Learning and Governance in Inter-Firm Relations

This article connects theory of learning with theory of governance, in the context of inter-firm relations.It recognizes fundamental criticism of transaction cost economics (TCE), but preserves elements from that theory.Two kinds of relational risk are identified: hold-up and spillover risk.For the governance of relations, i.e. the control of relational risk, the article presents a set of instruments that includes trust, next to instruments adopted and adapted from TCE.It also includes roles for gobetweens.Some references to empirical evidence are included.Inter-firm alliances;learning;transaction costs;governance

Learning to Trust

Trust is full of puzzle and paradox.Trust is both rational and emotional. Trust can go beyond calculative self-interest, but has its limits.People may want to trust, while they may also feel threatened by it.If trust is not in place prior to a relationship, on the basis of institutions, prior experience, or reputation, it has to be built up, in specific relations.For that one needs to learn, in the sense of building empathy, and perhaps a certain degree of identification.In an attempt at a better understanding of the puzzles and processes of trust, this chapter applies the perspective of 'embodied cognition', and insights from mental 'framing' and decision heuristics from social psychology.learning;trust;institutions

Stages Of Discovery And Entrepreneurship

In an attempt at a systematic theory of entrepreneurship, this paper connects various literatures, from economics and business. In economics, there are many notions of entrepreneurship, some of which seem to contradict each other. For example, there are notions of entrepreneurship as an equilibrating and as a disequilibrating force. In this paper, these differences are connected with the issue of exploitation and exploration from the business literature. The question is how one can explore while maintaining exploitation. For this, a cycle of discovery has been proposed, with stages of equilibration and disequilibration which build on each other, in process where exploitation leads to exploration. It is proposed that different notions of entrepreneurship can be associated with different stages of that cycle. In this way, different types of entrepreneurship complement each other in an ongoing process of discovery.entrepreneurship;innovation;organizational learning;discovery

Innovation, Learning and Cluster Dynamics

This chapter offers a theory and an analytical framework for the analysis of cluster dynamics, i.e. the innovative performance and evolution of clusters.It develops three types of embedding: institutional embedding, structural embedding (network structure), and relational embedding (type and strength of ties).The analysis is conducted from a perspective of both competence (learning) arising from relations and governance of relational risk, which includes risk of lock-in and risk of spillover.A basic proposition is that innovative clusters face the challenge of combining exploration and exploitation.Hypotheses are specified concerning differences between networks for exploration and exploitation, and concerning combinations and transitions between them.Arguments are presented that in some important respects go against the thesis of the strength of weak ties .Some empirical evidence is presented from recent studies.innovation;organizational learning;clusters;industrial districts;networks

A Balanced Theory of Sourcing, Collaboration and Networks

In a synthesis of recent advances, this article gives a fresh, balanced theory of inter-organizational relations. It integrates competence and governance perspectives. It considers the choice between mergers/acquisitions and alliances. It offers a toolbox of instruments to govern relational risk, and the contingencies for their selection. Relationships can last too long. Therefore, the article also looks at how to end relationships. Beyond dyads of collaborating firms, it includes effects of network structure and position.corporate governance;inter-organizational relations;organizational behavior;inter-firm alliances;collaboration

Entrepreneurial Roles Along a Cycle of Discovery

The literature on entrepreneurship recognizes a variety of entrepreneurial roles, and the question arises what roles are played when and by whom.In this article, roles are attributed to different stages of innovation and organizational development.A central theme is the relation between discontinuity, in radical innovation (exploration), and continuity, in application, diffusion and adaptation (exploitation).Use is made of a concept of a 'cycle of discovery', which seeks to explain how exploration leads on to exploitation, and how exploitation may yield exploration, in a step-by-step development towards radical innovation.Parallel to this there are processes of organisational development.entrepreneurship;innovation;discovery;organizational learning

Organisational Learning And Multinational Strategy

Increasingly, it has been recognised that in their process of internationalisation multinationals may learn. They may take a strategy not only of exploitation, to leverage existing assets, competencies and products, built up in their home countries, but also, and perhaps even primarily, of exploration, to profit from diversity of host countries to develop new products and competencies. The question is how they can manage and integrate resulting diversity. This article analyses that issue, using a theory of organisational learning. It employs a ‘cycle of discovery’ that seeks to resolve the problem of combining exploitation and exploration. That problem arises more widely, apart from internationalisation, and solutions to it may yield solutions for problems of internationalisation.globalization;innovation;organizational learning;international business;multinational corporations

Social Capital, Institutions and Trust

This paper analyzes the relations between social capital, institutions and trust.These concepts are full of ambiguity and confusion.This paper attempts to dissolve some of the confusion, by distinguishing trust and control, and analyzing institutional and relational conditions of trust.It presents a tool for the analysis of the foundations of trust and a diagnosis of its strength and viability.social capital;institutions;trust;economic systems

Cognitive Distance in and Between COP’s and Firms: Where do Exploitation and Exploration take Place, and How are they Connected?

This paper contributes to the analysis of where and how both exploitation and exploration may take place inside and between communities and organizations. It connects with the discussion of differences between communities of practice and epistemic communities. The analysis allows for differences in cognition within communities of practice (‘cognitive distance’). Such distance yields potential novelty but creates problems in utilizing that potential. In communities of practice and epistemic communities different trade-offs are made between the advantages and disadvantages of cognitive distance. Communities of practice are more oriented at exploitation, at relatively small cognitive distance. Exploration may take place in epistemic communities, with larger internal cognitive distance, but may also arise from interaction between different communities of practice, utilizing the distance between them. Organizations serve to provide the basis for the governance of such interaction. This, however, does limit the cognitive distance, and hence exploration potential, within an organization. For more radical exploration, interaction is needed between organizations, at the price of greater efforts to set up and govern collaboration. Next to communities of practice, epistemic communities and organizations, the analysis also includes communities of professionals across different organizations. They also have a role to play in a wider system of organizational forms for exploitation and exploration.innovation;exploration and exploitation;communities of practice