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Article
Publication date: 24 March 2020

Courage Simon Kofi Dogbe, Hongyun Tian, Wisdom Wise Kwabla Pomegbe, Sampson Ato Sarsah and Charles Oduro Acheampong Otoo

The purpose of this study was to identify if network embeddedness and innovation performance relationship, which has been largely studied in multinational enterprises…

Abstract

Purpose

The purpose of this study was to identify if network embeddedness and innovation performance relationship, which has been largely studied in multinational enterprises (MNEs) and large corporations, was also applicable in the context of small and medium-sized enterprises (SMEs). Secondly, the authors also sought to identify the moderating role of innovation openness in the relationship between network embeddedness and SMEs' innovation performance.

Design/methodology/approach

Empirical analysis was based on 388 SMEs in Ghana. Various validity and reliability checks were conducted before the presentation of the actual analysis, which was conducted using the structural equation modeling in Amos (v.23).

Findings

Findings revealed that, in the context of SMEs, network embeddedness had significant positive effect on innovation performance. The authors further identified that SMEs with both high levels of network embeddedness and innovation openness had a much higher performance in their innovation, compared to SMEs that relied solely on network embeddedness.

Research limitations/implications

The current study found innovation openness to further strengthen the relationship between network embeddedness and SMEs' innovation performance. The relationship between network embedded and SME's innovation could, however, be mediated by knowledge transfer mechanisms, so future studies should pay particular attention to the mediating mechanisms.

Practical implications

Management of SMEs is advised to develop conducive organizational structures, such as trust, openness to collaboration and so on, for effective innovative knowledge transfer and transformation.

Originality/value

Past research studies on network embeddedness and innovation performance have dominantly resided in MNE and large corporations. This current study extends the body of knowledge by extending the network embeddedness and innovation performance research studies to SME context.

Details

Journal of Strategy and Management, vol. 13 no. 2
Type: Research Article
ISSN: 1755-425X

Keywords

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Article
Publication date: 20 April 2018

Haiyuan Zhao and Xiaobao Peng

This paper aims to draw on the network perspective of organizational innovation to present an argument on how a subsidiary should select innovation behavior.

Abstract

Purpose

This paper aims to draw on the network perspective of organizational innovation to present an argument on how a subsidiary should select innovation behavior.

Design/methodology/approach

In this framework, the paper analyzes middle- and high-level managers of subsidiaries from various industries located in the Chinese Mainland.

Findings

The results suggest the following ideas: internal embeddedness is positively related to exploitation innovation, external embeddedness is inverted-U related to exploration innovation, the availability of alternatives positively moderates the main effects, whereas restraint in the use of power negatively moderates them.

Research limitations/implications

The current study has a few limitations that provide meaningful research directions for future investigations. First, it only considers the industry and ownership as control variables. Second, this study was conducted in the Chinese context.

Practical implications

The analysis of the relationship between embeddedness and innovation behavior also shows that focal subsidiary must dynamically adjust the way of embeddedness on the basis of its strategy, and it can reasonable leverage strategic assets for exploitation innovation or exploration innovation. From the perspective of headquarters, establishing deep embeddedness with a subsidiary and giving it indispensable support are important to promote that subsidiary’s exploitation innovation.

Social implications

The focal subsidiary should establish relationships with more alternative partners and develop relationships with power-advantaged partners through strategies such as a long-term contract, establishing an R&D alliance and entering a joint venture. Besides this, more powerful partners in the internal network should adopt various power usage strategies to promote focal subsidiary exploitation innovation and more powerful partners in the external network should show restraint in the use of power toward any subsidiary in an over-embedded situation. The result shows environment dynamism affects subsidiary exploration innovation more deeply than exploitation innovation. Consequently, managers should recognize the importance of dynamic adaptation to environmental changes and adjust their firms’ innovation behavior accordingly, especially when they are implementing an exploration innovation strategy.

Originality/value

The extent of embeddedness in an innovation network shapes the subsidiary innovation behavior, and this effect is moderated by power. The focal subsidiary should dynamically and strategically adjust its innovation behavior considering various its type and level of embeddedness.

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Article
Publication date: 6 February 2019

Artur Swierczek

The purpose of this paper is to investigate whether the manufacturer that occupies the central position in the triadic supply chain is capable of enhancing relationships…

Abstract

Purpose

The purpose of this paper is to investigate whether the manufacturer that occupies the central position in the triadic supply chain is capable of enhancing relationships within both dyads to produce the network rent and extra profit shared among all supply chain actors.

Design/methodology/approach

The paper opted for an exploratory study using a survey of triads forming supply chains. To reveal the capability of yielding the network rent in the examined triads, multiple regression analysis with Interaction effects was used. Having confirmed the existence of supernormal profit, the partial least square path model was developed to investigate the effects of manufacturer structural embeddedness on relational embeddedness and the resulting impact on the network rent.

