Vertical group formation: A social process perspective

Abstract

Vertical groups are a common occurrence that is rarely studied as a group-level phenomenon. This paper brings attention to the vertical group, as a collective actor, and group formation processes. We define the vertical group and describe, in brief, why they exist. We explore the issue of how they form and the social processes under which different types of groups are likely to emerge. These include trial and error learning, social learning, and social identification. We introduce a framework that shows how variation in two more fundamental enabling conditions affects both the group development process and the characteristics of the emerging groups. Copyright © 2004 John Wiley & Sons, Ltd.

Playing football in a soccer field: value chain structures, institutional modularity and success in foreign expansion

“…Nishiguchi, 1994;Lane, 1996). In terms of the framework recently developed by Peteraf and Shanley (1997) and Shanley and Peteraf (2004), each industry in each country may be endowed with different, and possibly inconsistent 'vertical groups', through country-specific social generative processes. In terms of the framework developed by Jacobides et al (2006), each country may have a different, distinct ''industry architecture'', i.e.…”

“…Thus, each country has a distinct evolutionary trajectory in each industry where capabilities, scope, and the institutional context interact and shape the nature of the participants, leading to the creation of fairly distinct 'vertical groups' (Shanley and Peteraf, 2004) along the way. It is exactly these inter-national differences in the nature of these 'vertical groups' in otherwise identical industries that hamper the exportability of competitive advantage.…”

“…So far, the argument is that the way labor is divided in national contexts is not just determined by technological imperatives. Differences in the managerial structures along different parts of the value chain do provide the basic blueprint in terms of the scope of the industry's boundaries; that is, differences or similarities along the industry's value chain, or set of activities do provide a set of likely boundaries which 'make sense' in terms of effective management and effective competency development (Shanley and Peteraf, 2004;Jacobides and Winter, 2005;. For instance, the existence of an artistic component, a measurement component, an engineering component, and an economic study/feasibility and follow up component suggest that the construction industry would benefit from the existence of different firms along the value chain.…”

New Institutional Economics' contribution to strategic groups analysis

“…McNamara et al, 2003); the existence of communities of practice (Brown and Duguid, 1991) has been argued to contribute to the emergence of identity}central to the psychological approach to constructing strategic groups}(e.g. Peteraf and Shanley, 1997;Reger and Huff, 1993); and the influence of networks of relationships (Granovetter, 1985) has been shown to influence choices across strategic groups (Garcia-Pont and Nohria, 2002), as well as the formation of 'vertical groups' (Shanley and Peteraf, 2004). The validity of the analogy between strategic groups research and NIE at this level can be found in the fact that strategic groups and NIE researchers investigating factors at this level refer to widely overlapping source references.…”

“…Nath and Gruca, 1997). Thomas and Carroll (1994) explored the interplay between strategic groups studies focusing on network relationships, cognitive structures and asset endowment and positioning, and Peteraf and Shanley (1997) and Shanley and Peteraf (2004) analyzed how economic, historical and institutional factors influence the processes of strategic group emergence and structuration. The present framework provides a theoretical backbone to such analyses and completes our perspective in the sense that all studies can be mapped to one of the four levels of analysis.…”