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Social Capital, Strategic Relatedness and the Formation of Intraorganizational Linkages Wenpin Tsai Strategic Management Journal, Vol. 21, No. 9. (Sep., 2000), pp. 925-939. Stable URL: http://links.jstor.org/sici?sici=0143-2095%28200009%2921%3A9%3C925%3ASCSRAT%3E2.0.CO%3B2-A Strategic Management Journal is currently published by John Wiley & Sons. Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/about/terms.html. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/journals/jwiley.html. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. The JSTOR Archive is a trusted digital repository providing for long-term preservation and access to leading academic journals and scholarly literature from around the world. The Archive is supported by libraries, scholarly societies, publishers, and foundations. It is an initiative of JSTOR, a not-for-profit organization with a mission to help the scholarly community take advantage of advances in technology. For more information regarding JSTOR, please contact [email protected]. http://www.jstor.org Wed Aug 1 10:03:33 2007

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Page 1: Social Capital, Strategic Relatedness and the Formation of … capital... · 2007-08-01 · Strategic Management Journal Strut. Mgmt. J., 21: 925-939 (2000) / SOCIAL CAPITAL, STRATEGIC

Social Capital, Strategic Relatedness and the Formation of IntraorganizationalLinkages

Wenpin Tsai

Strategic Management Journal, Vol. 21, No. 9. (Sep., 2000), pp. 925-939.

Stable URL:

http://links.jstor.org/sici?sici=0143-2095%28200009%2921%3A9%3C925%3ASCSRAT%3E2.0.CO%3B2-A

Strategic Management Journal is currently published by John Wiley & Sons.

Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available athttp://www.jstor.org/about/terms.html. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtainedprior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content inthe JSTOR archive only for your personal, non-commercial use.

Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained athttp://www.jstor.org/journals/jwiley.html.

Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission.

The JSTOR Archive is a trusted digital repository providing for long-term preservation and access to leading academicjournals and scholarly literature from around the world. The Archive is supported by libraries, scholarly societies, publishers,and foundations. It is an initiative of JSTOR, a not-for-profit organization with a mission to help the scholarly community takeadvantage of advances in technology. For more information regarding JSTOR, please contact [email protected].

http://www.jstor.orgWed Aug 1 10:03:33 2007

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Strategic Management Journal Strut. Mgmt. J., 21: 925-939 (2000)

/ SOCIAL CAPITAL, STRATEGIC RELATEDNESS AND THE FORMATION OF INTRAORGANIZATIONAL

( LINKAGES WENPIN TSAI" Smeal College of Business Administration, Pennsylvania State University, Univer- sity Park, Pennsylvania, U.S.A.

This paper investigates the evolutionary dynamics of network formation by analyzing how organizational units create new interunit linkages for resource exchange. Using sociometric techniques and event history analysis, this study predicts the rate at which new interunit linkages are created between a newly formed unit and all the existing units in a large multinational organization. Two important constructs: social capital, derived from the literature on social structure and network formation, and strategic relatedness, derived from research on diversijication and the resource-based view of the firm, are used to explain the rate of new linkage creation. Results show that the interaction between social capital and strategic relatedness signijicantly affects the formation of intraorganizational linkages. Copyright O 2000 John Wiley & Sons, Ltd.

A fundamental challenge for multiunit organi-zations is to leverage resources and knowledge developed by their diverse organizational units. Such resources or knowledge is an important source of organizational success, but is often sticky and difficult to spread (Von Hippel, 1994; Szulanski, 1996). Because of tacitness of knowl- edge (e.g., Winter, 1987) as well as causal ambi- guity (e.g., Lippmann and Rumelt, 1982), organi- zational units have to cope with many kinds of difficulties to gain from exchanging resources with other units inside organizations. Resource exchange among organizational units occurs in a shared social context in which intraorganizational (or interunit) linkages are created. The creation of such linkages provides a foundation for a firm to leverage its internal resources and knowledge. As many scholars have argued, networks of

Key words: social capital; network formation; intraorganizational linkages *Correspondence to: Wenpin Tsai, Smeal College of Business Administration, Pennsylvania State University, 435 Business Administration Building, University Park, PA 16801, U.S.A.

Copyright O 2000 John Wiley & Sons, Ltd.

intraorganizational linkages are effective for sourcing and transferring knowledge that leads to competitive advantage (e.g., Ghoshal and Bartlett, 1990; Nahapiet and Ghoshal, 1998; Nohria and Garcia-Pont, 199 1; Hansen, 1999; Podolny, 1998; Powell, 1990).

While great effort has been devoted to the study of firm-specific resources and knowledge, there is less systematic understanding of the dynamic process of interunit resource exchange or knowledge sharing. Previous research has taken a static view by focusing on stable patterns of exchange among organizational units. Such a static view ignores the process of a firm's internal network formation that can influence the develop- ment of organizational capability over time. Indeed, many important research questions require exploration of the dynamic properties of network linkages within organizations: How do intra-organizational linkages evolve over time? Why can some organizational units quickly create an interunit linkage for resource exchange (or knowl- edge transfer) while others take longer to do so?

The aim of this research is to address these

Received 28 May 1999 Final revision received 11 May 2000

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questions in the context of a large, complex multiunit organization. As several scholars have argued, the structure of a multiunit organization can be conceptualized as a network arrangement consisting of a set of relational ties linking together dispersed organizational units (e.g., Miles and Snow, 1986; Nohria and Eccles, 1992; Nohria and Ghoshal, 1997). Based on this conceptuali- zation, interactions (including communication and resource flows) among different units of an organization can be analyzed using a network perspective. An organization or a network, how- ever, does not always contain the same set of participating actors. New actors may join and existing actors may leave. Interesting network patterns thus emerge when existing actors start interacting with new actors.

In this study, I investigated the creation of new interunit linkages in a multinational food- manufacturing company. I observed interactions among all the business units within the company for a recent 24-month period beginning in 1996, when a new business unit was established in the company. I analyzed the timing of which new interunit linkages are created between the new unit and all the existing units in the company and identified a set of structural, relational, and stra- tegic factors that affected the rate of new linkage creation. The results of this study inform both the social network perspective and the resource-based view of intrafirm linkages, and suggest avenues for future research in this emerging area of inquiry.