Findings

The obtained findings show that manufacturer structural embeddedness has a direct and positive effect on relational embeddedness and relational embeddedness of two dyads (represented as a higher order factor) has a direct and positive effect on the network rent. In addition, relational embeddedness mediates the positive relationship between manufacturer structural embeddedness and network rent, as the null model with no mediation appears to underestimate the direct and positive effect between manufacturer structural embeddedness and the network rent.

Research limitations/implications

The study makes three key contributions. First, it extends the application of both relational and structural embeddedness to grasp the network architecture of the triadic supply chain. Second, the concept of manufacturer structural embeddedness is used to elaborate on the role of the manufacturer in establishing relationships of high quality with the supplier and the customer. In connection to the previous point, the calculated network rent demonstrates that establishing collaborative relationships in triadic supply chains may bring a significant supernormal profit, derived as the outcome of mutual interplay between the relational performances of two dyads.

Practical implications

The study shows that manufacturers intending to use their central position to develop collaborative relationships with both partners, and the supplier and the customer, ought to appreciate the role of social ties embedded in interorganizational networks. The paper also implies that in parallel with using formal contracts as a governance mechanism, the manufacturer centrally positioned in the triadic supply chains ought to deliberately shape relational embeddedness of both dyads. Finally, managers can consider the ways to enhance relational embeddedness in a triad by improving relational embeddedness of a certain dyad.

Originality/value

This study provides a novel framework for studying two basic dimensions of embeddedness (structural and relational) and their impact on the network rent in triadic supply chains that goes beyond the dyadic perspective and incorporates the extended supply chain.

Details

Supply Chain Management: An International Journal, vol. 24 no. 3
Type: Research Article
ISSN: 1359-8546

Keywords

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Article
Publication date: 14 March 2018

Chris Storey, Canan Kocabasoglu-Hillmer, Sinéad Roden and Ko de Ruyter

The complexity of supplier-partner networks in the information technology (IT) sector where large suppliers utilize thousands of authorized partners requires that…

Abstract

Purpose

The complexity of supplier-partner networks in the information technology (IT) sector where large suppliers utilize thousands of authorized partners requires that organizations reconsider their approach to governing and managing the relationships involved. Traditional dyadic approaches to governance are likely to prove inadequate. The purpose of this paper is to investigate the relationship between network governance mechanisms and relationship performance. Specifically, the authors examine the contingent effect of certification of partners and the use of partner communities (as formal and informal mechanisms of network governance, respectively), on complex and embedded networks of relationships.

Design/methodology/approach

A model examining the effect of formal and informal network governance on the relationship between embeddedness (structural and relational) and relationship performance is developed. Data were collected from a sample of partners of leading IT suppliers in the UK and Ireland. Three-way interactions assess the contingent effect of certification and partner communities on the relationship between embeddedness and relational performance.

Findings

Results support the use of a combination of certification and partner communities to strengthen the link between network structure (structural embeddedness) and relational embeddedness, as well as relationship performance. Certification requires the sharing of explicit knowledge with partners whereas partner communities aid the creation and dissemination of more tacit, contextual knowledge. Furthermore, partner communities reinforce positive perceptions of fairness in suppliers’ network management practices, overcoming any perceptions of lock-in or coercive control that certification may suggest.

Practical implications

Certification, despite all its procedural and reputational benefits, damages partner relationships and needs to be supported by partner communities, which themselves show particularly strong benefits in enhancing network relationships.

Originality/value

Despite the emerging prevalence of certification and partner communities in business-to-business relationships, to date there is a paucity of research on their effects on partner relationships and performance. Organizations with an extensive network of similar partners may suffer network overload. This research shows that such organizations can manage their partner network more effectively through network governance mechanisms, thereby addressing the challenge of overload.

Details

International Journal of Operations & Production Management, vol. 38 no. 9
Type: Research Article
ISSN: 0144-3577

Keywords

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Book part
Publication date: 12 November 2010

Phillip C. Nell, Ulf Andersson and Bodo B. Schlegelmilch

Purpose – The purpose of this chapter is to develop a more fine-grained model of the relationship between multinational corporation (MNC) external embeddedness and…

Abstract

Purpose – The purpose of this chapter is to develop a more fine-grained model of the relationship between multinational corporation (MNC) external embeddedness and subsidiary contribution to firm-level competitive advantage.

Methodology/approach – We briefly review previous international management literature and show that the conception of MNC embeddedness in external networks is often simplistic. We develop the concept of the HQ–subsidiary dyad being externally embedded and derive propositions on how this more holistic concept of MNC embeddedness influences subsidiary contribution.

