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Relations and networks of
organisations
2020-2021
Individual written exam (60%)
What is the structure of the written exam?
• Part A (50%): 40 multiple choice questions
o Cognitive questions “what is…?” (e.g., definitions, list of factors)
o Questions relating to network analysis and measures (e.g., SNA concepts, basic
interpretation of sociograms). Example: “What is closeness centrality?”, “Based on the
figure below, which actors occupy a brokerage position?”
o Questions about your understanding of the course content (e.g., identify hypotheses from
specific papers and the arguments or grue/false statements). Example: “Based on Ahuja
(2000), closure can be beneficial for firm’s innovation because of…”
• Part B (50%): 2 open-ended questions. Each question has 3-4 short sub-questions.
o Sub question a: provide a definition
o Sub-question b & c: justify or specify
o Sub question d: provide your opinion/explain
What topics can we expect?
• In short, all topics covered in this course.
• All papers on the RANO syllabus (the syllabus is available from canvas). Do not learn the papers by
heart but do know the definitions and main (theoretical) arguments. Pay special attention to
o Main theoretical IOR/ION-related arguments
o Key findings and discussion
o NOTE: the lecture slides capture the main points from each paper
• Also the Scott / Wasserman & Faust chapters: but you should study only the network measures
discussed in class and in the computer lab
Written group assignments (30%)
• Assignment I: 27.05.2021 by 08h45 at the latest.
• Assignment II: 01.06.2021by 16h00 at the latest
Internet Exam (10%):
• This test has 20 multiple-choice questions.
• The internet exam covers 10% of your final grade.
• Possibility for a bonus point on the internet exam if you pass the individual writing assignment
(“Connected: The Power of Six Degrees”).
1.2 Baker, W. (2000): “What is social capital and why should you care about it?” .................................... 5
What is social capital? (learning goal: explaining the concept) .............................................................. 5
Social capital and IORs and IONs ............................................................................................................. 6
The myth of individualism ....................................................................................................................... 6
Conclusion ............................................................................................................................................... 7
Lecture 2.......................................................................................................................................................... 8
2.1 Introduction........................................................................................................................................... 8
2.2 Organization & environment; a manager’s perspective ....................................................................... 8
Closed vs open systems ........................................................................................................................... 8
Input and output ..................................................................................................................................... 9
2.3 Social networks: a researcher’s perspective ......................................................................................... 9
The interorganizational problem ............................................................................................................ 9
IORs as ways of reducing environmental uncertainty........................................................................... 10
Resource dependence theory ............................................................................................................... 11
Organizations, institutions and networks ............................................................................................. 11
2.4 Studying social networks ..................................................................................................................... 11
What is a network? ............................................................................................................................... 11
Structural holes and social action ......................................................................................................... 13
What flows through ties? ...................................................................................................................... 13
2.5 Levels of analysis in social networks ................................................................................................... 14
Environment: Interorganizational networks ......................................................................................... 14
Multi-level ............................................................................................................................................. 14
2.6 Take-away message ............................................................................................................................ 15
Lecture 3........................................................................................................................................................ 16
3.1 Background on the study of social networks (see also Wasserman and Faust) ................................. 16
3.2 Basics of the network analysis ............................................................................................................ 16
3.2.1 Social network definition ............................................................................................................. 16
3.2.2 Levels of analysis .......................................................................................................................... 16
3.2.3 Relational data or attributional data? .......................................................................................... 19
3.3 Types of data representation/data entry ............................................................................................ 19
, 3.3.1 The organisation of relational data (Scott 2000, p 1-10) ............................................................. 20
3.3.2 The organisation of relational data (lecture) ............................................................................... 22
3.3.3 The organisation of relational data (exercises from lecture) ....................................................... 24
3.3.3 Points, lines and density (Scott 2000) .......................................................................................... 25
3.4 Basic concepts ..................................................................................................................................... 26
3.5 Types of relational data ....................................................................................................................... 27
3.6 Basic measures (lecture 4) .................................................................................................................. 29
Lecture 4........................................................................................................................................................ 30
4.1 Prominence and position of nodes: centrality and prestige ............................................................... 30
4.1.1 Centrality (non-directional relations) ........................................................................................... 30
4.1.2 Prestige (status)............................................................................................................................ 34
4.2 Social roles and positions: structural equivalence and regular equivalence ...................................... 35
Structural equivalence .......................................................................................................................... 36
Regular equivalence .............................................................................................................................. 36
4.3 Centralization and density................................................................................................................... 36
4.4 Cohesive subgroups ............................................................................................................................ 39
4.5 Exercises about cohesive subgroups ................................................................................................... 44
4.6 Mock exam questions ......................................................................................................................... 45
Lecture 5........................................................................................................................................................ 47
5.1. Learning goals..................................................................................................................................... 47
5.2 Oliver (1990): “Determinants of inter-organizational relationships”.................................................. 47
5.2.1. The six determinants (critical contingencies) .............................................................................. 47
5.2.2. Interaction among contingencies ................................................................................................ 51
5.2.3. Six types of relations ................................................................................................................... 51
5.2.4. Conclusions.................................................................................................................................... 0