THEORY AND HYPOTHESES

Intraorganizational linkages for resource exchange

Inside a multiunit organization, different units can establish linkages among themselves to exchange resources and transfer knowledge. Through such linkages, organizational units can access other units' knowledge and learn from each other. Intraorganizational or interunit resource exchange is an attractive alternative to market exchange because different units of an organization usually share similar values and common corporate lan- guages that can facilitate communication in the exchange process. Many studies have shown that intraorganizational linkages enable an organi-zation to achieve economies of scope and have a crucial bearing on the organization's competitive

Copyright O 2000 John Wiley & Sons, Ltd.

advantage (e.g., Hill and Hoskisson, 1987; Gupta and Govindarajan, 1991). Also, research on diver- sification has suggested that there are synergistic benefits for resource exchange or knowledge shar- ing among related units within the same organi- zation (e.g., Rumelt, 1974). Through generation of new applications from existing resources or knowledge, intraorganizational linkages allow individual units to create value for their organi- zation (e.g., Tsai and Ghoshal, 1998).

In this study, I focus on intraorganizational linkages for resource exchange that involve trans- fer and sharing of resources or knowledge among organizational units. In particular, I investigate how such linkages are created between a newly formed unit and all the exiting units in an organi- zation. The existing units are interested in exchanging resources with the new unit because the new unit represents the emergence of new ideas and new market opportunities. By collabo- rating with the new unit, the existing units can access new market information and expand their business domains. Also, the existing units can gain new expertise from the new unit and enhance their capabilities to adapt to a new environment. The new unit is also interested in exchanging resources because it can learn from the routines and best practices developed by the existing units. The new unit may also gain legitimacy by colla- borating with the existing units and enhance its performance by leveraging the existing knowledge in the organization.

Path dependence and creation in intraorganizational networks

Although organizational units can benefit from new interunit linkages, creating such new linkages is not easy. Several scholars have argued that social relations are 'path dependent' in the sense that prior linkages determine the formation of future linkages (e.g., Gulati, 1995; Levinthal and Fich- man, 1988; Walker, Kogut, and Shan, 1997). Because of the lack of information about the com- petencies and reliabilities of potential partners, developing a relationship with a new actor takes time and involves uncertainty. Once two actors 'have developed specific routines for managing an interface with each other' (Gulati, 1995: 626), they tend to rely exclusively on such routines and ignore opportunities for initiating relationships with new partners. As Cook has argued,

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Intraorganizational Network Formation 927

firm attachments or commitments often develop between exchange partners due to the investment made and the costs involved in establishing and maintaining the relationship. The attachment or commitment serves to prolong the exchange and tends to limit the mobility of exchange partners. (Cook, 1977: 68)

In the interorganizational context, Levinthal and Fichman (1988) investigated the dynamics of auditor-client relationships and found positive duration dependence in these relationships. In addition, Van de Ven and Walker (1984) explored the role of coordination and found that initial relationships significantly affected their sub-sequent development. Relation-specific capital such as trust and tacit understanding develops over time. The potential gains associated with such relation-specific capital are likely to direct people's attention to existing relationships rather than new ones.

If maintaining existing linkages is a dominant force in network formation, social networks, in general, seem to be inert. However, at the individ- ual actor level, different networking opportunities exist and some actors are better than others at capturing these opportunities. In a study of intraorganizational networks, Tsai (1998) showed that different organizational units possess different levels of 'strategic linking capability' which determines their effectiveness in using interunit linkages for exchanging resources and transfemng knowledge. The idea of strategic linking capa- bility highlights the differences among individual actors in the process of network formation through creation of new interunit linkages. Organizational units that are capable of creating new interunit linkages are likely to access new resources or knowledge that is embedded in other units. Simply maintaining a stable pattern of existing relationships cannot meet all the different needs in a world of increasing competition and changing technology. Collaborating with new partners and creating new relationships are neces- sary for acquiring critical resources and getting external support. The sooner an actor can create a new relationship, the earlier it can obtain the required resources and support.

To understand how organizational units can quickly create new interunit linkages, I examined two important concepts: social capital, derived from the literature on social structure and network formation, and strategic relatedness, derived from

research on diversification strategy and the resource-based view of the firm. Social capital describes the social context that facilitates or con- strains individual actors' selection of exchange partners (e.g., Bourdieu and Wacquant, 1992; Burt, 1992; Coleman, 1990). Strategic relatedness characterizes the extent to which two organi-zational units are strategically similar1 and pin- points the opportunity for sharing strategic resources between the two units (e.g., Prahalad and Bettis, 1986; Rumelt, 1974; Teece et al., 1994). These two concepts, social capital and stra- tegic relatedness, provide complementary expla- nations for the creation of new interunit linkages.

Social capital and creation of new interunit linkage

Social capital represents the relational resources attainable by individual actors through networks of social relationships (e.g., Baker, 1990; Bourd- ieu and Wacquant, 1992; Coleman, 1990; Portes, 1998; Portes and Sensenbrenner, 1993; Putnam, 1995). Social capital is a powerful concept for understanding the emergence, growth, and func- tioning of network linkages. As Walker et al. (1997) have maintained, social capital influences network formation that proceeds through the establishment of new relationships. By providing a shared context for social interactions, social capital facilitates the creation of new linkages in the organizational setting.

Based on a comprehensive review of previous research on social capital, Nahapiet and Ghoshal (1998) and Tsai and Ghoshal (1998) have con-sidered social capital as a broadly defined multi- dimensional construct that can contribute in many ways to the creation of new value for an organi- zation. According to these authors, social capital includes a structural component, which manifests itself in attributes of an actor's network position, and a relational component, which encompasses trustworthiness and trusting relationships among network actors. In this study, I focus on these two components of social capital and examine how they influence the creation of new interunit linkages.

In this study, I consider two organizational units are strategi- cally similar when they value the same kinds of strategic assets.

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928 W. Tsai

The structural dimension of social capital: prior network centrality

According to Tsai and Ghoshal (1998), an actor's location in a social network captures the structural dimension of social capital. An individual actor that is centrally located in a network may possess unique advantages in getting access to certain resources or actors. As Ibarra (1993) has argued, a high network centrality implies a high position in a status hierarchy and a high degree of access over valued resources. Holding a central network position is an important element of social capital that facilitates an individual actor's occupational attainment (e.g., Lin, Ensel, and Vaughn, 1981; Marsden and Hurlbert, 1988), career mobility (e.g., Podolny and Baron, 1997), power (e.g., Brass, 1992), and external resource acquisition (e.g., Tsai, 1998). In the interorganizational set- ting, research has suggested that prior social relationships facilitate the establishment and governance of future relationships (e.g., Gulati, 1995). In the intraorganizational setting, an organizational unit that is centrally located in the interunit network is likely to have a privileged access to critical resources because of its locational advantages. Such a central unit is likely to use its existing contacts to approach other units quickly. In addition, such a unit is highly visible and is a major channel of information for other units. Because of its high potential communication activity, a central unit is capable of dealing with complex interunit relationships and is likely to become an attractive partner to other units. It is reasonable to expect that such a central unit is able to attract other units to establish new interunit linkages quickly. Accordingly:

Hypothesis 1. An organizational unit's prior network centrality will be positively related to the rate of new linkage creation.