Findings – We argue that subsidiary contribution depends not only on the relational embeddedness dimension of the subsidiary but that there is a complex interplay between several embeddedness dimensions on multiple levels. We suggest that the much emphasized effect of subsidiary relational embeddedness might be contingent on the HQ's own relationships, and the structure of the overall network. We also develop propositions which show that subsidiary relational embeddedness mediates the relationship between overall network structure and subsidiary contribution.

Research limitations – For the sake of theoretical stringency, we keep other influencing factors such as MNC strategy and specific subsidiary mandates as constant.

Originality/value of the chapter – Subsidiaries are an important source of firm-level competitive advantage. Subsidiary resources have also been shown to develop to a large extent in relationships with external actors. Despite this importance, we argue that our understanding of how the MNC is embedded in external networks and how this in turn influences subsidiary contribution is limited. This chapter attempts to make a first step into filling this gap.

Details

Reshaping the Boundaries of the Firm in an Era of Global Interdependence
Type: Book
ISBN: 978-0-85724-088-0

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Book part
Publication date: 27 August 2014

Leonid Bakman and Amalya L. Oliver

The chapter presents a theoretical framework that deals with the basic question of how networks and industries coevolve. We draw upon the structural and relational…

Abstract

The chapter presents a theoretical framework that deals with the basic question of how networks and industries coevolve. We draw upon the structural and relational perspectives of networks to theorize about changes occurring in interfirm networks over time and the coevolutionary linkage of these changes to the industry life cycle. We further extend the widely accepted industry life cycle model by claiming that industry-specific evolutionary patterns impact the structure of the network’s relations, which in turn lead to diversification in the sources of innovation and to variation in the patterns of industrial evolution.

Details

Understanding the Relationship Between Networks and Technology, Creativity and Innovation
Type: Book
ISBN: 978-1-78190-489-3

Keywords

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Article
Publication date: 8 February 2021

Jian Du, Keying Lu and Chao Zhou

Prior studies have argued that multinational firms with dynamic capabilities can reconfigure and upgrade their internal and external resources and adapt to an…

Abstract

Purpose

Prior studies have argued that multinational firms with dynamic capabilities can reconfigure and upgrade their internal and external resources and adapt to an ever-changing competitive global environment. The impact of home country networks exerting on multinational corporations’ (MNCs) dynamic capabilities has been rarely discussed in extant research. This paper aims to explore how two types of home country networks’ relational embeddedness (from domestic firms and foreign firms) affect Chinese MNCs’ dynamic capabilities.

Design/methodology/approach

Several hypotheses were tested by analyzing the survey data from 204 multinational companies in china.

Findings

The results reveal the impact mechanism of the home country network on dynamic capabilities. Embeddedness in domestic networks positively affects embeddedness in the foreign network; embeddedness in foreign firms exerts positive effects on the three dimensions of MNC’s dynamic capabilities. Additionally, the effect of domestic firms’ relational embeddedness on resource reconfiguring capability is mediated by foreign firms’ embeddedness. Consequently, this study provides a theoretical introduction for MNCs from emerging economies.

Practical implications

This study has several managerial implications for emerging MNCs’ international operations. For MNCs from emerging economies, close cooperation with domestic firms helps firms to develop a close relationship with foreign firms; meanwhile, developing a close relationship with foreign firms can obtain spillover about technology and management experience better, improving dynamic capability. Specifically, domestic embeddedness, through foreign embeddedness, can extend the impact to focal firms in developing resource reconfiguring capability.

Originality/value

This study provides an alternate view of how home country networks influence the dynamic capabilities of Chinese MNCs and outlines its impact mechanism. Therefore, the study contributes both to the international business literature and social network literature.

Details

Chinese Management Studies, vol. 15 no. 1
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 11 June 2020

Shaojie Han, Yibo Lyu, Ruonan Ji, Yuqing Zhu, Jingqin Su and Lining Bao

This study aims at developing a better understanding of the relationship between network embeddedness and incremental innovation capability and further examines the…

Abstract

Purpose

This study aims at developing a better understanding of the relationship between network embeddedness and incremental innovation capability and further examines the moderating effect of open innovation.

Design/methodology/approach

This paper adopts hierarchical regressions to validate the theoretical model and collect the patent data of the top 54 firm patentees in the smartphone industry as empirical sample. Using patent citation network data, this paper estimates the relationship between open innovation, network embeddedness and incremental innovation capability.

Findings

This paper empirically shows that structural embeddedness exerts a negative effect on incremental innovation capability, while relational embeddedness is positively related to incremental innovation capability. And open innovation strengthens the relationship between network embeddedness and incremental innovation capability.

