Social Networks, Learning, and Flexibility: Sourcing Scientific Knowledge in New Biotechnology Firms

Abstract

This paper examines the organizational arrangements used by New Biotechnology Firms (NBFs) to source scientific knowledge. Using data from two highly successful NBFs, the paper shows that both firms relied principally on hierarchies and networks to source scientific knowledge; market arrangements were insignificant. Most interesting, each firm had a very large, diversified set of boundary-spanning collaborative research arrangements, mostly involving university scientists. It is argued that these external research networks enabled the two firms studied to compete more successfully in a highly turbulent and highly competitive industry environment.

Contacts and Contracts: Cross-Level Network Dynamics in the Development of an Aircraft Material

“…Second, our findings are based on a single case in a specific context. The five episode types discerned here may be typical for multipartner alliances and networks in an innovation context, as the importance of interpersonal networks in R&D consortia is well established, and networks around technology ventures tend be based on embedded relations instead of arms-length relations (e.g., Doz et al 2000, Liebeskind et al 1996, Hite and Hesterly 2001. Yet similar interactions between interpersonal and interorganizational networks might also be found in other contexts that center on relatively autonomous professionals, who have to balance loyalty toward their organization with loyalties toward the community of peers and loyalty toward a shared idea, vision, or passion.…”

“…An agreement between two or more organizations to cooperate cannot be enacted without at least work relationships between boundary-spanning individuals (Van de Ven 1976). At the same time, however, many friendship or advice relations may exist between individuals in different organizations without any agreement at the level of the organization (Liebeskind et al 1996). Thus, although the two networks exist at different levels, the interpersonal network is not necessarily nested within the interorganizational network (Oliver and Liebeskind 1998).…”

Business Models for Information Goods Electronic Commerce

“…This is what Williamson calls hybrid transaction governance, and some other authors call clans (cf. Ciborra, 1987) or networks (cf Liebeskind et al, 1996). High asset specific goods are infeasible to supply by hybrids, because their ownership conditions are such strict that the unspecificity of ownership common to hybrids have to be avoided even if the asset is highly codified.…”

“…This payment may result from the work of the invisible hand (the market), mutual understanding and networking (the handshaking in hybrids), and fiat in hierarchies. Because prices are hard to define in hybrids (Liebeskind et al, 1996), the payment for use mostly consists of invitations for collaboration on further development, and sharing profits when the information good can be sold or exploited. In the hierarchy, the most important ownership is the right to reap the profits exclusively.…”

“…As far as they are not fully codifiable, other trade mechanisms than markets are more useful (Liebeskind et al, 1996;Williamson, 1991). Most hospitals, organisation consultants and educational institutes have websites, which help clients to make an initial diagnosis, an initial analysis, or give information concerning research results and courses.…”