IT Structure & Firm Interdependency - Relational Rents


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Di Gangi, P. M. and Bush, A. (2008) The impact of IT structure and firm interdependency on relational rents in innovation collaboration networks. Proceedings of the 14th Americas Conference on Information Systems.

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IT Structure & Firm Interdependency - Relational Rents

  1. 1. The Impact of Firm Interdependency and IT Structure on Relational Rents in Innovation Collaboration Networks <ul><li>Paul M. Di Gangi </li></ul><ul><li>Florida State University </li></ul><ul><li>College of Business </li></ul><ul><li>Ashley A. Bush </li></ul><ul><li>Florida State University </li></ul><ul><li>College of Business </li></ul>
  2. 2. Agenda <ul><li>Motivation of Study & Research Questions </li></ul><ul><li>Theoretical Foundation & Model </li></ul><ul><li>Hypotheses </li></ul><ul><li>Research Methodology, Measures, & Analysis </li></ul><ul><li>Expected Contributions, Limitations, & Future Directions </li></ul>
  3. 3. Motivation of Study <ul><li>Open Business Models (Chesborough, 2003) </li></ul><ul><ul><li>Recognizes Sources of Value External to Organization </li></ul></ul><ul><ul><li>Suggests the Use of Directed Strategy for Increasing Organizational Profitability </li></ul></ul><ul><li>Open Innovation Processes (Owen-Smith & Powell, 2004) </li></ul><ul><ul><li>Recognizes Sources of Innovations External to the Organization </li></ul></ul><ul><ul><li>Suggests the Use of Innovation Collaboration Networks </li></ul></ul>
  4. 4. Motivation of Study (Cont’d) <ul><li>Innovation Collaboration Networks </li></ul><ul><ul><li>Networks Designed for Research and Development Activities (Ahuja, 2000) </li></ul></ul><ul><li>Relational Rents </li></ul><ul><ul><li>“ a supernormal profit jointly generated in an exchange relationship that cannot be generated by either firm in isolation and can only be created through the joint idiosyncratic contributions of the specific alliance partners.” (Dyer & Singh, 1998) </li></ul></ul>
  5. 5. Research Questions <ul><li>What factors lead to the maximum likelihood of generating relational rents for innovation collaboration networks? </li></ul><ul><li>How does the alignment between firm interdependency and the social structure of an innovation collaboration network affect the networks ability to generate relational rents? </li></ul>
  6. 6. Theoretical Foundation <ul><li>Relational View of the Firm </li></ul><ul><ul><li>Extension from Resource-Based View (Barney, 1991) </li></ul></ul><ul><li>Sources of Relational Rents (Dyer & Singh, 1998) </li></ul><ul><ul><li>Interfirm Relationship-Specific Assets </li></ul></ul><ul><ul><li>Interfirm Knowledge-Sharing Routines </li></ul></ul><ul><ul><li>Complementary Resource Endowments </li></ul></ul><ul><ul><li>Effective Governance Structures </li></ul></ul>
  7. 7. Research Model
  8. 8. H1: Firm Interdependency <ul><li>Pooled Interdependence </li></ul><ul><ul><li>Limited Complementary Resource Endowments </li></ul></ul><ul><li>Sequential Interdependence </li></ul><ul><ul><li>Moderate Complementary Resource Endowments </li></ul></ul><ul><li>Reciprocal Interdependence </li></ul><ul><ul><li>Strong Complementary Resource Endowments </li></ul></ul>
  9. 9. H2: IT Structure <ul><li>Structural Holes </li></ul><ul><ul><li>Diverse Non-redundant Knowledge Assets </li></ul></ul><ul><ul><li>Limited Inter-organizational Interaction </li></ul></ul><ul><li>Hybrid Ties </li></ul><ul><ul><li>Mixture of Non-redundant and Redundant Knowledge Assets </li></ul></ul><ul><ul><li>Moderate Inter-organizational Interaction </li></ul></ul><ul><li>Strong Ties </li></ul><ul><ul><li>Redundant Knowledge Assets </li></ul></ul><ul><ul><li>Strong Inter-organizational Interaction </li></ul></ul>
  10. 10. H3: Alignment of Network Properties <ul><li>Aligned Networks </li></ul><ul><ul><li>Pooled-Structural Hole Network </li></ul></ul><ul><ul><li>Reciprocal-Strong Tie Network </li></ul></ul><ul><li>Misaligned Networks </li></ul><ul><ul><li>Pooled-Strong Tie Network </li></ul></ul><ul><ul><li>Reciprocal-Structural Hole Network </li></ul></ul>
