Tutorial 3: Network Advantage 2 Flashcards
(21 cards)
Determine weather your firm is appealing enough to partner with other firms
- Autonomy
- Attractiveness
Definition: autonomy
Refers to how much independence a firm has to make its own decisions about how to configure exchange flows within the industry.
- uniqueness
- brokerage position
Definition: attractiveness
Refers to how sought after the firm is as a partner based on its overall status, its clearly formulated vision for an alliance portfolio or its established track record as a good partner.
- high status
- clear vision
Trigger events to agree on:
1- alliance completion: reached objectives
2- alliance performance failure: do not reach objectives
3- collaborative deadlock: exit clauses if partner cannot agree in important decisions
4- mechanism of property split after termination: ownership of physical and intellectual assets
Structural embeddedness
Characteristics of the relational structure (dense/sparse networks)
Ties between actors facilitating the diffusion of Norms across the network.
(Norm at network level)
Relational embeddedness
Characteristics of relationships (weak or strong ties)
Tie strength based on a combination of the amount of time, the emotional intensity, the intimacy and the reciprocal services which characterise a tie. (Trust at dyadic level)
Strong ties advantages
- high quality information
- tacit knowledge
- social control mechanism (trust, mutual gain and reciprocity)
Weak ties advantage
- novel information
Redundant governance mechanism
Structural embeddedness such as dense network as well as strong ties (relational embeddedness) serve as a trust-based governance mechanism in inter firm alliance. Both are substitutes for one another.
Structural holes
Position between other actors who are not directly linked together.
-> enjoy efficiency and control benefits
Dense networks
Develop trust and cooperation through collective monitoring and sanctioning but often provide redundant information from multiple sources.
Sparse networks
Provide a firm with the ability to efficiently obtain and broker information.
- > are strategies designed to explore or exploit ?
- > diverging information requirements for each strategy
Dynamic environment
- exploitation
- sparse networks (dense ones are a liability)
- weak ties
Stable environments
- exploitation
- dense networks
- strong ties
Value creation mechanism
Enhance the focal firm’s ability to generate value from its relationship with partners. Produce relational rents that cannot be generated independently by individual participants.
Value appropriation mechanism
Do not create new value but determine the relative share of relational rents that the focal firm can appropriate.
Bargaining power
The ability to favourably change the terms of agreements, to obtain accommodations from partners and to influence the outcome of négociations.
Bilateral competition
The extent to which partners can be considered as competitors of the focal firm.
Multilateral competition
The extent to which partners are considered direct competitors of each other.
Appropriation vs creation (prominent partners)
Dominant partners that contribute to joint value creation may also be well positioned to appropriate a larger share of this value at the focal firm’s expense
Goodwill
Willingness to consider a partners interests
