Ao. Univ.-Prof. Dr. Josef Windsperger
E-mail: josef.windsperger@univie.ac.at
Homepage: www.univie.ac.at/IM
Office hours: Wednesday 11.00 – 12.30
PhD-DK: Theory of Networks
The course provides a general discussion of the theoretical foundation of networks (strategic
alliances, joint ventures, franchising, licensing, consortia, clusters, virtual networks). It
emphasizes the relationships between different theories and networks. The sessions provide a
overview of a number of the major theoretical and methodological approaches adopted in
network research as it evolved into a specific research field. The course incorporates sessions on
essential aspects of network research including transaction cost economics, property rights
theory, information economics, resource-based theory, real options reasoning and the relational
view of networks. In particular, the course highlights current research challenges and
methodological issues facing the research in economics and management of networks and
encourages a discussion among the participants to determine what constitutes an appropriate
future research strategy, especially applied to your PhD-project.
Objectives
The course aims to:
1. Confront students with the theoretical approaches applied to networks;
2. Share insights on contributions made to the field and discuss relevance to students’ own PhD
research
project.
Sessions:
SER 3, BWZ, University of Vienna, Brünner Str. 72, A-1210 Vienna
Monday: 15.00 – 18.00
10. 11., (Intoductory Session), 24. 11. (Topic 1 and 2), 1. 12. (Topic 3 and 4), 15. 12. (Topic 5
and 6), 12. 1. (Topic 7), 19. 1. 2009 (Topics 8)
REQUIREMENTS
The goal of this course is to familiarize students with a broad range of theoretical approaches that
explain networks. The requirements are twofold:
(a) Class preparation and participation:
I)
You have to prepare the discussion question for the Introductory Session (3
pages).
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II)
You will be required to write
a. Four summaries of the assigned texts (see Guidelines below). These
summaries are due at the start of each seminar session and have to be
submitted to josef.windsperger@univie.ac.at.
b. You have to present one summary of a discussion paper in January (20
minutes presentation). Please send me your presentation one day before
your presentation.
OR
Instead of four summaries and the presentation of the discussion paper, you can
submit your own research paper on strategy and governance of networks. Choose
a research topic for a paper that can be submitted to a peer-reviewed journal; the
paper must be presented in January and submitted by February 15.
(b) Research paper: Each group has to complete a research paper (see Guidelines below).
The paper should present the most important research results based on the relevant
literature (see www.elearning.univie.ac.at). First, you should use the papers listed below.
Second, you should include further important papers if they go beyond the indicated
literature.
The final grade will be based on the summaries including presentation) (40 %) and the
final paper (including presentation) (60 %). The research paper must be submitted on
Friday before the presentation to Josef.windsperger@univie.ac.at.
(c) Presentations in the class:
I)
Research Paper (Topic 1 – 6): The presentation time for the research paper is
not more than 40 minutes.
II) Presentation of assigned discussion paper (Presentation time: 20 minutes) in January
2009. The Power Point presentations have to be submitted - at the latest - at the day of
presentations to josef.windsperger@univie.ac.at.
GUIDELINES
(a) Discussion papers: Summaries of articles (3 – 4 pages)
Here are some rules for the structure of summaries:
1. Summarize the reading’s argument: Recapitulate the key steps in the author’s
argument.
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2. Do an ‘internal’ critique: Accepting the author’s starting assumption, identify the
strengths and weaknesses of this study.
3. Do an ‘external’ critique: Examine critically the author’s assumptions, and
identify how they might question the author’s argument. Criticize and compare the
author’s approach with others.
4. Finally, you should think about how this research helps us in trying to explain the
real world.
(b) Research Papers (20 – 25 pages)
Here are some rules for the structure of the paper: The heart of your paper should be
(1) to summarize and criticize the relevant literature and method and
(2) to discuss ways how to improve the existing research results. Outline a research strategy:
Describe how you think you could improve the theoretical arguments and/or the methods.
What kind of empirical methodology could be use?
In preparing the paper, you should read somewhat beyond the list of the required articles
indicated in the course outline.
Relevant Literature
All papers can be downloaded from the elearning platform Blackboard Vista
(http://elearning.univie.ac.at).
Introductory Session - Lecture
In this introductory session, the different theoretical perspectives as well as concepts will be
introduced. Attention will also be paid to fundamental questions related to the existence and the
motives of forming alliances for firms.
References:
Combs JG, Ketchen DJ jr. 1999. Explaining interfirm cooperation and performance: toward a
reconciliation of
predictions from the resource-based view and organizational economics. Strategic Management
Journal 20:
867-888.
De Rond M, Bouchikhi H. 2004. On the dialectics of strategic alliances. Organization Science
15: 56-69.
Ireland RD, Hitt MA, Vaidyanath D. 2002. Alliance management as a source of competitive
advantage.
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Journal of Management 28: 413-446.
Kogut B. 1988. Joint ventures: theoretical and empirical perspectives. Strategic Management
Journal 9: 319332.
