Premium
Competing in groups
Author(s) -
Rowley Tim J.,
Baum Joel A. C.,
Shipilov Andrew V.,
Greve Henrich R.,
Rao Hayagreeva
Publication year - 2004
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.1201
Subject(s) - affect (linguistics) , clique , embeddedness , centrality , diversity (politics) , value (mathematics) , investment (military) , microeconomics , business , industrial organization , economics , politics , social psychology , sociology , psychology , mathematics , statistics , political science , communication , anthropology , law
In this study, we examine how the characteristics of clique structures affect the performance of firms embedded within the cliques. Although it is generally accepted in organization theory and strategic management that firms are embedded within ego and overarching industry networks that each affect their behavior and performance, there is little evidence on whether cliques are stable features of industry networks or affect firm behavior or performance. We theorize that the value of a clique to its members depends on (1) the network centrality of the clique and (2) the internal structure and organization (heterogeneity and inequality) of the clique. Our analysis of the Canadian investment banking industry from 1952 to 1990 provides empirical evidence of stable cliques, and indicates that while a clique's internal structure and organization materially affect firm‐level benefits of clique membership, its positional embeddedness within the industry network does not. Copyright © 2004 John Wiley & Sons, Ltd.