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Summary of All Papers for the Oral Exam
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Summary containing the 6 key papers and the other mandatory papers for the course.
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Key Paper 1: Burt (1992): Structural Holes: the social structure of competition, Cambridge, HarvardUniversity Press. Chapter 1
Cell 3: conditions of the network and what you can gain from the network.
Burt explains a perspective on the advantages of occupying a brokerage position within social
networks, contrasting with Coleman’s (1988) perspective on closure positions. Burt describes 3 forms
of capital (human, financial, social) and argues that social capital is derived from an actor’s location in
a structure of relationships, specifically in a broker triad. There are 2 indicators of a structural hole:
cohesion and structural equivalence (same position within a network structure). Size and diversity
are the main derivatives of a network. A larger network often has more information benefits, as long
as the diversity also increases, otherwise it may cripple the network. Social capital is jointly owned by
parties in a relationship and arises from advantageous network positions. Social capital is not derived
from the number of ties you have in the network, but from how you position yourself in a network
and how you make use of the network. The benefits to a network according to Burt are information
benefits and concern access, timing and referrals. Het critiques the focus on weak ties, asserting
that structural holes which create gaps in networks, are the real sources of information and control
benefits. The notion of Tertius Gaudens where a person benefits from establishing relationships
between others, is discussed along with entrepreneurial opportunities and the role of secondary
holes. A player with a network rich in information benefits has contacts in places where useful
information is likely to air and provides a reliable flow of information to and from those places.
Secondary holes are structural holes among the secondary contacts within the cluster around each
primary contact that play a role in the tertius strategy. Burt underscores the importance of structural
holes in providing information and control benefits within social networks, emphasizing their role in
shaping entrepreneurial behavior and enhancing structural autonomy.
Key Paper 2: Granovetter, M. S. (1973). "The Strength of Weak Ties." American Journal of Sociology
78(6)
Cell 2, 3, 8, 9: What consequences do dyadic and network ties have on single organizations and the
network. Context: job searches Individuals are more likely to hear about job opportunities through
weak ties rather than through strong ties within their social circle.
The research of Granovetter highlights the paradoxical nature of weak ties. He reveals that weak ties
play a crucial role in providing information about better job opportunities with more than 75% of
individuals finding new jobs through personal contacts. The strength of ties is conceptualized based
on time, emotional intensity, intimacy, and reciprocal services, suggesting that stronger ties involve
larger time commitments and greater similarity between connected individuals. Granovetter states
that weak ties serve as bridges between different social sectors, facilitating spread of information
and ideas. Weak ties are more importance in egocentric networks where they can provide mobility
opportunities and contribute to social cohesion. He found that communities with many weak ties
are more cohesive and effective in collective action. The paper underscores the need for linking
micro and macro levels in sociological theory. He comes with the following hypothesis: As the tie
between A and B strengthens, the percentage of individuals in the network to whom they are
jointly connected through a weak or strong tie increases. As a tie strengthens between A and B they
are likely to share more aspects of their social networks. Weak ties connect different social groups
and provide access to new information. This means that when a tie strengthens, the merging of
their social network may expose them to a broader range of resources through both strong and
weak ties. Granovetter also comes with the concept of a forbidden triad in which A-B and A-C are a
strong connection and B-C does not exist in theory. However, in practice we see that the B-C relation
is always present. DHL Model (Davis, Holland and Leinhardt): Interpersonal choices tend to be
transitive. If A chooses B and B chooses C, then A is also more likely to choose C.
,Key Paper 3: Powell, W. W., Kogut, K., & Smith-Doerr, L. 1996. Inter-Organizational Collaboration and
the Locus of Innovation: Networks of Learning in Biotechnology
Cell 3: locus of innovation in networks on the learning of an organization.
The paper concerns the fact that organizations that network actively learn more than organizations
who don’t. Locus of innovation concerns the idea that internal capability and external collaboration
are not exclusive but need to be performed at the same time in order for innovation to emerge. Locus
of innovation is found in a network of interorganizational relationships.
Locus of innovation: The focal point in an organization where new ideas and innovation are
generated.
R&D intensity: The level of investment that an organization dedicates to R&D activities relative to its
financial status.
Powell investigates the role of interorganizational networks in innovation within rapidly evolving
industries where knowledge is a crucial asset. No single firm possesses all the internal capabilities
required for success due to the broad distribution of research breakthroughs. He argues that
innovation is concentrated in networks of learning rather than individual firms. He introduces a
network approach, asserting that R&D alliances, experience in managing interfirm relationship,
network position, growth rates, and collaborative portfolios can explain innovation patterns. His
research emphasizes the complementary nature of internal capability and external collaboration,
challenging the notion that collaborations only compensate for internal deficiencies. Hypotheses:
Hypothesis 1: The more R&D alliances a firm has and the more experience it has in managing
collaborations, the greater the likelihood that it will pursue non-R&D collaborations in the future.
