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440804 - Articles Summary Interorganizational Relationships
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440804 - Articles Summary Interorganizational Relationships, Master Organization Studies, Tilburg University,
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Summary IORKilduff & Brass – Organizational Social Network Research
Four interrelated leading ideas
1. Relations between actors
Researchers emphasize that social network analysis involves the study of a set of actors
and the relations (such as friendship, communication, advice) that connect or separate
them
2. Embeddedness = extent to which economic transactions occur within the context of social
relationships
Embeddedness is more important to the extent that markets are inefficient or when
“economic exchange would be otherwise difficult”, but even in relatively perfect markets
people rely on social connections to make important decisions across a range of options.
Thus embeddedness involves the overlap between social ties and economic ties both within
and between organizations. “Embedded” ties were characterized by higher levels of trust,
richer transfers of information and greater problemsolving capabilities.
3. Structural patterning
Structure is often defined in terms of groups of non-interacting actors. Overall system
indicators of structure such as clustering, connectivity, and centralization. Density =
referring to the actual number of ties in the network divided by the maximum number of
ties that are possible (indicator of cohesion). Tie strength is a function of time, intimacy,
emotional intensity, and reciprocity.
4. Utility of Social Network Connections
The belief that social networks provide the opportunities and constraints that affect
outcomes of importance to individuals and groups. The theory posits that actors with closed
networks (in which ego’s trusted contacts are said to be “redundant” with each other) are
disadvantaged in terms of information and control benefits relative to actors whose
networks are “rich in structural holes”. BUT; norms, trust, and reciprocity result from
network closure within communities. Redundancy = the extent to which two contacts
“provide the same information benefits to the player”. A primary structural-hole
opportunity is offered to you when two of your acquaintances are themselves not
acquainted, secondary structural-hole opportunity is offered to you when, in considering
your relationship with A, you notice that B offers similar access to the network of ties you
are interested in, and that, therefore, you could substitute B for A.
Criticism and controversies
1. Actor Characteristics The focus on structural patterns to the exclusion of actor
attributes helped social network research establish a distinctive niche for itself. People who
are constrained within relatively closed networks develop different personalities from those
who experience relatively open networks (structuralist view). High self-monitors strive to
orient their attitudes and behaviors to the expectations of specific audiences in social
situations, whereas low selfmonitors strive to orient their attitudes and behaviors to inner
affective states. Thus self-monitoring helps explain why some individuals tend to occupy
structural holes. Thus the structuralist focus on relations to the exclusion of actor
characteristics strikes network-trained strategy researchers as unsatisfactory.
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, 2. Agency fails to take into account human agency. The network surrounding the
individual is taken to indicate simultaneously “entrepreneurial opportunity and motivation”
(so disadvantageous placed actors not have skills).
3. Cognition Sociological research has tended to neglect the subjective meanings inherent
in networks in favor of an emphasis on supposedly “concrete” relations such as exchanges
between actors.
Just as actor characteristics may reflect capability, and agency may reflect motivation, cognition
may assess awareness of network opportunities and constraints
4. Cooperation vs competition Cooperation and competition are likely to continue as
resilient themes in network research concerning individuals, teams, and organizations. But
explicit consideration of competitive and cooperative culture may be necessary to
understand fully the relative advantages of various network structures.
5. Boundary specification whether we are to take into account only ego’s embeddedness
within the network of those to whom ego is tied directly, or whether we should also include
the contacts of ego’s contacts. The question is one of boundary specification—deciding on
how many links to include in extending the network beyond ego’s direct ties.
Raab – Interorganizational Networks
Networks are consciously created and have common goals. Participants have a mutual awareness
or even a common identity as network members.
Informal relation: Organizations connected by personnel flows or personal communication
without a formal relation
Interorganizational relation: Dyadic link between two organizations in the form of exchange of
information and knowledge, tangible and intangible resources, board interlocks, alliances, joint
venture, consortia, etc.
Network boundary: Indicates who or what is part of the network and what is defined as being
outside the network. Represents first step in every network analysis.
Serendipitous or emergent networks: Networks that emerge as an aggregate out of dyadic or
triadic interactions and relationships between actors. Network boundaries are often ambiguous and
are determined by the researcher.