The relational dimension of social capital: trustworthiness

Many scholars have articulated that trustworthi- ness is an important aspect of social capital (e.g., Coleman 1990; Fukuyama, 1995; Putnam, 1995). An actor's trustworthiness signals to other parties (including both those that have interacted with the actor in the past and those that have not) its willingness to forego short-term outcomes obtain-

Copyright O 2000 John Wiley & Sons, Ltd.

able through opportunistic behaviors (Chiles and McMackin, 1996: 87). Several recent studies have challenged the traditional opportunism-based theories of the firm and have emphasized the role of trustworthiness in governing social and economic exchange (e.g., Conner and Prahalad, 1996; Ghoshal and Moran, 1996). Trustworthiness not only constrains opportunistic behaviors but also reduces the costs of finding an exchange partner (e.g., Chiles and McMackin, 1996; Grano- vetter, 1985). As Uzzi has noted, trustworthiness 'facilitated the exchange of resources and infor- mation that are crucial for high performance but are difficult to value and transfer via market ties' (Uzzi, 1996: 678).

The potential benefits of creating intraorgani- zational strategic linkages can be achieved only if trustworthiness exists among organizational units. Inside a multinational or multiunit organization, a high degree of trustworthiness is particularly important as it can achieve global integration in 'the differentiated network' structure in which dispersed organizational units are linked to each other by independent relationships (Nohria and Ghoshal, 1997). Trustworthiness allows the exchange of idiosyncratic resources and fine-grained information, and shapes the patterns of interunit strategic linkages. An organizational unit's reputation for trustworthiness is mainly determined by other units' perceptions and evalu- ations of the unit's integrity and reliability in interunit exchange. Such a reputation for trust- worthiness is an important factor that will influ- ence a unit's preferences in selecting its exchange partners, as a unit will be more willing to exchange resources with the units that it perceives as trustworthy. Put differently, a trustworthy unit is an attractive exchange partner and other units are likely to establish new linkages with such a unit. As Fukuyama has argued, trustworthiness is a useful kind of social capital that increases 'the capacity to form new associations' (Fukuyarna, 1995: 27). Accordingly:

Hypothesis 2. An organizational unit's trust- worthiness will be positively related to the rate of new linkage creation.

Strategic relatedness and creation of new interunit linkage

The strategy of related diversification enables

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Intraorganizational Network Formation 929

firms to exploit economies of scope through com- mon strategic assets among different business units (Peteraf, 1993; Teece et al., 1994). Because certain resources are neither tradable nor imitable through external market mechanisms, internal resource sharing among related units becomes an important source of an organization's competitive advantage (Dierickx and Cool, 1989; Kogut and Zander, 1992). In this study, I emphasize relatedness at the strategic rather than the oper- ational level. Many previous studies have meas- ured relatedness based on similarity of SIC code (e.g., Palepu, 1985). Such SIC-based measures are likely to exclude instances where two business units are strategically related. In particular, many conglomerate firms that are typically treated as unrelated diversification may in fact exhibit a degree of strategic similarity across their business units that makes them related in a cognitive sense (e.g., Markides and Williamson, 1996; Prahalad and Bettis, 1986). By emphasizing strategic simi- larity among organizational units, the concept of strategic relatedness may capture the motivation for organizational units to exchange strategic resources even though these units do not share the same SIC code.

A high degree of strategic relatedness between two organizational units implies that they have prior related knowledge that allows effective utili- zation of new knowledge (Cohen and Levinthal, 1990). Hence, strategic relatedness is an important factor that affects an organizational unit's decision to forge a new interunit linkage. As Inkpen has noted, 'New knowledge in an area we are familiar with is generally easier to acquire than knowledge about an unfamiliar area. Unre- lated knowledge will be difficult to acquire and may, in fact, have limited value because of a lack of common language for understanding the knowledge' (Inkpen, 1998: 76).

It is difficult to create a linkage for resource exchange between two unrelated units because of the lack of shared language and common interests which are important for the effectiveness of their communications. When two units are strategically related, their common interests may motivate them to exchange information and resources in a way that both parties can benefit. Other things being equal, the higher the strategic relatedness between two organizational units, the higher their incentive to exchange or share their resources through an interunit strategic linkage. To the

Copyright O 2000 John Wiley & Sons, Ltd.

extent that two organizational units are strategi-cally related, this facilitates their ability to gain access to each other. Hence:

Hypothesis 3. An organizational unit's stra-tegic relatedness will be positively related to the rate of new linkage creation.

Strategic relatedness may strengthen the effect of social capital on the creation of new interunit linkages. With strategic relatedness, organi-zational units may become increasingly aware of differences in centrality and trustworthiness when choosing an exchange partner. An organizational unit with high network centrality may create new linkages more quickly with strategically related units because strategic relatedness stimulates their interests in exchanging resources. Also, a trust-worthy unit may create new linkages more quickly with strategically related units because trust reduces appropriation concerns and facili-tates cooperation between related units. Put differ- ently, social capital is likely to have a stronger impact on the rate of new linkage creation when there is a high level of strategic relatedness between two units. As Gulati and Gargiulo (1999) have suggested, the interaction between social structure and strategic interdependence signifi- cantly affects alliance formation. The impact of social capital on the creation of new linkages is likely to be contingent on the extent to which two units are strategically related. It is reasonable to expect a positive interaction between social capital and strategic relatedness on the rate of new linkage creation. Hence:

Hypothesis 4a. An organizational unit's prior network centrality is more positively associated with the rate of new linkage creation when there is a high level of strategic relatedness.

Hypothesis 4b. An organizational unit's trust- worthiness is more positively associated with the rate of new linkage creation when there is a high level of strategic relatedness.

METHODS

Data collection and research site

The research was conducted in a large multi-national company. The company was founded in

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930 W. Tsai

1967 by a group of business elite that shared the same interests in the food-manufacturing industry. During the past three decades, the company has continuously expanded new businesses and gradu- ally become a diversified conglomerate. By 1996, the company had annual sales around U.S. $4 billion and total assets of U.S. $3.8 billion. It consisted of 36 business units and had a wide range of products including edible oil, beverages, fast foods, and dairy products. The interactions among the business units were basically voluntary and the organizational structure in the company was a typical multiunit form in which each unit dealt with conceptually distinct businesses and was self-contained with its own functional hier- archy. There were no formal requirements in the company for the business units to exchange resources or knowledge with certain other units. Each business unit was financially independent and had full discretion about choosing its business partners inside the company or outside.

