| Strategic Domains and Network Building: Using Flag Concepts to Configure Value Creation Systems |
| | Ramirez, Rafael | École des Hautes Etudes Commerciales | fvasconcelos@mail.cfar.com | (331) 39677304 |
| | Vasconcelos, Flavio C. | Center for Entrepreneurial Leadership | fvasconcelos@mail.cfar.com | (215)3828500 |
| | A major problem in strategy implementation is attracting people’s attention and directing collective energy towards the pursuit of a strategic goal. Some organizations choose to do so by selecting competitive targets and aiming at beating these competitors. However, other organizations use a different approach defining a domain of strategic focus, towards which activities are concentrated and learning processes directed. Strategic domains are not equivalent to the organization's industry sectors, or to its current business environment. Instead, strategic domains manifest the organization's value propositions, usually in the form of "flag concepts". These domains extend beyond the organization's borders, and generate a network of actors who are included in its co-production of value. Domains refocus strategy on how organization get customers and competence resources to relate to each other. Domains are not primarily concerned with positioning in relation to competitors and/or established industry sectors.
This article examines the concept of strategic domains and its implications for strategy making. It grounds its analyses on two cases: that of The Document Company Xerox and that of the "Groupement d'Intéret Economique - Cartes Bancaires" in France.
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| | Keywords: Domains; Networks; Values |
| Spillovers and the Advent of the Network Economy |
| | McGrath, Brian | U. College Dublin | brian.mcgrath@it-tallaght.com | +353-1-288-9150 |
| | McGrath, Rita Gunther | Columbia U. | rgmcgrath@aol.com | (609) 275-6048 |
| | The network economy, in which firm boundaries are permeable, information flows rapidly and inexpensively and interdependencies are heightened throws the underpinnings of conventional spillover theory into disarray. Connectivity between actors, rather than their possession of rare and inimitable assets, drives value. Premises regarding benefits and costs of spillovers no longer hold. This creates the opportunity to develop a more solid conceptual foundation for spillovers as part of a theory of entrepreneurial success in network and information-based contexts.
We draw a distinction between voluntary and involuntary spillovers, and note that the conventional characterization of spillovers as involuntary and negative do not hold. We outline how positive return and network externality effects offer different implications for the strategic management of knowledge than the conventional characterization - most notably by suggesting when voluntary promulgation of spillover by the innovative organization will generate returns. We identify four distinct strategies for the management of spillovers - those of calculating benevolence, capture of returns through evolutionary development, hyper-innovation and aggressive protectionism. These are appropriate, we argue, in different contexts. Contexts are influenced by whether the arena in question is a traditional or network oriented one, and whether the ability of the organization to control the spillover is strong or weak.
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| | Keywords: Spillovers; Knowledge; Imitation |
| On the Origin of Network Structure: Understanding the evolution of strategic networks |
| | Koka, Balaji R. | U. of Pittsburgh | koka@vms.cis.pitt.edu | 412 648 1646 |
| | Madhavan, Ravindranath | U. of Illinois, Urbana-Champaign | rmadhava@uiuc.edu | 217-333-3322 |
| | Prescott, John E. | U. of Pittsburgh | prescott@katz.business.pitt.edu | 412 648 1573 |
| | Strategic interfirm networks represent the complex interplay of stability and change as, over time, new ties are created, some old ties are dissolved, some ties become stronger, and some others become weaker. We provide an evolutionary framework for better understanding how strategic networks change over time. Moving away from a purely deterministic conception of structure, we posit a model that pays greater attention to the interaction of network structure, strategic action, and overall context. While institutional, cultural, macro-structural, and macro-economic/technological forces provide the context for network evolution, strategic motivation, ability, and opportunity interact in the domain of network strategy and entrepreneurship to shape observable outcomes in network structure and performance. We identify four evolutionary “primitives”—tie creation, dissolution, strengthening and weakening—as capable of comprehensively describing network change. The evolutionary model of network change is a first step toward more sophisticated, historically grounded investigations into the dynamics of strategic networks.
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| | Keywords: strategic networks, ; network evolution; interfirm networks |
| Don't Go It Alone: Alliance Networks and Startups' Performance in Canadian Biotechnology |
| | Baum, Joel A. C. | U. of Toronto | baum@fmgmt.utoronto.ca | (416) 978 4914 |
| | Calabrese, Tony | U. of Toronto | calabres@chass.utoronto.ca | (416) 978 6579 |
| | Silverman, Brian S. | Harvard U. | bsilverman@hbs.edu | (617) 495-6729 |
| | We investigate the impact of variation in startups' alliance networks on their early performance. We hypothesize that startups can enhance their early performance by 1) establishing alliances, 2) configuring them into an efficient network that provides access to diverse information and capabilities with minimum costs of redundancy, conflict, and complexity, and 3) judiciously allying with potential rivals that provide more opportunity for learning and less risk of intra-alliance rivalry. An analysis of Canadian biotech startups' performance provides broad support for our hypotheses, especially as they relate to innovative performance. Overall, our findings show how variation in startups' alliance networks produces significant differences in their early performance, contributing directly to an explanation of how and why age and size affect firm performance. We discuss some clear implications for managers of startups. |
| | Keywords: Startup Performance; Strategic Alliances; Canadian Biotechnology |
| The System of Business Enterprises as a Complex Dynamic Network of Resources and Competencies |
| | Dagino, Giovanni Battista | London Business School | GBattista@lbs.ac.uk | (0171) 262-5050 |
| | The recent shift in the attention within research into the firm, i.e., from the single firm to the firms (Caselli, 1990; Lorenzoni, 1990), has
dramatically uncovered the lacking of comprehensive frameworks in the analysis of aggregates of firms.
This article contributes to fill this void by introducing and modeling the concept of System of Business Enterprises (SBE), intended
both as a complex and dynamic network of resources and competencies and a distinct unit in strategy analysis.
SBE concept is articulated at two different methodological levels: (1) a descriptive level, aimed at combining network- and resource-based
perspectives in a strategic network model of resources and competencies; (2) a functional level, where we discuss six strategic capabilities
(i.e., search, selection, learning, knowledge, institutionalization, and quasi-isomorphism) which are at the very basis of SBE's functioning
in a superior competitive way. |
| | Keywords: complex network; resources; aggregate of firms |