Interorganizational networks whenever three or more organizations interact are an
aggregate of formal an informal relations between organizations as independent entities and the
formal and informal relations between their members. Emergent (first instance not necessarily
common goal), engineered do have common goal, consciously created.
Networks of organizations also seen as form of governance, e.g. way to coordinate human
interaction. Juxtaposed to markets and hierarchies (buy or make). Network is about ‘join’.
Interorganizational networks matter at three levels:
1. Individual organizations their networks influence their power position within a sector,
influence the access to new knowledge and determine opportunities and constraints
2. Networks themselves how they are structured and governed influences to a great extent
what outcomes they produce and in case of engineered networks to what extent they are
able to achieve their goals
3. Wider community/society the way they are structured and governed determines the
positive or negative effects these networks might have, for example, in terms of innovative
spillovers or policy making
Interorganizational networks are most of the time analyzed as “pipes,” i.e., organizations are
connected by relationships that facilitate the flow of tangible and intangible resources, very often
tacit or explicit knowledge and information. Assumptions:
1. material and immaterial resources flow through organizations, despite the fact that two
different subunits within the organization which connects two other organizations are
involved in the interaction
2. organizational actors have at least partially an accurate assessment of the indirect ties of
their direct partners, so they can at least heuristically predict the centrality and in fluence
position of the key actors in the network.
Controversy (Burt vs. Coleman) what is most advantageous tie or network structure? Is it a
brokerage position (structural hole, Burt), where partners of an organization are not linked to each
other and an organization can therefore play out its partners against each other or is it a position,
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,in which the partners are all connected to each other (closure, Coleman) and therefore trust and
common norms can develop?
Answer of Burt a position is most advantageous, if it is embedded in a densely connected
cluster and that cluster is then in a brokerage position between other clusters
Provan & Kenis - Modes of Network Governance: Structure, Management, and
Effectiveness
Network functioning = process by which certain network conditions lead to various network-level
outcomes
Our focus is on networks as groups of three or more legally autonomous organizations that work
together collectively and collaboratively to try to achieve not only their own goals, but also, the
collective goal of the network as a whole
For problems that require collective action, organizational governance is also no longer sufficient –
network governance is required to achieve broad, network-level goals. Although network
governance may not be a legal issue, as with organizational governance, we argue that it is critical
for effectiveness.
We view ‘network’ as a variable, examining different network governance configurations and the
conditions for the effectiveness of each form.
Forms of network governance – categorized along two different dimensions
1. network governance may or may not be brokered shared governance (highly
decentralized, no brokering at all) OR moderately centralized with some brokerage
activities through individual or small groups of members
2. Whether the network is participant governed or externally governed participant
governed networks are, at one extreme, governed either collectively by the members
themselves (i.e., shared), or at the other extreme, by a single network participant that
takes on the role of a lead organization. Externally governed networks are governed by a
unique network administrative organization
Participant governed simplest and most common form of network governance, are governed
by the network members themselves with no separate and unique governance entity (formally or
informally). Participant governed networks can be highly decentralized, involving most or all
network members interacting on a relatively equal basis in the process of governance. This is what
we refer to as shared participant governance. At the other extreme, the network may be highly
centralized, governed by and through a single lead organization that is a network member.
Network administrative organization (third form) basic idea is that a separate
administrative entity is set up specifically to manage the network and its activities. While network
members still interact with one another, as with the lead organization model, the NAO model is
centralized. The network broker (in this case, the NAO) plays a key role in coordinating and
sustaining the network. Government run NAOs are generally set up when the network first forms,
to stimulate its growth through targeted funding and/or network facilitation, and to ensure that
network goals are met.
Adoption of network governance forms network managers can and do choose forms for
reasons like mimicry, past experience, and personal preference. However, we argue that choices
based on these sorts of factors alone are not consistent with the structural characteristics of the
governance form itself, and thus, if adopted, will have only a limited chance of being successful.
