Lecture 2

Question 1

embeddedness

Answer 1

social embeddedness is defined as the degree to which commercial transactions take place through social relations

Question 2

why does embeddedness matter?

Answer 2

• research shows that social structure affects outcomes
• organizations are never alone but in social structures of other organizations; always embedded in markets
• economic transactions are always to some extent social

Question 3

the paradox of embeddedness

Answer 3

• embedded actors satisfice instead of maximize
• embeddedness creates economic opportunities that are difficult to replicate via markets, contracts or vertical integration
• trust as the primary governance structure
• ‘too embedded’ can also have negative effects

Question 4

Uzzi, 1997

Answer 4

• first order network (made up of an actor’s ties to its exchange partners)
• second order network (made up of an actor’s exchange partners’ ties to their exchange partners)
• arm length ties: weak ties, no connection, via via
• integrated network: not under-embedded nor over-embedded, new information coming in from weak ties, not fragmented

Question 5

Dyer & Nobeoka

Answer 5

• created a high-performance sharing network in order to better their performance
• quicker learning, strong network identity, knowledge as property of network, dynamic learning capability
• network superior to a firm if it can create a strong identity and coordinating rules

Question 6

Cattani & Ferriani: core periphery network structure

Answer 6

characterized by a cohesive subgroup of core actors and set of peripheral actors that are loosely connected to the core

Question 7

Main findings Cattani & Ferriani

Answer 7

• individuals with intermediate position between core and periphery are in a favorable position to achieve creative results
• if individuals do not have intermediate position, they can have the same benefits by participating in a balanced team that combine core and peripheral