Network Dynamics and Knowledge Transfer in Virtual Organizations: Overcoming the Liability of Dispersion

28 Pages Posted: 19 Jul 2014

See all articles by Neil Gandal

Neil Gandal

Berglas School of Economics, Tel Aviv University; Centre for Economic Policy Research (CEPR)

Uriel Stettner

Tel Aviv University - Recanati Business School

Date Written: July 17, 2014

Abstract

Product development within and across community-based and geographically dispersed virtual organizations is becoming an increasingly important mechanism through which individual knowledge holders create and disseminate knowledge in joint efforts to generate products. Without the benefits of face-to-face communication, such organizations face a particular set of constraints in their exposure to knowledge and know-how. This “liability of dispersion” increases the importance of the architecture of network ties that undergird the distinct development efforts, the embedded social structures, and the particular relationships involved in their product-generating efforts. In this paper, we examine whether particular network structures foster knowledge transfer among distinct open-source projects. We conjecture that Star developers — actors characterized by increasing levels of embeddedness and the associated ability to form ties with several projects within a network — serve boundary-spanning functions that facilitate an organization’s ability to collect, assimilate, and apply external information. We find support for this conjecture in our investigation of a network of open-source software projects and developers compiled from a dataset drawn from Sourceforge.net. We also show that becoming part of a giant network component is associated with relatively large changes in project performance.

Keywords: Network Dynamics, Knowledge Spillovers, Social Network, Open Source, Exploration, Exploitation, Social Capital

Suggested Citation

Gandal, Neil and Stettner, Uriel, Network Dynamics and Knowledge Transfer in Virtual Organizations: Overcoming the Liability of Dispersion (July 17, 2014). Available at SSRN: https://ssrn.com/abstract=2467626 or http://dx.doi.org/10.2139/ssrn.2467626

Neil Gandal

Berglas School of Economics, Tel Aviv University ( email )

Tel Aviv University
Tel Aviv 69978
Israel
+972 3 640 9907 (Phone)
+972 3 640 9908 (Fax)

HOME PAGE: http://www.neilgandal.com/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Uriel Stettner (Contact Author)

Tel Aviv University - Recanati Business School ( email )

Ramat Aviv
Tel-Aviv, 6997801
Israel

HOME PAGE: http://il.linkedin.com/in/urielstettner/

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