We propose that the successful adoption of a particular form of governance will be
based on four key structural and relational contingencies: trust, size (number of participants),
goal consensus, and the nature of the task; specifically, the need for network-level
competencies
as trust becomes less dense, as the number of participants gets larger, as network goal
consensus declines, and as the need for network-level competencies increases, brokered forms of
network governance, like lead organization and NAO, are likely to become more effective than
shared governance networks
Trust = the willingness to accept vulnerability based on positive expectations about another’s
intentions or behaviours. Shared governance is most likely to be an effective form when trust is
pervasive throughout the network. When low density trust is prevalent, network governance is
likely to be brokered, either through a lead organization or through a NAO.
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, Number of network participants more participants, government more complex. Shared self
governance is best suited to small networks of organizations. When problems arise in such
networks, full and active face-to-face participation by partners is possible. As the number of
organizations in the network gets larger, however, shared governance becomes highly inefficient,
with participants either ignoring critical network issues or spending large amounts of time trying to
coordinate across ten, twenty, or more organizations. By centralizing governance, participants no
longer must interact directly with each other, but rather, they can interact directly with the lead
organization or NAO for purposes of coordinating network-level needs (SO NO SELF-ORGANIZING)
Network goal consensus in the goal directed networks discussed here, not only organizational
goals, but also, network-level goals guide organizational action. When there is general consensus
on broad network-level goals, both regarding goal content and process, and in the absence of
hierarchy, network participants are more likely to be involved and committed to the network and
more likely to work together. Self-governed forms are most likely to be effective when participants
can generally agree on network-level goals. In this situation, participating organizations can work
together without significant conflict, each making their own contribution to broad network goals
while concurrently attaining their own goals. Lead agency forms will be likely when network
participants have moderately low goal consensus while NAO forms are likely when goal consensus
among involved organizations is in the moderately high range.
Need for network level competencies Organizations form networks for a variety of reasons,
including the need to gain legitimacy, enhance performance, acquire better information, attain
more resources. A critical question thus becomes, what network forms are best suited to achieving
network-level goals for individual network members? (nature of task and external needs and
demands being faced). Shared governance will be less likely to be an effective form of governance
when interdependent task requirements are high, since demands will be placed on individual
network members for skills they may not possess, like grant writing, quality monitoring, or even
conflict resolution. Conversely, it is precisely these task conditions that favor lead organization or
NAO models, which are more able to develop specialty skills related to network-level needs. For
instance, pressures from an external funder to coordinate activities or to be highly responsive to its
demands and regulations would require centralized action of the sort that would be extremely
difficult to accomplish through shared governance, since the response would have to be diffused. A
NAO, however, would provide a single focal point for interactions with the funder, in a way
that could also enhance the legitimacy of the network as a whole.
Propositions:
1. The greater the inconsistency between critical contingency factors and
a particular governance form, the less likely that that particular form will be effective,
leading either to overall network ineffectiveness, dissolution, or change in governance
form.
2. Shared network governance will be most effective for achieving network-level outcomes
when trust is widely shared among network participants, when there are relatively few
network participants, when network-level goal consensus is high, and when the need for
network-level competencies is low.
3. Lead organization network governance will be most effective for achieving network-level
outcomes when trust is narrowly shared among network participants, when there are a
relatively moderate number of network participants, when network-level goal consensus is
moderately low, and when the need for network-level competencies is moderate.
4. Network administrative organization network governance will be most effective for
achieving network-level outcomes when trust is moderately to widely shared among
network participants, when there are a relatively moderate number to many network
participants, when network-level goal consensus is moderately high, and when the need for
network-level competencies is high.
Governance and network tensions three tensions that need to be managed
1. Efficiency versus inclusiveness efficiency is measure of outputs over inputs (more
efficient, trade of may be reduction of commitment), inclusiveness is member involvement
through inclusive decision making (more time-consuming). Shared most inclusive, leader
most efficient, NAO allows for structured and representative participation for key strategic
issues, while having a staff assume more routine administrative burdens
2. Internal versus external legitimacy If participants do not see interactions and
coordinated efforts as being a legitimate way of conducting business, with potential
benefits from these interactions, then the network is likely to exist in name only with little
real commitment by participants to network-level goals and outcomes. The value of
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