Park SO, Ungson GR. 2001. Interfirm rivalry and managerial complexity: a conceptual
framework of alliance
failure. Organization Science 12: 37-53.
Shenkar O, Reuer JJ. 2005. The alliance puzzle: known terrain, black boxes, and the road ahead.
In
Handbook of Strategic Alliances, Shenkar O, Reuer JJ (eds.). Sage Publications: Newburry Park,
CA.
Discussion:
On basis of these introductory articles, please identify the different theoretical perspectives
applied to networks and argue why firms increasingly turn to networks.
Topic 1: Transaction Cost Economics & Networks
References:
Williamson OE. 1991. Comparative economic organization: the analysis of discrete structural
alternatives.
Administrative Science Quarterly 36: 269-296.
Hennart JF. 1988. A transaction cost theory of equity joint ventures. Strategic Management
Journal 9: 361374.
Hennart J-F, Reddy S. 1997. The choice between mergers/acquisitions and joint ventures: The
case of
Japanese investors in the United States. Strategic Management Journal 18: 1-12.
Oxley JE. 1997. Appropriability hazards and governance in strategic alliances: a transaction cost
approach.
Journal of Law, Economics, and Organization 13: 387-409.
Leiblein MJ, Reuer JJ, Dalsace F. 2002. Do make or buy decisions matter? The influence of
organizational
governance on technological performance. Strategic Management Journal 23: 817-833.
David, R. J., S.-K. Han (2004), A Systematical Assessment of the Empirical Support for the
Transaction Cost Economics, Strategic Management Journal, 25, 39 – 58.
Discussion:
On the basis of these articles, please identify key findings or insights and also identify research
questions deserving attention.
Topic 2: Resource-based and Organizational Capability Theory & Networks
References:
Grant RM. 1991. The resource-based theory of competitive advantage: implications for strategy
formulation. California Management Review 33: 114-135
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Eisenhardt KM. and Martin JA. 2000. Dynamic capabilities: What are they? Strategic
Management Journal 21: 1105-1121
Griffith DA. and Harvey MG. 2001. A resource perspective of global dynamic capabilities.
Journal of International Business Studies 32 (3): 597-606.
Teece DJ., Pisano G. and Shuen A. 1997. Dynamic capabilities and strategic management.
Strategic Management Journal 18: 509-533
Foss, N. J. (2005), Scientific Progress in Strategic Management: The Case of Resource-Based
View, Journal of Learning and Intellectual Capital (in print).
Newbert, S. L. (2006), Empirical Research on the Resource-based view of the firm, Strategic
Management Journal, 28, 121 – 146.
Gulati, R. (1999), Network Location and Learning:The Influence of Network Resources and
Learning on Alliance Formation, Strategic Management Journal, 20, 397 – 420.
Lorenzi, G., A. Lipparini (1999), The Leveraging of Interfirm Relationships as distinctive
organizational capability, Strategic Management Journal, 20, 317 – 338.
Jacobides, G. (2005), Architecture and Design of Organizational Capabilities, Working paper,
London Business School.
On the basis of the readings, please compare and contrast resource-based with the transaction cost
theories used in strategy and international business.
Topic 3: Information Economics & Networks
In this session, we will cover theory from information economics (signalling and screening
theory) and discuss opportunities to apply this research to the network literature.
References:
Akerlof GA. 1970. The market for 'lemons': quality uncertainty and the market mechanism.
Quarterly Journal
of Economics 84: 488-500.
Reuer JJ, Koza MP. 2000a. Asymmetric information and joint venture performance: theory and
evidence for
domestic and international joint ventures. Strategic Management Journal 21: 81-88.
Royer JJ, Koza MP 2000b. On lemons and indigestibility: Resource assembly through joint
ventures, Strategic Management Journal, 21, 1995 – 1997.
Reuer JJ. 2005. Avoiding lemons in M&A deals. Sloan Management Review 46: 15-17.
Spence M. 1973. Job market signaling. Quarterly Journal of Economics 87: 355-374.
Stiglitz JE. 2000. The contributions of the economics of information to twentieth century
economics.
Quarterly Journal of Economics 115: 1441-1478.
Reuer JJ, Ragozzino R. 2006. Initial public offerings and organizational governance: evidence
from joint
ventures and acquisitions. Working paper.
Discussion:
On the basis of the readings, please compare and contrast information economics with the
transaction cost theories used in strategy and international business.
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Topic 4: Property Rights Theory & Networks
References:
Hart, O., J. Moore (1990), Property Rights and the Nature of the Firm, Journal of Political
Economy, 98, 1119 – 1158.
Brynjolfsson, E. (1994), Information Assets, Technology, and Organization, Management
Science, 40, 164 -1662.
Baker, G. P., R. N. Hubbard (2001), Empirical Strategies in Contract Economics: Information
and the Boundaries of the Firm, American Economic Review, 91, 189 – 194.
Windsperger, J., R. P. Dant (2006), Contractibility and Ownership Redirection in Franchising: A
Property Rights View, Journal of Retailing 82, 259 – 272.