5.3 Practice questions ................................................................................................................................. 0
Lecture 6.......................................................................................................................................................... 2
6.1 Introduction........................................................................................................................................... 2
6.2 Perspectives on the formation of IORs/networks ................................................................................. 2
6.3 Oerlemans & Knoben: “Configurations of knowledge transfer relations: An empirically based
taxonomy and its determinants” ................................................................................................................ 4
Part 1: Taxonomy of IOR configurations ................................................................................................ 5
Part 2: Introducing multiple predictors (determinants) that explain why firms choose one
configuration over another ..................................................................................................................... 7
1
, Conclusion ............................................................................................................................................. 13
6.4 Mock exam questions ......................................................................................................................... 14
Lecture 7........................................................................................................................................................ 16
7.1 Introduction......................................................................................................................................... 16
7.2 Ahuja (2000): “Collaboration networks, structural holes and innovation”......................................... 16
Network structure and innovation output ............................................................................................ 17
Hypothesis 1: Direct ties........................................................................................................................ 18
Hypothesis 2: Indirect ties ..................................................................................................................... 18
Hypothesis 3: Direct and indirect ties ................................................................................................... 19
Hypothesis 4: Structural holes .............................................................................................................. 19
Conceptual model ................................................................................................................................. 20
Results ................................................................................................................................................... 21
Discussion .............................................................................................................................................. 22
Practical implications: Dutch chemicals industry .................................................................................. 24
What is the context of Ahuja (2000)? ................................................................................................... 25
Ahuja (2000): a critique ......................................................................................................................... 25
7.3 Take-away message ............................................................................................................................ 26
Lecture 8........................................................................................................................................................ 27
8.1 Introduction......................................................................................................................................... 27
8.2 Oliveira & Lumineau (2017): “How coordination trajectories influence performance in
interorganizational project networks.” ..................................................................................................... 27
Relations & networks of organizations in projects ............................................................................... 27
Prior literature ....................................................................................................................................... 28
Framework of the research ................................................................................................................... 28
Towards a process model ...................................................................................................................... 29
Contributions......................................................................................................................................... 31
Managerial implications ........................................................................................................................ 32
Boundary conditions & transferability of findings ................................................................................ 32
Concluding remarks............................................................................................................................... 32
8.3 Practice questions ............................................................................................................................... 34
Preliminary model of network effectiveness ........................................................................................ 47
Conclusions............................................................................................................................................ 51
Limitations ............................................................................................................................................. 51
11.3 To what extend do the results of Provan & Milward (1995) hold in other contexts of goal directed
networks? .................................................................................................................................................. 51
11.4 Where do we go from here? ............................................................................................................. 52
Network management .......................................................................................................................... 52
11.5 Critical note on this research field .................................................................................................... 53
11.6 Mock exam questions ....................................................................................................................... 54
Lecture 12...................................................................................................................................................... 56
12.1 Introduction....................................................................................................................................... 56
11.2 Gulati & Singh (1998): “The architecture of cooperation: alliances & government structure” ........ 56
Task interdependence and hierarchical control.................................................................................... 57
Hypothesis 1: (Anticipated) interdependence ...................................................................................... 58
,Lecture 13...................................................................................................................................................... 69
13.1 Introduction....................................................................................................................................... 69
13.2 Introduction to cross-sectoral partnerships ...................................................................................... 69
13.3 Trust-based organizing in cross-sectoral partnerships...................................................................... 70
13.4 Cross-sectoral partnerships in the light of RANO .............................................................................. 71
13.5 Reflection .......................................................................................................................................... 72
4
, LECTURE 1
Introduction: Definitions, types, and characteristics of relationships between organizations and networks of
organizations
1.1 Introduction
Article: Baker, W. (2000) “What is Social Capital and Why Should You Care About It?”, Chapter 1 in: W. E.
Baker (2000) Achieving Success Through Social Capital.
1.2 Baker, W. (2000): “What is social capital and why should you care about it?”
--> First learning goal of this course: Describe and explain the concept of social capital and apply the theoretical
ideas to empirical settings.
What is social capital? (learning goal: explaining the concept)
Social capital: Social capital refers to the resources available in and through relationships and networks
(i.e., relational view of organizations). These resources include information, ideas, leads, business
opportunities, financial capital, power and influence, emotional support, even goodwill, trust and
cooperation. Social capital consists of two words that both add their own meaning to the definition.
• Social: The “social” in social capital emphasizes that these resources are not personal assets; not
a single person owns them, but they reside in networks of relationships. If you think of human
capital as what you know (the sum of your own knowledge, skills and experience), then access to
social capital depends on who you know (size, quality, and diversity of your personal and business
networks).
