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What explains differences in firms’ abilities to acquire competitive capabilities? In this paper we propose that a firm’s embeddedness in a network of ties is an important source of variation in the acquisition of competitive capabilities. We argue that firms in geographical clusters that maintain networks rich in bridging ties and sustain ties to regional institutions are well-positioned to access new information, ideas, and opportunities. Hypotheses based on these ideas were tested on a stratified random sample of 227 job shop manufacturers located in the Midwest United States. Data were gathered using a mailed questionnaire. Results from structural equation modeling broadly support the embeddedness hypotheses and suggest a number of insights about the link between firms’ networks and the acquisition of competitive capabilities. Copyright © 1999 John Wiley & Sons, Ltd.

A critical specification lacking from much theory and research on organizations is that of time scale. Specification of the relevant time scale is as critical as the specification of the appropriate level or unit of analysis, a concept to which it is related. We define and explore five types of time scales and consider their implications for both the social constructionist and positivist approaches. Using examples from strategy and organizational theory, we show how the choice of time scale has important implications for the development of theory.

This paper introduces the concepts of alertness and responsiveness as key capabilities for firms in fast-moving, information-intensive environments such as global currency trading. Hypotheses drawn from the resource-based view of the firm, from network theory, and from Austrian economics are tested on objective cross-section and time-series data for the population of 4,088 banks engaged in foreign-exchange trading on the Reuters dealing system. Results strongly support the hypotheses that banks that are alert, i.e., use their information networks in ways that expand the range of information they are exposed to, and responsive—those that act quickly in volatile markets—tend to exercise greater market influence in this industry.

We examine how similarity in capabilities and geography shape the structure of competition in the global currency-trading industry. Employing QAP network regression techniques on the industry's top...

We examine the existence of country effects on information seeking in response to market volatility, and explore the institutional factors underlying these effects. The empirical setting is the use of an electronic inter-bank network over twelve months by 3,266 banks located in twenty-five countries. We find significant differences across countries in banks' information-seeking behavior in response to market volatility, influenced both by differences in national industry arrangements and by national culture. However, national industry arrangements and national culture influence banks' information seeking in distinct ways.© 1997 JIBS. Journal of International Business Studies (1997) 28, 77–100

The Handbook of Advances in Trust Research presents new and important developments in trust research. The contributors are all prominent and highly respected experts in the field. Firstly, they provide a contemporary overview of the most crucial issues in current trust research including contracts, innovation and negotiation, trust and control. Thereafter, themes which have gained prominence since the original Handbook are considered, such as trust and the financial crisis, public trust in business, and trust and HRM. The book also explores recent theoretical advances and points the way for future research on trust.

This paper empirically examines the effects of alertness, responsiveness and information richness on performance in a hypercompetitive environment. Hypotheses drawn from strategy and economic socio...

We develop a model of relational governance as a specific form of interorganizational strategy that is distinct from the traditional modes of markets and hierarchies. We conceptualize this form of strategy in terms of structural and processual dimensions and derive a model of its determinants through arguments drawn from transaction cost economics and the sociological exchange literature. Hierarchical regression modeling is employed to test the theoretical model on data collected from a sample of 329 independent insurance agencies. We include the relational variable of trust and demonstrate that the combined model explains relational governance better than a model with the traditional determinants of governance form alone. Further, we observe that governance structure and process are related and discuss implications of the dynamic link between them. Directions for extensions are developed for strategic management research and practice.

An extensive body of knowledge exists on network outcomes and on how network structures may contribute to the creation of outcomes at different levels of analysis, but less attention has been paid to understanding how and why organizational networks emerge, evolve, and change. Improved understanding of network dynamics is important for several reasons, perhaps the most critical being that the understanding of network outcomes is only partial without an appreciation of the genesis of the network structures that resulted in such outcomes. To provide a context for the papers in this special issue, and with the broader goal of furthering network dynamics research, we present a framework that begins by discussing the meaning and role of network dynamics and goes on to identify the drivers and key dimensions of network change as well as the role of time in this process. We conclude with theoretical and methodological issues that researchers need to address in this domain.

We take a network perspective to organizational architecture, conceptualizing it as multiple networks of both formal and informal interactions and argue that their interplay is key to better understanding individual organizational member performance. We develop and test the concept of network consistency as the overlap between the informal network of advice and information with formal structures and processes, expressed as networks. We theorize that consistency between formal and informal networks exerts differing effects on performance. We test our theory in a financial services firm, using secondary data to create formal networks and annual performance evaluations for our dependent variable, along with primary survey data from organizational members to obtain the informal advice and information network. Results support our network approach to organizational architecture. Copyright © 2012 John Wiley & Sons, Ltd.

Electronic integration—a form of vertical quasi-integration achieved through the deployment of dedicated computers and communication systems between relevant actors in the adjacent stages of the value-chain—is an important concept to researchers in the information systems field since it focuses on the role of information technology in restructuring vertical relationships. Drawing on theoretical and empirical research on transaction costs, we develop and test a model of the determinants of the degree of electronic integration in the commercial segment of the property and casualty (P&C) industry. Based on a sample of 120 independent agencies operating under dedicated information technology-mediated conditions, we provide empirical support for three hypotheses on the determinants of electronic integration. Implications and research extensions are identified to guide further research in this important area.

