Competing in groups

Tim J. Rowley, Joel A. C. Baum, Andrew V. Shipilov, Henrich R. Greve and Hayagreeva Rao
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Tim J. Rowley: Rotman School of Management, University of Toronto, Canada, Postal: Rotman School of Management, University of Toronto, Canada
Joel A. C. Baum: Rotman School of Management, University of Toronto, Canada, Postal: Rotman School of Management, University of Toronto, Canada
Andrew V. Shipilov: Rotman School of Management, University of Toronto, Canada, Postal: Rotman School of Management, University of Toronto, Canada
Henrich R. Greve: Norwegian School of Management, Norway, Postal: Norwegian School of Management, Norway
Hayagreeva Rao: Kellogg Graduate School of Business, Northwestern University, USA, Postal: Kellogg Graduate School of Business, Northwestern University, USA

Managerial and Decision Economics, 2004, vol. 25, issue 6-7, pages 453-471

Abstract: 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.

Date: 2004
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