When do interorganizational relationships work?
Faculty Advisor: Toby Stuart
This dissertation analyzes under what conditions interorganizational relationships are beneficial and under what conditions they might negatively affect an organizations' strategies and performance. The first chapter investigates how third party ties, i.e., the relationships that focal organization's partner has, might affect the focal organization's performance. In this chapter, I provide a formal theory and empirical evidence to show that if (i) there is a conflict of interest between the focal organization and third party organization, and (ii) third party is more important than the focal organization for the survival of focal organization's partner; the focal organization's partner acts in line with third party' goals, rather than those of focal organization, decreasing the focal organization's performance. I provide evidence for my theory using the relationships between young organizations and VC firms endorsing them. The second chapter analyzes how the impact of status, i.e., deference given to an organization in networks of interorganizatinal relationships, varies with different dimensions of uncertainty in determining an organization's performance. Using an empirical context of the VC capital syndicate networks and VC investments, I show that status is more important especially when an organization faces high firm-specific uncertainty. The third chapter analyzes the relationship between formal and informal contracting mechanisms in alliance contracts. In particular, this chapter suggests that formal and informal contracts act as substitutes to the extent that they both mitigate opportunistic tendencies of partners.