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Governing Complex Strategic Networks: Emergence Versus Enabling Effects

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Abstract

In today’s knowledge-based economy, the sources of competitive advantage increasingly lie in webs of relationships between a variety of firms and organizations that, over time, lead to the emergence of strategic networks. As the performances of both the network actors and the whole network are strictly linked with the coordination and governance of network actors and their activities, this study aims to shed light on the ways in which the processes of network coordination and governance take place.

Strategic networks are here viewed as complex adaptive systems, and the twin nature of the processes of strategic network coordination and governance is examined. On one hand, I underscore the emergent nature of network interactions stemming from the self-organizing behaviors that spontaneously arise inside the strategic network. On the other hand, I show that the leadership action of network-central firms sparks enabling effects that join the self-organizing network behaviors. The result of these two forces is the expansion of the network’s interaction potential to permit both the network actors and the strategic network as a whole to reach level of performance that would not otherwise be accomplished.

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Notes

  1. 1.

    These firms are termed in a variety of manners, such as hub firms (Jarrillo 1988; Davis and Eisenhardt 2011), focal firms (Nohria and Garcia-Pont 1991; Gulati 1999; McEvily and Zaheer 1999; Gulati et al. 2000; Zaheer and Bell 2005), key actors (Knoke 1994), triggering entities (Browning et al. 1995; Doz et al. 2000), strategic centers (Lorenzoni and Baden-Fuller 1995), network orchestrators (Hinterhuber 2002; Dhanaraj and Parkhe 2006), and so on.

  2. 2.

    In detail, neither SNA, complexity theory or complexity and new-genre leadership theories outline necessary and sufficient conditions for explaining strategic networks in all their relevant aspects.

  3. 3.

    A network actors’ schema is “a cognitive structure that determines what action the agent takes at time t, given its perception of the environment (at time t, or at time t – k if theoretical considerations suggest applying a lag structure)” (Anderson 1999, p. 219).

  4. 4.

    “Reductionism refers to research logic in which parts of a system are isolated and studied independently of the system from which they derive - the general idea is that, if one can understand the parts, one can draw conclusions about the whole. Determinism is the belief that all events are caused by preceding events and by knowing the preceding variables one can predict the future with certainty” (Marion and Uhl-Bien 2001, pp. 391).

  5. 5.

    More in detail, complex leadership in a bureaucratic organization entails three interconnected functions: (a) administrative leadership refers to the actions of individuals and groups in formal managerial roles who plan and coordinate firm activities; (b) adaptive leadership is a generative dynamic that produces adaptive emergent change behaviors in a CAS; and, (c) enabling leadership catalyzes adaptive dynamics and supports the management of the interconnection between formal administrative subsystems and structures and informal adaptive subsystems and structures by nurturing enabling conditions and facilitating the dissemination and integration of innovative outcomes of adaptive leadership into the formal managerial subsystem (Uhl-Bien et al. 2007; Uhl-Bien and Marion 2009).

  6. 6.

    In essence, the formulation of charismatic and transformational leadership theories are highly complementary both portraying the leaders’ strategic vision as playing a central role in motivating and empowering followers. Accordingly, it is a common practice in many studies to treat these two theories simultaneously and to term them new-genre leadership theories (Bryman 1992). Actually, they study the same phenomenon from different vantage points. Roughly, the charismatic studies have primarily seen leadership from the standpoint of perceived leader behavior (Weber 1947; Conger and Kanungo 1987, 1998), whereas the transformational studies have concerned themselves mainly with follower outcomes (Burn 1978; Bass 1985; Tichy and Devanna 1990). For further detail about similarities and differences between charismatic and transformational leadership see: Yukl (1999).

  7. 7.

    Originally developed by Simon (1955, 1957), the “rich get richer” idea is referred to as the Matthew effect in sociology and as cumulative advantage by de Solla Price (1965), who applied it to network systems. Today, it is usually known under the label preferential attachment, coined by Barabási and Albert (1999).

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Authors and Affiliations

  1. Department of Economics, Management and Statistics, University of Palermo, Viale delle Scienze, Ed. 13, 90128, Palermo, Italy

    Gabriella Levanti

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  1. Gabriella Levanti
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Editors and Affiliations

  1. Professor of Management, University of Palermo and Business Systems Laboratory, Palermo and Avellino, Italy

    Gandolfo Dominici

  2. Professor of Management, University of Rome “Link Campus”, Naples, Italy

    Manlio Del Giudice

  3. Law and Economics of Productive Activities, Sapienza University of Rome, Rome, Italy

    Rosa Lombardi

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Levanti, G. (2018). Governing Complex Strategic Networks: Emergence Versus Enabling Effects. In: Dominici, G., Del Giudice, M., Lombardi, R. (eds) Governing Business Systems. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-66036-3_3

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