How Inter-Organizational Networks Can Become Path-Dependent: Bargaining in the Photonics Industry

Abstract

This paper investigates how path dependence may come about in inter-organizational networks. To do so, we focus our analysis on one particular type of network management practices – bargaining practices – and ask whether and how they can become path-dependent. Bargaining practices are recurrent activities through which network partners agree to identify and distribute their cooperative surplus. Targeting these practices, we first operationalize the core concepts of path dependence theory by deriving empirical indicators. We then use a ‘pattern matching’ approach to analyze whether these empirical indicators can be found in real bargaining practices. Empirically, we conduct three case studies of regional networks in the photonics industry. We use qualitative interviews and content analysis to reconstruct the development dynamics of their bargaining practices. A major finding is that network bargaining practices can indeed exhibit inter-organizational path dependencies. This paper contributes not only by operationalizing the theory of organizational path dependence but also by extending this theory to the network level of analysis.

Keywords: inter-organizational networks, path dependence, photonics industry, practice theory, empirical, qualitative