Friends and Foes: The Dynamics of Dual Social Structures

• Main Author: Adam TATARYNOWICZ
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2012
• Subjects: Organizational Behavior and Theory; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/4853
• Institution: Singapore Management University

This paper investigates to what extent the principles of structural balance drive the formation of a dual social structure that encompasses collaboration and conflict among corporate actors. Our findings are threefold. First, we find that existing collaborative or conflictual relationships between two companies perpetuate future relationships of the same type, but crowd out relationships of the different type. This results in (1) an increased likelihood of formation of balanced (uniplex) relationships that combine multiple ties of either collaboration or conflict and (2) a reduced likelihood of formation of unbalanced (multiplex) relationships that combine collaboration and conflict between the same two firms. Second, we find that whereas the network’s formation is not driven by a pull toward balanced triads, it is described by a pull away from unbalanced triads. Third and finally, we find that the observed micro-level dynamics of dyads and triads reproduce the structural segregation of the global network into two separate collaborative and conflictual segments of firms. For our empirical analyses, we used data on the dual interorganizational network of strategic partnerships and patent-infringement and antitrust lawsuits in biotechnology and pharmaceuticals from 1996 to 2006.