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Strategic Management Society Annual International Conference, Madrid

Please join us for the panel "Alliance Portfolios, Networks, and Innovation" (Session 202). This showcase panel will present novel conceptual as well as empirical research on the topic of alliance portfolios, networks, and innovation.

Panelists:

Ronald Burt, University of Chicago

Dovev Lavie, Technion-Israel Institute of Technology

Frank T. Rothaermel, Georgia Institute of Technology

Corey Phelps, McGill University

Monday, 22 September 2014, 14:45 – 16:00

Room: Roma 2

Some behavioral contingencies in network models of innovation (Ron Burt)

There is substantial evidence on innovation and top-line growth associated with brokerage

networks (networks that bridge the structural holes in organizations and markets). This talk is

about three significant behavioral contingencies that greatly increase the returns to brokerage.

First, collateral brokerage refers to behavior toward affiliates: innovation and growth is richer

around hub brokers who facilitate the brokerage of others (versus brokers who insist on

controlling the situation around them). Second, successful brokerage involves both a production

component (well-studied) and an audience component (largely ignored). Would-be brokers with

good ideas have to be accepted by people with whom they wish to innovate. The status and

reputation of a would-be broker can be critical to achievement, with reputation providing the less

static facilitation. Third, successful brokerage is path dependent. Achievement is associated on

average with networks that span structural holes, but it matters how the network was built.

Punctuated brokerage refers to brokers cycling in time between periods of scanning across

groups and periods of immersing themselves within a group. Constant access to structural holes

is not associated with achievement.

Performance implications of alliance portfolios (Dovev Lavie)

This research underscores the role of network resources in driving value creation and

appropriation in alliances among firms operating in technology-intensive industries. His work

reveals how partners' complementary resources create value whereas their relative bargaining

power undermines it, especially when engaging co-opetitors. Still, he will show that a firm can

enhance value appropriation by introducing competing partners to its alliance portfolio. Lavie

will also discuss research demonstrating that interorganizational differences, such as crossnational

differences between the firm and its partners, shape firm performance by undermining

relational mechanisms. Yet, firms can leverage their partnering experience and alternative

governance modes to overcome such differences. In addition, selecting alliance partners that

adopt similar routines in conducting their operations supports the development of relational,

which in turn contribute to value creation in alliances. Finally, Lavie will discuss research that

suggests that collaboration generates an inverted U-shaped effect on knowledge creation and

application, with internal resources mitigating this effect. Overall, his work complements

traditional research on structural and relational embeddedness by revealing the implications of

partners' attributes.

Microfoundations of innovation: Intra-firm individual-level networks and firm-level

performance heterogeneity (Frank T. Rothaermel)

Since Schumpeter (1942) we have known that innovation is a vehicle of economic growth

and a potential source of firm-level performance heterogeneity. We build on recent work on the

microfoundations of capability-development and study intra-firm knowledge networks and the

individual level and their effect on firm-level performance heterogeneity. In particular, we look

at intrafirm knowledge networks emerging through individual collaboration to identify actors

who affect firm-level innovation. We study over 100 pharmaceutical companies over multiple

decades in their attempt to innovate more broadly, but also within the new field of

biotechnology.

A longitudinal study of the combined influence of inter- and intra-organizational networks

on organizational innovation performance (Corey Phelps)

Whereas prior research has investigated the independent influence of interorganizational and

intraorganizational networks on organizational innovation, we study how a firm's internal and

external networks jointly influence its innovation performance. We argue that while a firm's

interorganizational network creates opportunity for knowledge absorption, its intraorganizational

network determines its ability to assimilate, diffuse and recombine this externally-derived

knowledge. We propose that firm innovation is enhanced when interorganizational collaboration

is complemented by an efficient intraorganizational network structure. We examine this

proposition in a longitudinal study of the external research partnerships and internal inventor

networks of 50 large medical device firms. This study contributes to the literature on networks

and innovation by exploring the combined influence of inter- and intraorganizational networks

and adds to our understanding of the microfoundations of organizational absorptive capacity by

examining how interpersonal networks within organizations condition their ability to learn from

external partners.

Frank T. Rothaermel

The Russell and Nancy McDonough Chair

Professor & Sloan Industry Studies Fellow

Area Coordinator, Strategic Management

Scheller College of Business

Georgia Institute of Technology

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