In September 1996, a new business unit was established within the company. The new unit specialized in manufacturing and selling healthy food products, which represented an emerging high-profit segment in the food industry. The new business opportunities associated with the new unit attracted a lot of attention within the com- pany and stimulated many existing units to col- laborate with the new unit. To examine the inter- unit linkages within the company, I collected questionnaire data on the interactions among the 36 units before the new unit had been officially established. I then investigated how the new unit interacted with other units for 2 years. All ques- tionnaire data were collected on site at two points in time. The first questionnaire was administrated in 1996 when there were only 36 units in the company; the second was in 1998, when there were 37 units in the company. After consulting with the corporate headquarters of the company, I asked the director of each business unit to respond to my questionnaires. These directors were also interviewed after they filled in the questionnaire (in both 1996 and 1998). During the interviews, I clarified unclear questions and ensured that respondents had provided complete information in the questionnaire. Respondents were assured that their individual responses were confidential and would be used for research pur- poses only. In addition to questionnaire surveys, corporate internal records were also used to sup-

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plement my data analysis.

Operationalization of variables

New linkage creation

To investigate the creation of interunit linkages for resource exchange, I asked respondents (the directors of the original 36 business units) in my second questionnaire survey to indicate when their units started exchanging resources with the newly formed unit. I distinguished between two types of resource exchange: tangible and intan- gible. Tangible exchange involves transfer or sharing of tangible resources such as special input materials or specific product components. Intan- gible exchange involves transfer or sharing intan- gible resources such as technical skills or know- how. Respondents reported the initial dates for each type of exchange in my second questionnaire survey (in 1998). To verify the responses, I pro- vided a different questionnaire to the new unit asking when it started exchanging resources with all the other units. Consistence was found after I double-checked all the responses during my follow-up interviews.

Based on the information provided by the respondents, I calculated, for each unit, the dur- ation (the amount of time that passed until the creation of its first linkage with the newly formed unit) in months. Since the second questionnaire was administrated 24 months after the new unit was formed, I coded the data ranging from 1 to 24. Duration that had no ending date (no linkage had yet occurred) was treated as right-censored data.

To transform the above data for my subsequent analysis and hypothesis testing, I used event his- tory technique^,^ which allowed me to incorporate right-censored data (e.g., Allison, 1984; Tuma and Hannan, 1984). The event of interest here is the creation of a new strategic linkage between an existing unit and the new unit. By definition, occurrence of an event assumes a preceding time interval that represents its nonoccurrence (Yamaguchi, 1991). More specifically, a certain time period or duration of nonoccurrence must

* The event history techniques have been applied to analyze the longevity of interorganizational relationships. See, for example, Levinthal and Fichman (1988) and Miner, Ambur- gey, and Steams (1990).

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Intraorganizational Network Formation 931

exist. In this study, the duration was the time elapsed before an existing unit established a link- age with the new unit (as described in the above paragraph) and the rate of new linkage creation can be written as

P(t+At>Tat 1 T a t )h(t) = lim

At

where P(t + At > T r t I T r t) indicates the probability that the event occurs during the time (t, t + At) given that the event did not occur prior to time t. In this study, the hazard rate can be interpreted as the instantaneous probability that an existing unit will create a linkage with the new unit, given that it has yet to do so.

Prior network centrality

In my first questionnaire survey (in 1996), 1 asked respondents to report the units with which they communicated frequently. I provided a list of all the business units of the company in the questionnaire so that the respondents could simply select the units that applied. Using data collected from this questionnaire item, I constructed an adjacency matrix of interunit communication among the 36 business units. I then symmetrized the matrix to focus on bilateral communications and calculated the degree centrality index for each business unit. I chose the degree centrality index because, as Freeman (1979) has argued, it is rela- tively the most suitable centrality measure for cap- turing an individual actor's visibility, information access, and potential communication activity.

Trustworthiness

As Barney and Hansen (1994) have asserted, trust is an attribute of a relationship and trustworthi- ness is an attribute of an individual actor. Tsai and Ghoshal (1998) have also suggested that an actor's trustworthiness can be measured by its locational properties in a network of trusting relationships. Based on these authors' conceptualization, I surveyed interunit trusting networks before I operationalized trustworthiness at the business unit level. Interunit trusting net- works were examined by asking two questions: (1) 'Suppose your unit is looking for business partners inside your organization for a joint proj- ect. Which units are you confident that they will

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do what you require (what you believe they should do) even without writing a contract to clearly specify their obligations?'; (2) 'Which units can provide your unit with reliable infor- mation or service?'

The 1996 survey data were used here for the trustworthiness measure, because my objective was to examine how a unit's trustworthiness affected its subsequent (1996-98) networking activities. The data consisted of responses gath- ered from the above two questions. Based on the responses, I created two sociomatrices (adjacency matrices) and calculated 'indegree' for each unit in each matrix. Indegree was used as a measure of trustworthiness here, as it counted the number of nominations that a unit received in the interunit trusting network. The higher the indegree a unit had, the more trustworthy the unit was. I then standardized the indegree measure for each of the two interunit trusting networks. Cronbach's coefficient alpha for the two indegree measures (derived from the two matrices of trusting relations) was 0.89.

Strategic relatedness

Following Verdin and Williamson (1994) and Markides and Williamson (1996), I oper-ationalized strategic relatedness based on five broad categories of strategic assets: (1) customer assets, such as brand recognition and customer loyalty; (2) channel assets, such as channel access and pipeline stock; (3) input assets, such as qual- ity of suppliers and financial capacity; (4) process assets, such as proprietary technology; and ( 5 ) market knowledge, such as accumulated infor- mation on demand or market responses. Respon- dents were asked to rate the importance of these assets to their units' operations (using a scale of high, low, or moderate).

