Cohesive subgroup formation : enabling and constraining effects of social capital in strategic technology alliance networks

In this paper we will examine the role of embeddedness and social capital in the process of cohesive subgroup formation in strategic technology alliance networks. More in particular, we will investigate the social mechanisms that enable and enforce cohesive subgroup formation. We will argue that the enabling effects of social capital in the beginning of the group formation process can turn into paralyzing effects as the block formation process progresses. Through the formation of subsequent ties, firms in social systems tend to rely heavily on their direct and indirect contacts in forming new partnerships. This so-called local search enables firms to create trustworthy and preferential relations. Over time, those relations tend to develop into strong ties, as firms rely on the same partners by replicating their existing ties. This enabling effect of social capital at the group level can, however, turn into a paralyzing effect as actors become locked-in, as they only rely on partners in their closed social system. Then searching for or switching to partners outside of the cohesive subgroup is hard to rationalize, in particular when trustworthy partners are already available in this system. The firms in cohesive subgroups tend to become more similar over time as a result of contagion and replication of their existing ties. This so-called phenomenon of overembeddedness induced by the paralyzing effects of social capital at the group level can lead to decreasing opportunities for learning and innovation for blockmembers involved

Strategic alliance networks and innovation : a deterministic and voluntaristic view combined

Over the past decades we have witnessed a tremendous growth in the number of strategic technology alliances and a growing importance of interfirm collaboration in the high-tech sectors. The literature on these topics has grown accordingly. In this respect, our paper serves two aims. One is to provide an overview of the consensus on key issues in this vast body of literature. Second is to identify some major gaps in this literature that may inform future research. In serving these aims, we first discuss the dominant structuralist perspective that stresses the role of embeddedness, but which also reflects a deterministic stance as if firms are subject to an exogenous structure. In contrast, we also explore a more voluntaristic view of how firms may possibly shape their network in view of achieving their strategic aims. This view also seems better able to capture change and network dynamics, an issue that has been largely ignored by the structuralist view