Meso-Foundations of Interorganizational Relationships: How Team Power Structures Shape Partner Novelty
53 Pages Posted: 27 Nov 2017 Last revised: 23 Jul 2019
Date Written: July 22, 2019
Novel external partnerships are valuable but risky, and scholars have examined the organization- and individual-level determinants of firms’ decisions to pursue these new relationships. Yet, in organizations doing complex and knowledge-intensive work, decisions about interorganizational relationships are often made within teams. We characterize these decisions as a two-stage process where a team member proposes a partner and other team members respond, supporting or challenging the proposal. As novel partnerships are risky and power is a key determinant of risk-taking propensity, we argue that the power of team members – both those who initiate proposals and those teammates who respond – will shape the novelty of the external partnerships the team ultimately pursues. Using personnel data from project teams in an automated equipment design and build firm, we find that the effect of power on partner novelty depends on both the type of power and the role of the person in the decision process. Partner novelty is more likely when those initiating proposals hold formal structural power, but less likely when initiators hold informal power. Both the formal and informal power of the initiator’s teammates attenuate the effect of initiator power, such that the more power one’s teammates have, the less one’s own power will affect the likelihood of novel external partner selection. Finally, we provide evidence that these effects on supplier novelty are as materially consequential for project outcomes as other strategic choices available to project teams. These findings have implications for the intraorganizational determinants of interorganizational networks.
Keywords: iinterorganizational networks, project-based organizations, formal structure, informal structure, power
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