This article takes issue with the notion that calculativeness and not trust dominates inter-organizational relationships (IORs), and lays out a series of arguments in support of trust. While it principally addresses the role of trust in inter-organizational business relationships, much of what is covered here applies as well to relationships between organizations more generally, including those in the public and non-profit sectors. This article shows that trust is different from calculativeness in nature and that the concept of social embeddedness provides a more realistic perspective for analysing relationships between organizations. It is believed that a detailed examination of the role of trust in IORs from both the economic and sociological perspectives paves the way to a deeper understanding of the issues in this context. In turn, such understandings should help identify appropriate research questions to investigate better empirically the precise role of trust in IORs.

We develop and test a theory of the origins of network structures, specifically of structural holes, building and testing a theoretical framework proposing that network structures emerge from the interplay of two complementary forces: structural constraints and network opportunities. We analyze data on a co-membership network among 501 production teams in the Italian TV production industry tracked over a period of 12 years, explicitly accounting for endogeneity. We find that structural holes spanned by teams originate from the prior status and centrality of teams that members were part of in the past, in addition to structural holes spanned in the past. But a focal team spans fewer structural holes if its members were part of cohesive teams earlier and if the past teams they were connected to produced similar artistic content. We also demonstrate that spanning structural holes is associated with superior team performance in terms of greater viewership. The results support both opportunity exploitation and structural constraint explanations, although we find that homogeneity rather than diversity influences performance across structural holes.

Organizational networks are generally considered major antecedents of mutual influence in adopting similar practices, typically via a structure of dense ties, or closure. We propose that under conditions of competitive interdependence, closure may be associated with links established to access resources and knowledge and become a possible source of differentiation rather than imitation. We test these and other antecedents of imitative behavior and performance in the Italian TV industry with 12 years of data on 501 productions. We find that network closure is associated with lower imitation, centrality, but not status, leads to imitation, and that imitation lowers performance.

Contents: Introduction Reinhard Bachmann and Akbar Zaheer PART I: MICRO OR INDIVIDUAL LEVEL 1. Three Fundamental Questions Regarding Trust in Leaders Kurt T. Dirks 2. Reflections on an Initial Trust-Building Model D. Harrison McKnight and Norman L. Chervany 3. Can Groups be Trusted? An Experimental Study of Trust in Collective Entities Bill McEvily, Roberto A. Weber, Cristina Bicchieri and Violet T. Ho 4. Trust as Situated Cognition: An Ecological Perspective on Trust Decisions Roderick M. Kramer PART II: ORGANIZATIONAL OR INTER-ORGANIZATIONAL LEVEL 5. Trust in the Balance: How Managers Integrate Trust-Building and Task Control Chris P. Long and Sim B. Sitkin 6. Opportunism, Trust and Knowledge: The Management of Firm Value and the Value of Firm Management Anoop Madhok 7. Trust, Transaction Cost Economics, and Mechanisms Philip Bromiley and Jared Harris 8. Relying on Trust in Cooperative Inter-Organizational Relationships Andrew H. Van de Ven and Peter Smith Ring 9. The Dark Side of Trust Martin Gargiulo and Gokhan Ertug 10. Trust, Codification and Epistemic Communities: Implementing an Expert System in the French Steel Industry Richard Arena, Nathalie Lazaric and Edward Lorenz 11. Trust Attitudes, Network Tightness and Organizational Survival: An Integrative Framework and Simulation Model Arjen van Witteloostuijn and Marc van Wegberg 12. Learning About Contracts: Trust, Cooperation and Contract Law Simon Deakin PART III: CROSS-LEVEL APPROACHES 13. On the Complexity of Organizational Trust: A Multi-Level Co-Evolutionary Perspective and Guidelines for Future Research Steven C. Currall and Andrew C. Inkpen 14. Forms, Sources and Processes of Trust Bart Nooteboom 15. Levels of Inter-Organizational Trust: Conceptualization and Measurement Martyna Janowicz and Niels Noorderhaven 16. Does Trust Still Matter? Research on the Role of Trust in Inter-Organizational Exchange Bill McEvily and Akbar Zaheer PART IV: TRUST AT THE LEVEL OF SOCIETY AND THE ECONOMY 17. An Ethical Analysis of the Trust Relationship Sanjay Banerjee, Norman E. Bowie and Carla Pavone 18. Trust and Markets Jens Beckert 19. The Economics of Trust Mark Casson and Marina Della Giusta 20. Trust, Institutions, Agency: Towards a Neoinstitutional Theory of Trust Guido Moellering 21. How Can Systems Trust Systems? A Structuration Perspective on Trust-Building in Inter-Organizational Relations Joerg Sydow 22. Trust and/or Power: Towards a Sociological Theory of Organizational Relationships Reinhard Bachmann Index

Investigating the efficacy of two alternative network structures, closure and structural holes, from the contingent perspective of time, we connect past and current social structures to outcomes. We show that, in the Italian television production industry, current structural holes rather than past ones, but past closure rather than current closure, help current network performance. Thus, structural holes and closure are both valuable, but at different points in time.