I then compared the responses across all the units. I considered two units to be strategically related if they highlighted the importance of the same category (or categories) of strategic assets. As Prahalad and Bettis (1986: 490) have argued, strategically similar businesses within a firm can be managed using a 'dominant logic' that is 'the way in which managers conceptualize the busi- ness and make critical resource allocation decisions-be it in technologies, product develop- ment, distribution, advertising, or in human resource management'. The dominant logic is

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932 W. Tsai

stored in managers' mindset. When managers of two different units have a similar mindset that emphasizes similar strategic assets, the two units are strategically related. To measure the extent to which two units emphasized similar strategic assets, I created a variable counting the number of categories for which two units had the same responses. The variable was coded from 0 (which means two units had nothing in common in terms of their responses to the above category) to 5 (which means two units had exactly the same responses to the above five categories). For example, unit A considered customer assets, chan- nel assets, and market knowledge were important; unit B considered input assets, process assets, and market knowledge were important. Since units A and B had only one response in common (which is market knowledge), I coded 1 to indicate the extent of the strategic relatedness between units A and B. In this study, strategic relatedness was used to explain the creation of new interunit linkages with the newly formed organizational unit. So, for each of the 36 original units in the company, I calculated the degree of its strategic relatedness with the newly formed unit based on my 1998 survey data.

Control variables

Several control variables were included in this study. First, unit size may affect the rate of new linkage creation because size is an important consideration for a unit to select its exchange partners. As Burgers, Hill, and Kim (1993) have argued, large companies are likely to enter alliances with small companies. To control for the possible size effect, I used the logarithms of unit sales as an indicator of unit size in my analysis. In addition, geographic locations may also affect the networking activities among organizational units. Two units operating in the same geographic area are more likely to create a linkage between them. To account for this alterna- tive explanation, I included a dummy variable (geographic proximity) coding 1 if an exiting unit and the new unit had major business operations in the same country, and 0 otherwise. Moreover, I expected that the internal transfer of employees across different units within the company might also affect the creation of new interunit linkage. In this specific sample, a few employees of the new unit were transferred from other units. These

Copyright O 2000 John Wiley & Sons, Ltd.

employees may become key contacts for the new unit to reach their previous working unit. Hence, I included a variable counting the number of employees being transferred from each of the existing units to the new unit.

Analysis

To statistically test my hypotheses, I estimated a proportional hazards model (Cox, 1972). The use of the Cox proportional hazards model suits the objectives of this study. By including a time-dependent unspecified term in the model, the method allows environmental changes to be treated as an arbitrary function of time. Also, it counts for problems associated with the censoring of units that have not yet created a linkage with the new unit, but may nevertheless do it later. The model is often described as partially parametric or semiparametric, because it does not impose any distributional assumptions on the data. However, it does assume that the hazard functions (i.e., the probability of creating a new interunit strategic linkage, conditional on time) at different levels of an independent variable are proportional to an unspecified baseline hazard function. Following Anderson (1982), I examined the graphs of the natural logarithms of cumulative baseline hazard functions to check the proportionality assumption. For each variable examined, the functions appeared to be approximately proportional to each other, indicating that the proportionality assump- tion was not violated. The proportional hazards regression model, prior to adding interactions, was:

h(t) = h(0) exp

(PIXcontrols + PZXprior network centrality +

P3Xuustworthiness + bXstrategic relatedness)

where h(t) is the hazard function (i.e., the rate of new linkage creation) at time t, h(0) is the baseline hazard function, Pi are the estimated regression weights, and Xi are the explanatory variables.

RESULTS

Table 1 shows the mean values, standard devi- ations, and correlations among all the measured

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Intraorganizational Network Formation 933

Table 1. Means, standard deviations, and correlations

Variables Mean S.D.

XI Prior network centrality 0.32 0.25 X, Trustworthiness 38.06 12.06 X, Strategic relatedness 1.67 1.29 X4 Unit size 2.33 0.44 X, Geographic proximity 0.44 0.50 X, Employee transfer 0.56 1.11

* p < 0.05; * * p < 0.01 (two-tailed test)

variables in this study. Figure 1 parts (a) and (b) show the product limit (Kaplan-Meier) estimate of the survival function for tangible and intangible resource exchange, respectively. This figure describes how the new unit was integrated into the company over time. As shown in Figure l(a),

Figure 1. Product limit estimate of survival function. (a) Tangible resource exchange. (b) Intangible resource

exchange

XI x z x3 x4 x5

0.44** -0.00 0.10

0.18 0.40* 0.11 -0.11 0.05 -0.03 -0.08

0.42* 0.22 0.15 0.09 -0.05

most new linkages for tangible resource exchange were created during the first year since the new unit was established. No new linkage for tangible resource exchange was created after month 15. In contrast, Figure l(b) shows that a few linkages for intangible resource exchange were created after month 15.

Table 2 presents the results of the Cox regression analyses examining the rate of new linkage creation. Several models were estimated. Models 1, 2, and 3 predict the time to first interunit exchange without differentiating differ-ent types of resources being exchanged. Models 4 and 5 predict the time to first tangible exchange controlling for the occurrence of prior intangible exchange (using a binary variable coding 1 if an existing unit previously had an intangible exchange with the new unit before). Models 6 and 7 predict the time to the first intangible exchange controlling for the occurrence of prior tangible exchange (using a binary variable coding 1 if an existing unit previously had a tangible exchange with the new unit).

As shown in Model 2, the coefficient for prior network centrality is positive and significant at the 0.01 level, suggesting that a unit with higher prior network centrality is likely to create a new interunit linkage more quickly. Thus Hypothesis 1 is supported. Model 2 also shows that the coefficient for trustworthiness is positive, as pre- dicted. However, the result is only significant at the 0.10 level, indicating that a trustworthy unit is somewhat more likely to create a new linkage quickly. Thus Hypothesis 2 is only marginally supported here. In addition, the coefficient for strategic relatedness is positive and significant at the 0.01 level, suggesting that strategic relatedness increases the likelihood of new linkage creation. Therefore, Hypothesis 3 is supported.

