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

Human Nature in the Adaptation of Trust

This chapter pleads for more inspiration from human nature, in agent-based modeling.As an illustration of an effort in that direction, it summarizes and discusses an agentbased model of the build-up and adaptation of trust between multiple producers and suppliers.The central question is whether, and under what conditions, trust and loyalty are viable in markets.While the model incorporates some well known behavioural phenomena from the trust literature, more extended modeling of human nature is called for.The chapter explores a line of further research on the basis of notions of mental framing and frame switching on the basis of relational signaling, derived from social psychology.trust;transaction costs;buyer-supplier relationships;social psychology

Beyond Penrose: A Cognitive Theory of the Firm

This paper uses a cognitive theory of firms and organizations, with a focus on learning and innovation.Here, cognition is a wide notion, including value judgments and corresponding feelings and emotions.This paper focuses on the relation between that cognitive theory and Penrose's theory of the growth of the firm.As in Penrose's work, the focus is on learning, rather than on efficient utilization of resources or appropriation of returns from them.Also as in Penrose, the underlying view of cognition is a constructivist one, according to which people with different experience view the world differently.So far, the paper is consistent with Penrose.However, it also adopts and further develops some of the criticism of her views, concerning the role of other human resources than managers in organizational learning, problems of conflicts of interest and governance within the firm, dynamic capabilities for developing new capabilities, and, above all, the alternative of collaboration between firms, for learning and innovation, in the combination of capabilities between rather than within the firm.In particular, it argues that, in contrast with Penrose, there are limits to firm size.theory of the firm;Penrose;knowledge;learning;innovation;dynamic capabilities;firm size;growth of the firm

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