Although research on trust in an organizational context has advanced considerably in recent years, the literature has yet to produce a set of generalizable propositions that inform our understanding of the organization and coordination of work. We propose that conceptualizing trust as an organizing principle is a powerful way of integrating the diverse trust literature and distilling generalizable implications for how trust affects organizing. We develop the notion of trust as an organizing principle by specifying structuring and mobilizing as two sets of causal pathways through which trust influences several important properties of organizations. We further describe specific mechanisms within structuring and mobilizing that influence interaction patterns and organizational processes. The principal aim of the framework is to advance the literature by connecting the psychological and sociological micro-foundations of trust with the macro-bases of organizing. The paper concludes by demonstrating how the framework can be applied to yield novel insights into traditional views of organizations and to stimulate original and innovative avenues of organizational research that consider both the benefits and downsides of trust.

We present a view of trust in boundary spanners as explained by the extent of role autonomy, a multidimensional concept that reflects the discretion that agents have in interpreting and enacting their roles. We argue that, in a buyer-supplier context, purchasing managers will be trusted to a greater extent by supplier representatives when they are free from constraints that limit their ability to interpret their boundary-spanning roles. We conceptualize and measure three key components of role autonomy: Functional influence, tenure, and clan culture. Taken together, these components of role autonomy shape and define the purchasing manager's willingness and capacity to make and uphold commitments to supplier representatives. Role autonomy permits purchasing managers to engage in discretionary behaviors that allow supplier representatives to learn about their underlying motives and intentions. We test hypotheses linking the components of role autonomy to trust on a sample of 119 buyer-supplier relationships. We use a dyadic research design that combines data from purchasing managers and supplier representatives. The results suggest that granting purchasing managers greater autonomy enhances supplier representative trust in purchasing managers. By drawing attention to role autonomy as a feature of organizations that influences trust we highlight the importance of organizational context in contributing to a deeper understanding of trust.

Although prior research has suggested that business groups create value to member firms, less attention has been paid to the specific mechanisms through which business groups enhance performance of...

The use of network research in the fields of organization and strategy has exploded in recent times, with several special issues in top outlets such as Academy of Management Journal, Academy of Management Review, and Strategic Management Journal testifying to the popularity of the paradigm. However, a cursory look at the empirical and even the theoretical organizational network literature presents a rather unbalanced picture in terms of the focus of the current research. Specifically, though an extensive body of knowledge exists on how network structures may contribute to the creation of outcomes at different levels of analysis (individuals, groups, organizations, and populations of organizations), less attention has been paid in the literature to understanding how and why networks emerge, evolve, and change. A second and related issue with the organizational network literature is the strong likelihood that the current set of results in the literature that relate network structure to outcomes such as performance may be spurious, because they assume that network structural positions are exogenous. However, both the creation of and the positions that actors (whether individuals, groups, or firms) occupy in networks are likely to be endogenous to network outcomes. We elaborate on these issues below.

This research investigates the determinants and outcomes of trust in buyer-supplier relationships. Trust in a partner organization and in the individual counterpart are examined from both the buyers' and suppliers' perspectives. The method in which organizational and interorganizational management practices influence trust in buyer-supplier relations and how trust at two levels relates to supplier performance are discussed. Data for the statistical analysis was gathered from a survey of 99 purchasing managers and their lead suppliers.

A conceptual challenge in exploring the role of trust in interorganizational exchange is translating an inherently individual-level concept—trust—to the organizational-level outcome of performance. We define interpersonal and interorganizational trust as distinct constructs and draw on theories of interorganizational relations to derive a model of exchange performance. Specifically, we investigate the role of trust in interfirm exchange at two levels of analysis and assess its effects on negotiation costs, conflict, and ultimately performance. Propositions were tested with data from a sample of 107 buyer-supplier interfirm relationships in the electrical equipment manufacturing industry using a structural equation model. The results indicate that interpersonal and interorganizational trust are related but distinct constructs, and play different roles in affecting negotiation processes and exchange performance. Further, the hypotheses linking trust to performance receive some support, although the precise nature of the link is somewhat different than initially proposed. Overall, the results show that trust in interorganizational exchange relations clearly matters.

Although prior research offers many reasons why family influence helps firms achieve longer-term orientations, some recent studies argue that certain investments with long horizons, such as R&D or ...

When do alliances with large firms hurt small firms’ growth? We argue that partnerships with large firms have significant repercussions for small firms’ growth. By combining the capability perspect...

Extant research generally assumes that inter-firm alliances are favorable gateways to access and acquire capabilities from partners. We revisit this notion and show that external relationships are ...

While networks are one of the key manifestations of embeddedness, scholars have typically overlooked that networks themselves are embedded within a larger institutional context. We address this def...