Copyright O 2000 John Wiley & Sons, Ltd. Srrat. Mgmt. J., 21: 925-939 (2000)

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Table 2. Effects of social capital and strategic relatedness on new linkage creation

New linkage creation-not distinguish between tangible and intangible exchange

Variables Model 1 Model 2 Model 3

Unit size

Geographic proximity

Employee transfer

Prior tangible exchange

0.275 (0.455) 0.173

(0.404) 0.593*

(0.237)

Prior intangible exchange

Prior network centrality (H,)

Trustworthiness (H,)

Strategic relatedness (H,)

Prior network centrality X strategic relatedness (H,,) Trustworthiness X strategic relatedness (H,,) -2 log likelihood Chi-square

157.539 7.647'

New linkage creation for tangible exchange

Model 4

-0.379 (0.603) 0.346

(0.488) 0.156

(0.274)

0.566 (0.719) 9.594**

(2.245) 0.030

(0.022) 1.773**

(0.392)

96.110 55.860**

Model 5

0.223 (0.676) 0.659

(0.520) 0.089 (.0371)

1.246 (0.848) 8.565**

(3.073) 0.070+

(0.037) 2.969**

(1.087) 4.343**

(1.615) 0.058*

(0.026) 85.530 69.992**

-.2 New linkage creation for

intangible exchange

Model 6 Model 7

-0.697 (0.612)

-0.252 (0.473)

-0.105 (0.233)

-0.360 (0.695)

2.987* (1.465) 0.491*

(0.025) 0.498*

(0.240)

114.016 27.464**

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Intraorganizational Network Formation 935

Model 3 introduces the interaction term between prior network centrality and strategic relatedness. The result shows that the coefficient for this interaction term is positive and is sta-tistically significant at the 0.01 level, indicating that the effect of prior network centrality on the rate of new linkage creation becomes more salient when there is a high level of strategic relatedness. Thus, Hypothesis 4a is supported. Model 3 also includes the interaction term between trustworthi- ness and strategic relatedness. As expected, the coefficient of the interaction term is positive and significant at the 0.05 level, suggesting that trust- worthiness has a greater impact on the rate of new linkage creation when there is a high level of strategic relatedness. Hence, Hypothesis 4b is also supported.

Models 4 and 5 focus on interunit linkages for tangible exchange only. As shown in Table 2, prior network centrality and strategic relatedness are still significant predictors @ < 0.01) in Model 4. In contrast, trustworthiness is not statistically significant in this model. The result suggests that a unit's trustworthiness does not increase its like- lihood of tangible exchange. Table 2 also shows that prior intangible exchange is not a significant predictor in Model 4, indicating that the occur-rence of prior intangible exchange does not increase the likelihood of tangible exchange. The interaction terms between social capital measures and strategic relatedness remain significant in Model 5. Strategic relatedness strengthens the effect of social capital on tangible exchange.

Models 6 and 7 focus on interunit linkages for intangible exchange only. As shown in Table 2, prior network centrality, trustworthiness, and strategic relatedness are all significant predictors @ < 0.05) in Model 6, suggesting that both social capital and strategic relatedness increase the like- lihood of intangible exchange. Table 2 also shows that prior tangible exchange is not a significant predictor in Model 6, indicating that the occur-rence of prior tangible exchange does not increase the likelihood of intangible exchange. Model 7 shows that the interaction between prior network centrality and strategic relatedness is significant at the 0.10 level and the interaction terms between trustworthiness and strategic relatedness are sig-nificant at the 0.05 level. The results show that strategic relatedness strengthens the effects of prior network centrality and trustworthiness on intangible exchange.

Copyright O 2000 John Wiley & Sons, Ltd

DISCUSSION

Overall, the findings of this study support the idea that both social capital and strategic relatedness affect the creation of new interunit linkages. The results respond to an unanswered question in the extant literature: Where do net- work linkages come from? Previous research has explored the role of prior linkages in network formation without explaining how linkages are created in the first place. Social structure evolves through the creation of new linkages. By empiri- cally investigating how new interunit linkages are created within an organization, this study contributes to our understanding of the evolu-tionary dynamics of an organization's internal social structure. The new linkages modify the existing social structure and provide new oppor- tunities for productive resource exchange among organizational units. Creating new linkages, how- ever, is not an easy task. Inside an organization, the opportunities to create new linkages are not readily available to every organizational unit. This study provides evidence of intrafirm heterogeneity in terms of differential capability to access stra-tegic resources among organizational units. This study shows that some organizational units can quickly create new linkages with a newly estab- lished unit, while other units require more time to access the new unit. This study also shows that prior network centrality, trustworthiness, and strategic relatedness significantly affect the rate of new linkage creation. The results provide answers to an important question: What kinds of organizational units are likely to create new inter-unit linkages quickly? Organizational units that are rich in social capital can more quickly create a new linkage for resource exchange. Also, organizational units that share a higher degree of strategic relatedness are likely to more quickly create a new interunit linkage to realize the poten- tial synergy in related business operations. The results support social capital explanation for net- work formation and, at the same time, confirm the role of strategic relatedness in shaping intrafirm linkages.

Social capital and strategic relatedness expla-nations for intraorganizational network formation are not mutually exclusive and could si-multaneously affect the rate of new linkage cre- ation. The interaction results suggest that inter- esting dynamics exist among prior network

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centrality, trustworthiness, and strategic related- ness. The results indicate that prior network cen- trality more effectively influences the rate of new linkage creation between two strategically related units. Similarly, trustworthiness has a more posi- tive effect on the rate of new linkage creation between two strategically related units. The results shed light on studies of diversification in the strategy literature. While strategy scholars have emphasized synergy among related business units in multiunit organizations, they ignore the processes of social interactions that influence the extent to which synergy can be achieved. In fact, each business unit has a unique relational profile underlying its social capital and ability to access other units. Examining the interaction between strategic relatedness and social capital may enhance our understanding of diversification strat- egy-

To better understand the creation of different kinds of intraorganizational linkages, I have dis- tinguished between tangible and intangible resource exchanges in my analyses. The results suggest that trustworthiness has a more significant positive effect on intangible exchange than on tangible exchange. Because it is difficult to write a detailed contract to govern an intangible exchange, trustworthiness becomes an important concern when organizational units are involved in such exchange. Intangible resources contain 'tacit' knowledge that is difficult to articulate (e.g., Polanyi, 1967; Nonaka and Takeuchi, 1995). Effective transfer of intangible resources requires an intensive, complex communication process in which trustworthiness plays an important role. A high level of trustworthiness, however, may be less important in a situation where interunit link- ages are based on transfer or sharing tangible resources. Because tangible resources are more explicit and less ambiguous, fewer communi-cation problems are expected and a more instru- mental motivation, strategic relatedness, becomes a major driving force for creating a new inter-unit linkage.

Drawing on 'the dominant logic' (Prahalad and Bettis, 1986), I developed a strategic relatedness measure based on the similarity of perceived importance of business unit strategic assets. Recent research has investigated several different types of relatedness such as skill-based or manu- facturing-based relatedness (Farjoun, 1998; St John and Harrison, 1999). Future studies can

Copyright O 2000 John Wiley & Sons, Ltd

explore how different types of relatedness affect new linkage creation.

