Premium
Complexity, Identity and the Value of Knowledge‐intensive Exchanges
Author(s) -
Karamanos Anastasios G.
Publication year - 2003
Publication title -
journal of management studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.398
H-Index - 184
eISSN - 1467-6486
pISSN - 0022-2380
DOI - 10.1111/1467-6486.00403
Subject(s) - bandwagon effect , embeddedness , context (archaeology) , value (mathematics) , value network , function (biology) , microeconomics , industrial organization , knowledge management , business , economics , marketing , computer science , sociology , social psychology , psychology , business model , paleontology , machine learning , evolutionary biology , anthropology , biology
Researchers studying the structural embeddedness of firms in networks have focused on its effects on economic behaviour, strategic action and competitive behaviour, but network embeddedness as a source of firm value per se has been largely overlooked. I argue that neglecting the network context in which firms are embedded leads to an incomplete understanding of the value of the firm. I seek to understand how a focal firm's structural embeddedness network characteristics function as mechanisms that elucidate the value of its knowledge‐intensive exchanges. This paper presents a framework that identifies two processes of knowing exchange value, namely knowing through a learning bandwagon and knowing through a fad bandwagon. I argue that knowing value as a learning bandwagon is enabled by the normative and cognitive proximity of exchange partners, and that this is facilitated by the embeddedness of the focal firm in dense network structures. Knowing value as a fad bandwagon is based on a positional construction of the focal firm's status, which is determined by the centrality of the focal firm's network partners in their corresponding networks. This is a ranking system based on positional network data, whose efficacy stems from the inability of firms to manipulate their network positions.