progress across these three industries.'
3,131 citations
"Organizational Identity and Interor..." refers background in this paper
...Such a surge in new firms, as well as their foment around the new technology, is a characteristic response to significant technological change in many industries (Anderson and Tushman, 1990)....
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...The practice of alliance formation has become ubiquitous, particularly in high technology industries where partners are necessary to cope with frequent innovation and recurring cycles of new market creation and old market obsolescence (Anderson and Tushman, 1990; Powell, 1990)....
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TL;DR: In this paper, the authors develop attractive functional forms and simple quasi-likelihood estimation methods for regression models with a fractional dependent variable, and apply these methods to a data set of employee participation rates in 401 (k) pension plans.
Abstract: SUMMARY We develop attractive functional forms and simple quasi-likelihood estimation methods for regression models with a fractional dependent variable. Compared with log-odds type procedures, there is no difficulty in recovering the regression function for the fractional variable, and there is no need to use ad hoc transformations to handle data at the extreme values of zero and one. We also offer some new, robust specification tests by nesting the logit or probit function in a more general functional form. We apply these methods to a data set of employee participation rates in 401 (k) pension plans. I. INTRODUCTION Fractional response variables arise naturally in many economic settings. The fraction of total weekly hours spent working, the proportion of income spent on charitable contributions, and participation rates in voluntary pension plans are just a few examples of economic variables bounded between zero and one. The bounded nature of such variables and the possibility of observing values at the boundaries raise interesting functional form and inference issues. In this paper we specify and analyse a class of functional forms with satisfying econometric properties. We also synthesize and expand on the generalized linear models (GLM) literature from statistics and the quasi-likelihood literature from econometrics to obtain robust methods for estimation and inference with fractional response variables. We apply the methods to estimate a model of employee participation rates in 401 (k) pension plans. The key explanatory variable of interest is the plan's 'match rate,' the rate at which a firm matches a dollar of employee contributions. The empirical work extends that of Papke (1995), who studied this problem using linear spline methods. Spline methods are fiexible, but they do not ensure that predicted values lie in the unit interval. To illustrate the methodological issues that arise with fractional dependent variables, suppose that a variable y, O^y^l, is to be explained by a 1 x/^ vector of explanatory variables \ = {Xi,X2 XK), with the convention that Xi = l. The population model
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TL;DR: In this paper, the authors show that the probability of a new alliance between specific organi-zations increases with their interdependence and also with their prior mutual alliances, common third parties, and joint centrality in the alliance network.
Abstract: Organizations enter alliances with each other to access critical re‐sources, but they rely on information from the network of prior alli‐ances to determine with whom to cooperate. These new alliances modify the existing network, prompting an endogenous dynamic be‐tween organizational action and network structure that drives the emergence of interorganizational networks. Testing these ideas on alliances formed in three industries over nine years, this research shows that the probability of a new alliance between specific organi‐zations increases with their interdependence and also with their prior mutual alliances, common third parties, and joint centrality in the alliance network. The differentiation of the emerging network structure, however, mitigates the effect of interdependence and en‐hances the effect of joint centrality on new alliance formation.
2,864 citations
TL;DR: In this paper, the authors focus on one set of constraints facing entrepreneurs in emerging industries -their relative lack of cognitive and sociopolitical legitimacy, suggesting how their successful pursuit of legitimacy may evolve from innovative ventures to broader contexts, collectively reshaping industry and institutional environments.
Abstract: Now organizations are always vulnerable to the liabilities of newness, but such pressures are especially severe when an industry is in its formative years. We focus on one set of constraints facing entrepreneurs in emerging industries-their relative lack of cognitive and sociopolitical legitimacy. We examine the strategies that founders can pursue, suggesting how their successful pursuit of legitimacy may evolve from innovative ventures to broader contexts, collectively reshaping industry and institutional environments.
2,852 citations
TL;DR: This paper investigated the diffusion and institutionalization of change in formal organization structure, using data on the adoption of civil service reform by cities and found that when civil service procedures are required by the state, they diffuse rapidly and directly from the state to each city.
Abstract: The authors are jointly responsible forthe theoretical argumentand analysis. M. Craig Brown suggested the topic of civil service reform. Maureen J. McConaghy, Nancy Brandon Tuma, Glenn R. Carroll, and P. Y Liu provided methodological advice, Sharon Stevens aided early computational work. Both of us are grateful to Phillip Bonacich for his advice throughout the research, and to Marshall W. Meyer, John W. Meyer, William G. Roy, Herman Turk, Richard A. Berk, David McFarland, Oscar Grusky, and Jeffrey Pfeffer fortheir helpful comments on an eariner draft. This paper investigates the diffusion and institutionalization of change in formal organization structure, using data on the adoption of civil service reform by cities. It is shown thatwhen civil service procedures are required bythe state, they diffuse rapidly and directly from the state to each city. When the procedures are not so legitimated, they diffuse gradually and the underlying sources of adoption change overtime. In the lattercase, early adoption of civil service by cities is related to internal organizational requirements, with city characteristics predicting adoption, while late adoption is related to institutional definitions of legitimate structural form, so that city characteristics no longer predict the adoption decision. Overall, the findings provide strong support for the argument that the adoption of a policy or program by an organization is importantly determined by the extent to which the measure is institutionalizedwhether by law or by gradual legitimation.
2,833 citations