Kim, J., J. T. Mahoney (2005), How property rights economics furthers resource-based view:
Resources, transaction costs and entrepreneurial discovery, Working paper.
Elfenbein, D.W., J. Lerner (2003), Ownership and Control Rights in Internet Portal Alliances
1995 – 1999, RAND Journal of Economics, 34, 356 – 369.
Discussion:
On the basis of these readings, please compare and contrast the property rights theory with the
resource-based and organizational capabilities theories to explain networks.
Topic 5: Real Options & Networks
References:
Bowman EH, Hurry D. 1993. Strategy through the options lens: an integrated view of resource
investments
and the incremental-choice process. Academy of Management Review 18: 760-782.
Chi T. 2000. Option to acquire or divest a joint venture. Strategic Management Journal 21: 665687.
Folta TB. 1998. Governance and uncertainty: The tradeoff between administrative control and
commitment.
Strategic Management Journal 19: 1007-1028.
Kogut B. 1991. Joint ventures and the option to expand and acquire. Management Science 37: 1933.
Reuer JJ, Leiblein MJ. 2000. Downside risk implications of multinationality and international
joint ventures.
Academy of Management Journal 43: 203-214.
Kogut B. and Kulatilaka N. 2001. Capabilities as Real Options. Organization Science 12 (6):
744-758
Discussion:
On the basis of these readings, please compare and contrast the real options view with other
theories of networks. What are the key challenges and opportunities associated with using real
options to study networks?
Topic 6: Relational View & Networks
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Many firms have difficulties managing strategic alliances successfully. Partly this is due to
issues such as trust and commitment, which allow the alliance to successfully evolve.
References:
Gulati, R. 1995. Does Familarity Breed Trust? The Implication of Repeated Ties for Contractual
Choice in Alliances, Academy of Management Journal, 38, 85 – 112.
Dyer JH, Singh H. 1998. The relational view: cooperative strategy and sources of interorganizational
competitive advantage. Academy of Management Review 23: 660-679.
Molina J. 1999. On the relational view. The Academy of Management Review 24 (2): 184-185.
Dyer J. 1999. Response to Relational View Commentary. The Academy of Management Review
24 (2): 185-186.
Gulati R., Nohria N. and Zaheer A. 2000. Strategic Networks. Strategic Management Journal 21:
203-215.
Anderson, E., S. D. Jap (2006), The dark side of close relationships, Sloan Management Review,
Spring, 75 – 82.
Dyer, J., W. Chu (2000), The Determinants of Trust in the Supplier-Automaker Relationships in
US, Japan and Korea, Journal of International Business Studies, 31, 259 – 285.
Gulati, R., J. Nickerson (2006), Interorganizational Trust, Governance Choice and Exchange
Performance, Organization Science (accepted).
Discussion:
Based on your interpretation of the different readings, please discuss the most important
contributions of the relational view and discuss how these issues contributes to other theoretical
approaches.
Topic 7 and 8: New Developments in the Theory of Networks–
(A) Discussion Paper Sessions and (B) Presentation of Own Research Paper
Ad (A):
Topic 7: Organizational Boundaries and Networks
Reuer JJ, Arino A. 2006. Contractual complexity in strategic alliances. Working paper.
Elfenbein, D.W., J. Lerner (2003), Ownership and Control Rights in Internet Portal Alliances
1995 – 1999, RAND Journal of Economics, 34, 356 – 369.
Gulati, R., P. R. Lawrence, P. Puranam (2006), Adaptation in Vertical Relationships: Beyond
Incentive Conflict, Strategic Management Journal, 26, 415 – 440.
Jacobides, M. G., S. Billinger (2006), Designing the Boundaries of the Firm: From “Make, Buy
or Ally” to the Dynamic Benefits of Vertical Architecture, Organization Science, 17, 249 – 261.
Santos, F. M., K. M. Eisenhardt (2005), Organizational Boundaries and Theories of Organization,
Organization Science, 16, 491 – 508.
Topic 8: New Research Developments on Networks
Gulati, R. P. Puranam (2007), Complementarity & Constraints: Why both firms make and buy
the same thing? Working Paper, Northwestern University, Kellogg School of Management.
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Parmigiani A. (2007), Why do Firms both Make and Buy? An Investigation of Concurrent
Sourcing, Strategic Management Journal, 28, 285 – 311.
Nickerson, J., D. He (2006), Why do firms make and buy: Efficiency, Appropriability, and
Competition in the Trucking Industry, Strategic Organization, 4, 43 – 77
Lazzarini, S. G., G. J. Miller, T. R. Zenger (2006), Dealing with the Paradox of Embeddedness:
The Role of Contract and Trust in Facilitating Movement out of Committed Relationship,
Working Paper, Olin School of Business.
Tong T, Reuer JJ, Peng M. 2006. International joint ventures and the value of growth options.
Academy of Management Journal forthcoming.
Ad (B)
Presentation of the own reseach paper that applies concepts based on theories of networks.
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