An important limitation of this study is the potential sampling bias due to the fact that I relied only on the responses of unit directors in the company. It is possible that some informal exchanges were excluded from this study because these directors were not aware of such exchanges. My choice of these respondents was based on the advice of corporate managers about people in the business units who had a thorough under-standing of the operations and interunit activities of their units. Not surprisingly, the unit directors were relatively more knowledgeable on these is- sues, because of their overview roles.

Despite the limitation, this research provides a source of motivation to study network formation. Even though several researchers have proposed mathematical models to analyze longitudinal net- work data (e.g., Iacobucci and Wasserman, 1988; Leenders, 1995; Snijders, 1996), specific theory on network formation is still underdeveloped. As pointed out by Wasserman and Faust, 'Network analysis and models have often been criticized for being static. Although much work has been done on longitudinal models, applications of this methodology are sorely lacking' (Wasserman and Faust, 1994: 730). Continuous records of network changes are often hard to collect and methods for analyzing longitudinal data are quite complicated. Many more efforts are still required to study the process of network formation.

With longitudinal network data on intrafirm linkages, future researchers can also examine how an organizational unit's structural position changes over time and indicate how overall organizational structure is altered by the entry of new units. Network structural positions may sig- nal status differences among actors (Podolny, 1993) and shape the pattern of their future inter- actions. In a longitudinal study of alliances in the semiconductor industry, Stuart (1998) has argued that a firm's position in the network of 'technological building relations' predicts alliance formation at the firm level. Since poorly posi- tioned actors can only access less adequate resources to achieve their economic goals, social structure can act as a selection mechanism, cut- ting out some actors on the basis of their partners' weaknesses (Walker et al., 1997: 110). Analysis of network structural positions may thus yield some interesting findings showing how different

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Intraorganizational Network Formation 937

organizational units survive under such an intraorganizational selection mechanism.

Another interesting theme for future research is the coevolution of social structure and organi- zational capabilities. In this study, we have seen how organizational units create new linkages to exchange resources. But how do these new link- ages enhance the capabilities of the organizational units over time? As Kogut and Zander (1996) have argued, the capabilities of a firm lie pri- marily in an organizational learning process by which new knowledge is replicated or integrated across different parts of the firm. Such an organi- zational learning process can be understood by analyzing the social structure of interunit know- ledge sharing. Detailed analysis of such intraorganizational social structure can provide important information for business unit managers who are thinking about how to design their units to effectively leverage organizational knowledge and learn from other units.

ACKNOWLEDGEMENTS

I would like to thank Don Bergh, Dan Brass, Sumantra Ghoshal, Ranjay Gulati, Martin Kilduff, Costas Markides, Kevin Steensma, Associate Edi- tor Ed Zajac, and two anonymous referees of SMJ for their very helpful comments and sugges- tions. This research was partially funded by the Division of Research, Smeal College of Business at the Pennsylvania State University.

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Social Capital, Strategic Relatedness and the Formation of Intraorganizational LinkagesWenpin TsaiStrategic Management Journal, Vol. 21, No. 9. (Sep., 2000), pp. 925-939.Stable URL:

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2 Dynamics of Interorganizational Attachments: Auditor-Client RelationshipsDaniel A. Levinthal; Mark FichmanAdministrative Science Quarterly, Vol. 33, No. 3. (Sep., 1988), pp. 345-369.Stable URL:

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2 Interorganizational Linkages and Population Dynamics: Buffering and TransformationalShieldsAnne S. Miner; Terry L. Amburgey; Timothy M. StearnsAdministrative Science Quarterly, Vol. 35, No. 4. (Dec., 1990), pp. 689-713.Stable URL:

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Market Networks and Corporate BehaviorWayne E. BakerThe American Journal of Sociology, Vol. 96, No. 3. (Nov., 1990), pp. 589-625.Stable URL:

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Trustworthiness as a Source of Competitive AdvantageJay B. Barney; Mark H. HansenStrategic Management Journal, Vol. 15, Special Issue: Competitive Organizational Behavior.(Winter, 1994), pp. 175-190.Stable URL:

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A Theory of Global Strategic Alliances: The Case of the Global Auto IndustryWillem P. Burgers; Charles W. L. Hill; W. Chan KimStrategic Management Journal, Vol. 14, No. 6. (Sep., 1993), pp. 419-432.Stable URL:

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Integrating Variable Risk Preferences, Trust, and Transaction Cost EconomicsTodd H. Chiles; John F. McMackinThe Academy of Management Review, Vol. 21, No. 1. (Jan., 1996), pp. 73-99.Stable URL:

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Absorptive Capacity: A New Perspective on Learning and InnovationWesley M. Cohen; Daniel A. LevinthalAdministrative Science Quarterly, Vol. 35, No. 1, Special Issue: Technology, Organizations, andInnovation. (Mar., 1990), pp. 128-152.Stable URL:

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A Resource-Based Theory of the Firm: Knowledge versus OpportunismKathleen R. Conner; C. K. PrahaladOrganization Science, Vol. 7, No. 5. (Sep. - Oct., 1996), pp. 477-501.Stable URL:

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Asset Stock Accumulation and Sustainability of Competitive AdvantageIngemar Dierickx; Karel CoolManagement Science, Vol. 35, No. 12. (Dec., 1989), pp. 1504-1511.Stable URL:

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The Independent and Joint Effects of the Skill and Physical Bases of Relatedness inDiversificationMoshe FarjounStrategic Management Journal, Vol. 19, No. 7. (Jul., 1998), pp. 611-630.Stable URL:

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The Multinational Corporation as an Interorganizational NetworkSumantra Ghoshal; Christopher A. BartlettThe Academy of Management Review, Vol. 15, No. 4. (Oct., 1990), pp. 603-625.Stable URL:

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Bad for Practice: A Critique of the Transaction Cost TheorySumantra Ghoshal; Peter MoranThe Academy of Management Review, Vol. 21, No. 1. (Jan., 1996), pp. 13-47.Stable URL:

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Economic Action and Social Structure: The Problem of EmbeddednessMark GranovetterThe American Journal of Sociology, Vol. 91, No. 3. (Nov., 1985), pp. 481-510.Stable URL:

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Social Structure and Alliance Formation Patterns: A Longitudinal AnalysisRanjay GulatiAdministrative Science Quarterly, Vol. 40, No. 4. (Dec., 1995), pp. 619-652.Stable URL:

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Where Do Interorganizational Networks Come From?Ranjay Gulati; Martin GargiuloThe American Journal of Sociology, Vol. 104, No. 5. (Mar., 1999), pp. 1439-1493.Stable URL:

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Knowledge Flows and the Structure of Control within Multinational CorporationsAnil K. Gupta; Vijay GovindarajanThe Academy of Management Review, Vol. 16, No. 4. (Oct., 1991), pp. 768-792.Stable URL:

