Week 6

Question 1

There are 3 unit of analysis in networks. Which one and what are there main issues?

Answer 1

1. Multi-partner alliance
   Voluntary organizational arrangement between more than two parties, with common objectives, joint decision making and shared risks
   issue: opportunistic behaviour, free riding
2. Alliance portfolio: several alliance relationships simultaneously that together contribute a firms alliance portfolio
   Issue: coordinate and manage this relationships well
3. Strategic network: does exist of more than only the direct partners in the portfolio. Also include indirect partners/relationships in decision making to prevent unintended network changes
   Main benefit: networks as ‘pipes’: transfer of information and resource
   Main benefit: networks as ‘pipes’: transfer of information and resource

Question 2

Some characteristics of networks are: size, density, ties (structural holes), centrality. Explain them.

Answer 2

1. Size: number of actors embedded in the network (i.e., network boundary). Greater size: greater flow of information/resources, more opportunities but higher complexity and coordination challenges.
2. Density: Percentage of ties present in the network in relation to the total number of possible ties in the entire network, if everyone was connected to everyone else. Higher density: higher network effects, but also more overlapping relationships which can cause redundancy
3. Ties: strong ties (frequent interactions) weak ties (infrequent interactions)
   Structural holes: gaps between two groups who do not interact directly but have complementary information or resources.
4. Centrality: How closely connected is an organization in the interorganizational network both directly and indirectly. Tiger centralisation means more reliance on key nodes, vulnerability and efficient communication. Lower centralisation means more distributed control, less vulnerable, and potential redundancy

Question 3

What are key management functions needed to maintain and optimize strategic network?

Answer 3

• help network actors to common objective
• indentify and asses potential network actors
• build commitment among actors
• organize and control interactions