• Capital: The “capital” in social capital emphasizes that it is productive/worth something; it
enables us to create value, get things done, achieve our goals, etc. Social capital can provide you
for example with: information, business opportunities, financial resources, power, emotional
support, trust, cooperation, and so on.
Social capital is not a feature of an entity (attribute variable), but it is a feature of a relationship
(relational variable). Relational variables often have an equal/higher explanatory power than attribute
variables.
5
,Social capital and IORs and IONs
Interorganizational networks are “relatively enduring transactions, flows, and linkages that occur among
and between an organization and one or more organizations in its environment”. (Oliver 1990: 241)
Relationships and networks of organizations are about the exchange and flow of resources between
organizations. For an individual organization, relations and networks mean access to and dependency on
resources (e.g., information, ideas, reputation, trust).
The notion of ‘social capital’ captures the resources available through relationships and networks, i.e.,
relational view of organizations.
The myth of individualism
There seems to be a powerful myth of individualism: the cultural beliefs that everyone succeeds or fails
on the basis of individual efforts and abilities. The paper of Baker (2000) suggests that success depends
on our relationships with others as much as it does on ourselves.
Personal talent
Even natural talent, intelligence, education, effort, and luck are not individual attributes at all: they are
developed, shaped, and expressed by and through relationships with others. How?
• Talent: Physical and mental talents depend on genes, but these inherited abilities explain only
part of a person’s performance; the environment is as important (if not more so). Natural talent
is expressed and developed via relationships with others.
• Intelligence: This is partially genetically determined but also developed and strengthened by
relations. Intelligence can be shaped and increased through various interventions. The home
environment, availability and quality of schooling, and other factors play major roles.
• Education: We learn language through observation of and interaction with others. We read and
write because others (parents, relatives, teachers, tutors, friends) thought us how.
• Dedication: Clearly, there are natural vairations in physical and mental energy. But the fields of
organizational behavior and psychology demonstrate conclusively that the amount of effort
expended varies tremendously with the social context (are you in a supportive setting?). A person
is more likely to work harder in a high-productivity workplace than in a low-productivity
workplace.
• Chance: Studies show that lucky people increase their chances of being in the right place at the
right time by building a “spiderweb structure” of relationships that catches lots of different bits
and pieces of information.
Business success
There is also hard evidence that social capital boosts business performance. Individuals who build and use
social capital get better jobs, better pay, faster promotions, and are more influential and effective,
compared with peers who are unable or unwilling to tap the power of social capital.
Organizations with rich social capital enjoy access to venture capital and financing, improved
organizational learning, the power of word-of-mouth marketing, the ability to create strategic alliances,
and the resources to defend against hostile takeovers. How?
• Payment and career development. People who are strongly embedded tend to earn higher
salaries and experience faster career development
6
, • Raising financial capital. Informal financial capital market.
• Learning in organizations. Through informal relations and learning.
• Marketing. Through verbal advertising, importance of social network for diffusion of new
products.
• Strategic alliances. This enables you to learn from another organisation or enhance your
reputation.
Happy and satisfying life
The case beyond the business case links networks with the quality of life. A network of good relationships
leads to happiness, satisfaction, and a meaningful life. How?
• Happiness. Relational theories of psychology argue that a primary motivation in life is
participation, meaning growth and development in connection with others.
• Health. People with good networks enjoy better mental and physical health.
• Life expectancy. Networkers live longer, which appears to be caused by both behavioural and
biological changes. The tendency to make more social contacts improves health practices (stop
smoking, reduce alcohol consumption).
Conclusion
Society consists of a set of independent individuals, each of whom acts to achieve goals that are
independently arrived at, and that the functioning of the social system consists of the combination of
these actions of independent individuals.
Baker (2000) concludes that social capital is an essential part of achieving personal success, business
success, and even a happy and satisfying life.
7
, LECTURE 2
Definitions, types, and characteristics of relationships between organizations and networks of organizations
2.1 Introduction
Article: Stern, R. N., Mitsuhashi, H. M., & Oliver, C. (2001) “An introductory Essay: Research on Inter-
organizational Relations (IORs)”. Unpublished manuscript
Where are we in the RANO course?
Learning goals:
• Identify and distinguish open vs closed views about the organizational environment (why do IORs
and IONs exist? A manager’s perspective)
• Discuss key findings from classic studies in the field of social networks (why do IORs and IONs
exist? A researcher’s perspective)
• Specify the core definition of a social network (how to study IORs and IONs?)
• Assess different levels of analysis in IORs and IONs?
2.2 Organization & environment; a manager’s perspective
“Why do IORs and IONs exist? (management perspective)”
Closed vs open systems
You can think of the organisation as an island, where the organisation operates without any kind of
connections with the environment, and although some of the theories appear to suggest that view, you
know that in reality organisations are somehow connected. Although some organisations are more
connected than others.
Organisations are connected, and because these connections matter for the outcomes you want to
know something about networks.
8
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