  11. 11. H3: Alignment of Network Properties <ul><li>Aligned Networks </li></ul><ul><ul><li>Pooled-Structural Hole Network </li></ul></ul><ul><ul><li>Reciprocal-Strong Tie Network </li></ul></ul><ul><li>Misaligned Networks </li></ul><ul><ul><li>Pooled-Strong Tie Network </li></ul></ul><ul><ul><li>Reciprocal-Structural Hole Network </li></ul></ul>
  12. 12. Research Methodology <ul><li>Sample Selection </li></ul><ul><ul><li>Pharmaceutical / Biotechnology Organizations (Ahuja, 2000) </li></ul></ul><ul><ul><li>Securities Data Company (SDC) Database </li></ul></ul><ul><ul><ul><li>Alliance Partners </li></ul></ul></ul><ul><ul><ul><li>Partner Activities </li></ul></ul></ul><ul><ul><ul><li>Alliance Types </li></ul></ul></ul><ul><ul><ul><li>Industry Setting </li></ul></ul></ul><ul><li>Data Collection </li></ul><ul><ul><li>Mixed-method Approach </li></ul></ul><ul><ul><li>Open-ended Questionnaires </li></ul></ul><ul><ul><ul><li>Alliance Partnership Manager </li></ul></ul></ul><ul><ul><li>Network Analysis </li></ul></ul><ul><ul><ul><li>IT Manager / Vice-President IT Operations </li></ul></ul></ul><ul><ul><li>Objective Measure </li></ul></ul><ul><ul><ul><li>Joint Patents </li></ul></ul></ul><ul><ul><ul><li>US Patent Office </li></ul></ul></ul>
  13. 13. Research Measures <ul><li>Relational Rents </li></ul><ul><ul><li>Joint Patents </li></ul></ul><ul><ul><li>Proxy for Intellectual Property (Ahuja, 2000; Chesborough, 2003; Schilling et al., 2007) </li></ul></ul><ul><li>Firm Interdependency </li></ul><ul><ul><li>Strategic Rationales (Gulati & Singh, 1998) </li></ul></ul><ul><ul><li>Open-ended Questionnaire </li></ul></ul><ul><li>IT Structure </li></ul><ul><ul><li>Proportion of network that has access to all other ties within the network (Burt, 1992) </li></ul></ul><ul><ul><li>Indicator of network density </li></ul></ul>
  14. 14. Research Design & Analysis <ul><li>Survey / Questionnaire </li></ul><ul><ul><li>Alliance Manager </li></ul></ul><ul><ul><li>IT Manager / Vice-President of IT Operations </li></ul></ul><ul><li>Control Variables </li></ul><ul><ul><li>Innovation Type </li></ul></ul><ul><ul><li>Network Size </li></ul></ul><ul><ul><li>Prior Alliance Relationship </li></ul></ul><ul><li>Statistical Analysis </li></ul><ul><ul><li>Hierarchical Regression Models </li></ul></ul><ul><ul><ul><li>Model 1: Control Variables </li></ul></ul></ul><ul><ul><ul><li>Model 2: Firm Interdependency </li></ul></ul></ul><ul><ul><ul><li>Model 3: IT Structure </li></ul></ul></ul><ul><ul><ul><li>Model 4: Alignment of Structural Properties </li></ul></ul></ul>
  15. 15. Expected Contributions <ul><li>Practitioner </li></ul><ul><ul><li>Organizations can choose which innovation networks to participate in based on individual structural properties </li></ul></ul><ul><ul><li>Raises awareness of the alignment issue between structural properties </li></ul></ul><ul><li>Theoretical </li></ul><ul><ul><li>Examines innovation networks at the inter-organizational level </li></ul></ul><ul><ul><li>Suggests relationship between degree of interdependency and relational rent generation </li></ul></ul><ul><ul><li>Suggests alignment between strategic orientation (Firm Interdependency) and IT Structure </li></ul></ul>
  16. 16. Limitations <ul><li>Assumes organizations possess similar interdependency requirements when participating within an innovation collaboration network </li></ul><ul><li>Assumptions on firm interdependency </li></ul><ul><li>Limited scope of alignment issue empirically examined (Does not examine hybrid forms of social structure and firm interdependency) </li></ul>
  17. 17. Future Directions <ul><li>Further examination of the misalignment issue for innovation collaboration networks and moderating factors </li></ul><ul><li>Empirically validate assumptions on firm interdependencies and introduce complex interdependency issues in innovation collaboration networks </li></ul><ul><li>Further research firm interdependency relationship on performance outcomes </li></ul><ul><li>Examine interactions within the proposed structural dimensions followed by the interaction between the structural dimensions on relational rent generation </li></ul>
  18. 18. Questions