This, in turn, is expected to result in a more diverse portfolio of ties. They now want collaborations in
fields like marketing, distribution, or other markets to outsource their R&D specialties.
Hypothesis 2: The more R&D alliances a firm has, the more diverse its ties are, and the more
experience it has in managing collaborations, the more centrally connected the firm will become in
the network. This is while controlling for the total number of ties and prior connectedness.
Actively participating in collaborations can make firms central players.
Hypothesis 3: The greater a firm’s centrality in a network and its experience in managing ties, the
more rapid its growth will be in the future, while controlling for prior growth. Centrality causes
access to resources, information, and collaboration opportunities.
Hypothesis 4: The greater a firm’s centrality in a network, the more likely it is to engage in
subsequent R&D collaborations, even when controlling for prior collaborative R&D activity. Firms
with high centrality are often more attractive partners for collaboration (resource and information
access).
The results highlight the strategic significance of interorganizational relationships, revealing their
role in organizational development, competence accumulation, and sustained collaboration in the
face of industry growth and changing dynamics. They argue that in industries in which knowledge is
developing rapidly it is actually the R&D intensity or level of technological sophistication of industries
that explains the intensity and the number of alliances in those sectors. This paper has two key
observations:
1. IORs are not simply a means to compensate for the lack of skills
2. Nor should IORs be viewed as a series of discrete transactions.
, Key paper 4: Powell, W. W. (1990), Neither Market nor Hierarchy: Network Forms of Organization.
Research in Organizational Behavior 12:295-336
Cell 8: how networks emerge from a dyad perspective. The need for another form of governance was
clear because of the need for transfer of knowledge, resources, information sharing and collaboration
between organizations.
The main points revolve around challenging the traditional dichotomy between market and
hierarchy as forms of organization. Powell introduces the concept of networks as a third form to
provide a more comprehensive understanding of economic coordination. Until the 1990s,
organizational theories predominantly focused on the market-hierarchy continuum where firms
either operated in market perspectives or adopted hierarchical structures. Powell argues that
collaborative forms of contracting and relational exchanges do not neatly fit into this dichotomous
view. Networks represent a unique form of economic coordination characterized by reciprocal,
preferential, and mutually supportive actions. This inclusion of networks broadens the understanding
of economic arrangements, emphasizing the significance of relationships, social embedding, and
cultural factors in economic actions. Powell also discusses the conditions under which network forms
emerge. Powell (1990) suggests that networks can be a primary mode of organization, especially in
contexts where flexibility, innovation, and collaboration are key. You have the continuum between
market and hierarchy and you have different forms in between. But the network is not a hybrid as
explained by Williamson (1975/1985), but a separate third form due to different methods of conflict
resolution.
Market weaknesses: as exchanges become more frequent and complex, the costs of conducting and
monitoring them increase, giving rise to the need for other methods of structuring exchange.
Hierarchy weaknesses: When hierarchical forms are confronted by sharp fluctuations in demand and
unanticipated changes, their liabilities are exposed. Powell provides examples of sectors where
network forms exist. For example in Craft industries, strategic alliances and industrial networks. Craft
work tends to be project-based, while in bureaucratic organizations a product moves through a series
of functional departments where different activities are performed. In craft work each product is
relatively unique, search procedures are non-routine, and work process depends to a considerable
degree on intuition and experimentation. There are more specialized roles where different people
contribute their different skills to the production process.
Key paper 5: Provan, K. G. and H. B. Milward (1995): A preliminary Theory of
Interorganizational Network Effectiveness: A Comparative Study of Four
Community Mental Health Systems
Cell 9: impact of network governance or structure on network effectiveness
Key points
This paper on network effectiveness explores the degree of goal achievement in whole networks,
particularly in community-based health care and social services. To determine what appropriate
norms are for whether a network has achieved its goal, they state 3 instruments:
1. Mode of inception: How the network was initiated: imposed, invited, self-initiated, and
hybrid. Self-initiated has more commitment compared to imposed.
2. Time of Existence: reflects the network’s stability and capacity to adapt over time. Mature
networks may have established more routines, trust, and collaboration.
3. Connection to activity of organization: degree to which the activities are integrated into the
participating organizations of the network. Strong connection indicates and effectively
integrated network.
Provan & Milward (1995) stated 4 hypotheses:
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