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The Search-Transfer Problem: The Role of Weak Ties in Sharing Knowledge acrossOrganization SubunitsMorten T. HansenAdministrative Science Quarterly, Vol. 44, No. 1. (Mar., 1999), pp. 82-111.Stable URL:

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Strategy and Structure in the Multiproduct FirmCharles W. L. Hill; Robert E. HoskissonThe Academy of Management Review, Vol. 12, No. 2. (Apr., 1987), pp. 331-341.Stable URL:

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Network Centrality, Power, and Innovation Involvement: Determinants of Technical andAdministrative RolesHerminia IbarraThe Academy of Management Journal, Vol. 36, No. 3. (Jun., 1993), pp. 471-501.Stable URL:

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Knowledge of the Firm, Combinative Capabilities, and the Replication of TechnologyBruce Kogut; Udo ZanderOrganization Science, Vol. 3, No. 3, Focused Issue: Management of Technology. (Aug., 1992), pp.383-397.Stable URL:

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What Firms Do? Coordination, Identity, and LearningBruce Kogut; Udo ZanderOrganization Science, Vol. 7, No. 5. (Sep. - Oct., 1996), pp. 502-518.Stable URL:

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Dynamics of Interorganizational Attachments: Auditor-Client RelationshipsDaniel A. Levinthal; Mark FichmanAdministrative Science Quarterly, Vol. 33, No. 3. (Sep., 1988), pp. 345-369.Stable URL:

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Social Resources and Strength of Ties: Structural Factors in Occupational Status AttainmentNan Lin; Walter M. Ensel; John C. VaughnAmerican Sociological Review, Vol. 46, No. 4. (Aug., 1981), pp. 393-405.Stable URL:

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Corporate Diversification and Organizational Structure: A Resource-Based ViewConstantinos C. Markides; Peter J. WilliamsonThe Academy of Management Journal, Vol. 39, No. 2. (Apr., 1996), pp. 340-367.Stable URL:

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Social Resources and Mobility Outcomes: A Replication and ExtensionPeter V. Marsden; Jeanne S. HurlbertSocial Forces, Vol. 66, No. 4. (Jun., 1988), pp. 1038-1059.Stable URL:

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Interorganizational Linkages and Population Dynamics: Buffering and TransformationalShieldsAnne S. Miner; Terry L. Amburgey; Timothy M. StearnsAdministrative Science Quarterly, Vol. 35, No. 4. (Dec., 1990), pp. 689-713.Stable URL:

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Social Capital, Intellectual Capital, and the Organizational AdvantageJanine Nahapiet; Sumantra GhoshalThe Academy of Management Review, Vol. 23, No. 2. (Apr., 1998), pp. 242-266.Stable URL:

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Global Strategic Linkages and Industry StructureNitin Nohria; Carlos Garcia-PontStrategic Management Journal, Vol. 12, Special Issue: Global Strategy. (Summer, 1991), pp.105-124.Stable URL:

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Diversification Strategy, Profit Performance and the Entropy MeasureKrishna PalepuStrategic Management Journal, Vol. 6, No. 3. (Jul. - Sep., 1985), pp. 239-255.Stable URL:

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The Cornerstones of Competitive Advantage: A Resource-Based ViewMargaret A. PeterafStrategic Management Journal, Vol. 14, No. 3. (Mar., 1993), pp. 179-191.Stable URL:

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A Status-Based Model of Market CompetitionJoel M. PodolnyThe American Journal of Sociology, Vol. 98, No. 4. (Jan., 1993), pp. 829-872.Stable URL:

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Network Forms of OrganizationJoel M. Podolny; Karen L. PageAnnual Review of Sociology, Vol. 24. (1998), pp. 57-76.Stable URL:

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Resources and Relationships: Social Networks and Mobility in the WorkplaceJoel M. Podolny; James N. BaronAmerican Sociological Review, Vol. 62, No. 5. (Oct., 1997), pp. 673-693.Stable URL:

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Social Capital: Its Origins and Applications in Modern SociologyAlejandro PortesAnnual Review of Sociology, Vol. 24. (1998), pp. 1-24.Stable URL:

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Embeddedness and Immigration: Notes on the Social Determinants of Economic ActionAlejandro Portes; Julia SensenbrennerThe American Journal of Sociology, Vol. 98, No. 6. (May, 1993), pp. 1320-1350.Stable URL:

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The Dominant Logic: A New Linkage between Diversity and PerformanceC. K. Prahalad; Richard A. BettisStrategic Management Journal, Vol. 7, No. 6. (Nov. - Dec., 1986), pp. 485-501.Stable URL:

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Manufacturing-Based Relatedness, Synergy, and CoordinationCaron H. St. John; Jeffrey S. HarrisonStrategic Management Journal, Vol. 20, No. 2. (Feb., 1999), pp. 129-145.Stable URL:

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Network Positions and Propensities to Collaborate: An Investigation of Strategic AllianceFormation in a High-Technology IndustryToby E. StuartAdministrative Science Quarterly, Vol. 43, No. 3. (Sep., 1998), pp. 668-698.Stable URL:

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Exploring Internal Stickiness: Impediments to the Transfer of Best Practice Within the FirmGabriel SzulanskiStrategic Management Journal, Vol. 17, Special Issue: Knowledge and the Firm. (Winter, 1996), pp.27-43.Stable URL:

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Social Capital and Value Creation: The Role of Intrafirm NetworksWenpin Tsai; Sumantra GhoshalThe Academy of Management Journal, Vol. 41, No. 4. (Aug., 1998), pp. 464-476.Stable URL:

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The Sources and Consequences of Embeddedness for the Economic Performance ofOrganizations: The Network EffectBrian UzziAmerican Sociological Review, Vol. 61, No. 4. (Aug., 1996), pp. 674-698.Stable URL:

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The Dynamics of Interorganizational CoordinationAndrew H. Van de Ven; Gordon WalkerAdministrative Science Quarterly, Vol. 29, No. 4. (Dec., 1984), pp. 598-621.Stable URL:

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"Sticky Information" and the Locus of Problem Solving: Implications for InnovationEric von HippelManagement Science, Vol. 40, No. 4. (Apr., 1994), pp. 429-439.Stable URL:

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Social Capital, Structural Holes and the Formation of an Industry NetworkGordon Walker; Bruce Kogut; Weijian ShanOrganization Science, Vol. 8, No. 2. (Mar. - Apr., 1997), pp. 109-125.Stable URL:

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