Introduction The task of deciding when and how to innovate is not an easy one. Consider the following managerial quandaries: . A CIO has joined a firm that lags in the adoption of emerging information technologies. He wonders: just how innovative should this firm be going forward, and what can be done to position it to be more willing and able to assume the challenge of early adoption? . A VP of marketing resides in a firm that generally leads in IT innovation, and must decide whether to endorse the immediate adoption of a particular innovation with major implications for marketing strategy. She wonders: are her firm's needs in this area and "readiness" to adopt sufficient to justify taking the lead with this specific innovation? If so, how should the assimilation process be managed? . A product manager must design a deployment strategy for an innovative software development tool. He wonders: how fast can this technology diffu

This paper investigates the outcomes and durations of strategic alliances among competing firms, using alliance outcomes as indicators of learning by partner firms. We show that alliance outcomes vary systematically across link and scale alliances. Link alliances are interfirm partnerships to which partners contribute different capabilities, while scale alliances are partnerships to which partners contribute similar capabilities. We find that partners are more likely to reorganize or take over link alliances than scale alliances. By contrast, scale alliances are more likely to continue without material changes. The two types of alliances are equally likely to shut down, at similar ages. These results support the view that link alliances lead to greater levels of learning and capability acquisition between the partners than do scale alliances. Copyright © 2000 John Wiley & Sons, Ltd. This study investigates the outcomes and durations of strategic alliances among competing firms, using alliance outcomes as indicators of learning by partner firms. We define strategic alliances as arrangements between two or more

On behalf of:

Acknowledgements: The development of NeBIC theory has benefited greatly from the detailed guidance of the editor, associate editor, and reviewers. I also wish to thank research associate Michael Williams and Arvin Sayam for their valuable assistance and healthy debate in maturing the ideas presented here. NeBIC: A Dynamic Capabilities Theory for Assessing Net-enablement We propose the Net-enabled Business Innovation Cycle as an applied dynamic capabilities theory for measuring, predicting, and understanding a firm’s ability to create customer value through the business use of digital networks. The theory incorporates both a variance and process view of netenabled business innovation. It identifies four sequenced constructs: Choosing new IT, Matching with Economic Opportunities, Executing Business Innovation for Growth, and Assessing Customer Value, along with the processes and events that inter-relate them as a cycle. The sequence of these theorized relationships for net-enablement asserts that choosing IT precedes rather than aligns with corporate strategy. The theory offers a logically consistent and falsifiable basis for grounding research programs on metrics of net-enabled business innovation. NeBIC Page 1 1

Network Organization Survey ii This article reviews the literature on network organizations and interprets explanations for its behaviors in terms of established analytical principles. Tools from computer science, economics, and sociology give three markedly different interpretations of its core attributes but they also settle on a handful of common themes. The proposed benefits are a clarification of what it means for an organization to be network structured, a few insights into its origins, and a suggestion of where the boundaries to some of its different forms might lie. ACKNOWLEDGMENTS A helpful network of outstanding reviewers is responsible for many of the ideas appearing in this article. People who deserve special thanks for assistance on various drafts include Yaneer

In recent years, we have witnessed remarkable growth in various forms of co-operation among organisations. There has been a considerable increase in inter-organizational alliances during the 1980s, particularly in high-technology industries (Haagedoorn 1993; 1995; Hergert and Morris 1988; Mowery 1988). Within the US biotechnology industry, for example, firms without any formal cooperative ties to other firms have become increasingly rare, while the connectivity of firms within the industry has increased y significantly (Powell et al. 1996). In the hospital systems software industry, inter-firm co-operation was unusual up until 1970, increased slightly in the 1,970s, but showed significant grow th in the 1980s and 1990s (Mitchell and Singh 1996). A similar pattern can be detected for the car industry. According to Helper (1991), beginning 'm the 1980s US car manufacturers have been reducing their degree of vertical integration and have increasingly relied on longer-term contracts with a limited number of tightly linked suppliers. Many European ear companies also adopted this strategy at around the same time (Altmann and Sauer 1989; Morris and Imrie 1991; Turnbull et al. 1989). In other industries inter-organizational co-operation has been a more longstanding practice. In construction, for example, consortia and enduring relationships are wellentrenched forms of organizing large projects (Eccles 1981). In the US film industry, after World War II progressively outsourced production of feature films while retaining finance and distribution (Robins 1993); therefore for some time now, persistent patterns of contracting are related less to format organisations such as the studios, but crystallize out of relatively stable networks of producers, directors, cinematographers, actors, and musicians (Faulkner and Anderson 1987). Regional industrial

and Abbie Smith and workshop participants at the University of Chicago. MANAGERIAL ACTIONS, STOCK RETURNS, AND EARNINGS: THE CASE OF

This paper proposes and tests a model of IJV learning and performance that segments absorptive capacity into the three components originally proposed by Cohen and Levinthal (1990). First, trust between an IJV’s parents and the IJV’s relative absorptive capacity with its foreign parent are suggested to influence its ability to understand new knowledge held by foreign parents. Second, an IJV’s learning structures and processes are proposed to influence its ability to assimilate new knowledge from those parents. Third, the IJV’s strategy and training competence are suggested to shape its ability to apply the assimilated knowledge. Revisiting the Hungarian IJVs studied by Lyles and Salk (1996) 3 years later, we find support for the knowledge understanding and application predictions, and partial support for the knowledge assimilation prediction. Unexpectedly, our results suggest that trust and management support from foreign parents are associated with IJV performance but not learning. Our model and results offer a new perspective on IJV learning and performance as well as initial insights into how those relationships change over time. Copyright © 2001 John Wiley & Sons, Ltd. Over the past two decades there has been a surge in the number of international joint ventures (IJVs)

The behavioral theory of the firm rests on empirical observation of economic behavior in organizations, and was motivated by the 'disconnect ' between that observation and prevailing economic theory. We believe that there is a comparable tension between reality and theory with regard to the persistent, systematic relationships between organizations. Observation belies the traditional view that organizations are distinct and autonomous units of action. Instead, it appears that they are very often embedded in organizational groups comprised of close, robust and multidimensional ties that blur hierarchical boundaries (Granovetter 1994; Gulati & Gargiulo 1999; Powell & Smith-Doerr 1994). These groups, which we call interfirms, demand analysis. Why do they exist at all? What processes cause them to take the forms that they do? Under what circumstances are they more or less useful for their constituents? In this chapter we offer answers to these questions. Our approach to explaining interfirms builds on earlier arguments regarding the existence, structure and behavior of firms. First, we explain the existence of interfirms as a response to the transaction costs that emerge under conditions of bounded rationality. This argument locates the interfirm within broader justifications for institutions, which build on Coase’s ([1937] 1988) transaction cost explanation for the firm. Next, we offer an evolutionary process model of the emergence of one type of interfirm, the network organization – a production

Today, many knowledge-based technology applications form a business ecosystem: a set of complex products and services made by multiple firms in which no firm is dominant. For this paper the emerging radio frequency ID (RFID) ecosystem was built based on firms ’ alliance announcements, and propositions around the behavior of large, multi-line technology firms in this network were analyzed. The RFID network is used to empirically show that absorptive capacity, and exploration vs. exploitation theories may explain some behavior of large firms. Specifically, a propensity to form alliances in general makes it more likely large firms will join the RFID ecosystem, and more exploratory firms join earlier. Greater availability of slack resources also leads to the formation of more alliances in the network. The ecosystem perspective and these results may influence alliance decisions of firms entering into high cost technological innovations.