Originality/value

This paper shifts the focus of the determinants of incremental innovation capability from internal factors to the external network features by exploring the linkage between network embeddedness and incremental innovation capability. A counterintuitive conclusion is that structural embeddedness shows a negative effect on firm's incremental innovation capability. Furthermore, in contrast to most previous studies, which only focus on the direct effect of open innovation on the firm's incremental innovation capability, our study examines the moderating effect of open innovation on the relationships between network embeddedness and incremental innovation capability. At last, the results provide practical guidance for firms to occupy the beneficial network positions and adopt appropriate open innovation strategies to improve their incremental innovation capability.

Details

Management Decision, vol. 58 no. 12
Type: Research Article
ISSN: 0025-1747

Keywords

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Article
Publication date: 2 December 2019

Artur Swierczek

The purpose of this paper is to explore whether brokered network governance, run by the manufacturer, affects relational embeddedness and thus contributes to yielding the…

Abstract

Purpose

The purpose of this paper is to explore whether brokered network governance, run by the manufacturer, affects relational embeddedness and thus contributes to yielding the Coleman rent in the triadic supply chains.

Design/methodology/approach

Building upon the theoretical tenets of transaction cost analysis, complemented by the underpinnings of social capital theory, this study involves an empirical investigation that uses survey data collected from the triadic supply chains in Europe. The research covers a two-step analysis. In the first step, the Coleman rent was estimated through the regression analysis with the interaction effects. Then, partial least squares–structural equation modeling was used to estimate the reflective-formative nature of higher component model and test the research hypotheses.

Findings

The results of the study demonstrate that the distribution of three mechanisms in network governance is relatively even; however, market and hierarchy still emerge as the most impactful dimensions. Interestingly, though, this study shows that social capital can actually coexist with market and hierarchy in the triadic supply chains with the structural hole. Likewise, the research indicates that the impact of brokered network governance on the strength of network relational embeddedness is significant, but relatively weak, whereas network relational embeddedness has a strong and positive effect on the Coleman rent.

Research limitations/implications

This study makes three major contributions. First, this study is one of very few that explicitly considers brokered network governance, run by the manufacturer positioned on the structural hole in its triadic supply chain. Second, as the triadic perspective is still uncommon in the supply chain studies, this research investigates a triad with the structural hole within the manufacturing setting. Third, the paper seeks to investigate the ability to yield the Coleman rent in the triadic supply chains with the structural hole, although this type of rent is typically linked to another arrangement called closure.

Originality/value

Given the increasing attention paid to the role of social capital within supply chains, this study investigates how relational embeddedness can be used by the manufacturer, sitting on the structural hole and running the network governance mechanism, to yield the Coleman rent in the triadic supply chain.

Details

Supply Chain Management: An International Journal, vol. 25 no. 3
Type: Research Article
ISSN: 1359-8546

Keywords

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Article
Publication date: 7 January 2019

Dehui Li, Libo Fan and Zhenning Yang

Although the importance of network embeddedness attracted much attention in recent years, the interpretations of the underlying mechanism almost focus on the positive…

Abstract

Purpose

Although the importance of network embeddedness attracted much attention in recent years, the interpretations of the underlying mechanism almost focus on the positive effects and neglect the potential negative aspects. This paper aims to use Chinese listed manufacturing enterprises, in the perspective of network embeddedness, to analyze whether resource curse effects exist in strategic networks of enterprises.

Design/methodology/approach

This paper examines the resource curse effect that exists in enterprise networks through analysis of enterprise’s total factors productivity compared with those of its industry peers with different degrees of embeddedness. This paper then uses several different methods, such as clustered fixed and random effect model, core and peripheral model, and generalized method of moments estimation in endogenous checks, to detect network curse effects and reveal three potential mechanisms, including overinvestment, extra maintaining cost and innovation extrusion.

Findings

This paper finds that excessive network embeddedness hinders continuous improvement of productivity, which is derived from three mechanisms: excessive network embeddedness makes information redundancy among enterprises, and the imitate-follow effect makes excessive investment seriously; enterprises have to encounter more problems and difficulties, such as information coordination and benefit negotiation, to maintain network relationship, which leads to extra cost; enterprises with abundant network resources may tend to more emphasis on marketable operational abilities, resulting in resource decentralization and less investment on innovation, which is finally not beneficial to productivity improvement in the long run.

Originality/value

Compared with previous literatures, this paper not only enriches the understanding of negative mechanisms in enterprise`s network embeddedness, but also unfolds the inconsistency of network embeddedness effects in practice and finds new evidence that the two types of network embeddedness are consistent in certain circumstances.

Details

Nankai Business Review International, vol. 10 no. 1
Type: Research Article
ISSN: 2040-8749

Keywords

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