A Latent Space Modeling Approach to Interfirm Relationship Analysis

Interfirm relationships are crucial to our understanding of firms’ collective and interactive behavior. Many information systems-related phenomena, including the diffusion of innovations, standard alliances, technology collaboration, and outsourcing, involve a multitude of relationships between firms. This study proposes a latent space approach to model temporal change in a dual-view interfirm network. We assume that interfirm relationships depend on an underlying latent space; firms that are close to each other in the latent space are more likely to develop a relationship. We construct the latent space by embedding two dynamic networks of firms in an integrated manner, resulting in a more comprehensive view of an interfirm relationship. We validate our approach by introducing three business measures derived from the latent space model to study alliance formation and stock comovement. We illustrate how the trajectories of firms provide insights into alliance activities. We also show that our proposed measures have strong predictive power on stock comovement. We believe the proposed approach enriches the methodology toolbox of IS researchers in studying interfirm relationships.

Predicting Labor Market Competition: Leveraging Interfirm Network and Employee Skills

Human capital is a key component of the knowledge economy. Firms compete not only for consumers in the product market but also for human capital in the labor market. In this study, we perform an interfirm labor market competitor analysis using the online profiles of more than 89,000 employees and their career histories that span more than 3,000 public firms. Using these profiles, we characterize firms through the granular skill distribution of their employees. Also, using employee migrations across firms, we derive and analyze a human capital flow (HCF) network. Such information allows us to measure the interfirm human capital overlap in terms of similarity in their employees’ skills and HCF network structure. We show that our proposed human capital overlap metrics have superior predictive power over conventional firm-level measures in predicting future labor market competitors. We further demonstrate how our proposed metrics and the prediction framework can be incorporated into a comprehensive two-dimensional competitor analysis that includes both product and labor overlap between firms. By evaluating interfirm relationships in the product and labor markets simultaneously, this two-dimensional competitor analysis framework can help managers make strategic decisions beyond human resources, such as product development and customer relationship management.

Interfirm networks and search-transfer problem: the role of geographic proximity

PurposeThis paper represents an empirical study of how geographic proximity influences the search advantage and the transfer problem of interfirm networks.Design/methodology/approachBy using the data collected from 226 Chinese manufacturing firms, this study examines the proposed hypotheses.FindingsThe authors’ findings suggest that (1) geographic proximity is an important antecedent for promoting knowledge transfer, whereas it lowers the degree of knowledge novelty; and (2) geographic proximity also moderates the effects of interfirm networks on knowledge novelty and knowledge transfer.Originality/valueThis study contributes the literature of interfirm network and provides practical implications by addressing the ways in which manufacturing firms can promote knowledge transfer and acquire novel knowledge.

Network resource meets organizational agility

Purpose The purpose of this paper is to propose that a firm could exploit the ties of interfirm network to access external network resources (NR) to assist its sensing and responding capabilities for the variability of business environment, thereby leading to superior organizational performance. Design/methodology/approach This study uses the survey data collected from 260 small- and medium-sized enterprises (SMEs) in Taiwan to examine the causal effects of hypotheses testing. By adopting structural equation modeling technology, the direct and mediating effects among the NR, sensing capability (SC), responding capability (RC) and firm performance (FP) are explored. Findings The result of this paper shows that a firm’s NR and its organizational capabilities are critical antecedents of FP. Moreover, the mediating testing identifies NR and FP as being mediated by a firm’s organizational agility (OA) and RC. Practical implications The findings of this paper provide practical evidence that a SME could gain benefits and advantages from the joint effect of integrating NR and OA to compete with global conglomerates. Thus, a SME must put more effort into developing and maintaining its interfirm network and then figuring out its effect with its internal agility process in order to surmount unexpected changes, create advantages of the first-mover and innovation activities and boost the FP. Originality/value This paper combines external NR and internal OA and offers a practical strategy to a SME, creating a unique competitive advantage for further development in a dynamic business environment.

Within-Seller and Buyer–Seller Network Structures and Key Account Profitability

In business-to-business (B2B) markets, the success of key account management (KAM) teams depends on how they are structured and how they handle customer relationships. The authors conceptualize relationships among selling team members as a within-seller (intrafirm) network and the relationships between selling team members and buyer representatives as a buyer–seller (interfirm) network. Drawing on both structural (buyer–seller density, within-seller density, and within-seller centralization) and functional (buyer–seller similar function ties and within-seller cross-functional ties) composition attributes of these networks, the authors examine how the interplay between these networks drives seller account profitability. Using data from 207 key account managers across B2B industries, the authors uncover a nuanced pattern of interplay across the two networks. Densities in the two networks are mutually substitutive, but density in the buyer–seller networks and centralization in the within-seller networks serve complementary roles. Cross-function ties in the within-seller network serve a complementary role too, but only in relation to similar function ties in the buyer–seller network. In contrast, within-seller centralization supports both network density and similar function ties in the buyer–seller network and, thus, emerges as a valuable KAM team characteristic. These findings suggest multiple ways for firms to align interfirm and intrafirm KAM networks to improve account profitability.

Development of interfirm network management activities: The impact of industry, firm age and size

This article investigates the structural characteristics of firms that promote activities involving partners who coordinate with each other to achieve common or individual goals. The article also aims to verify empirically whether these activities generate advantages for companies embedded in relationships by examining the effects of industry, age and size on interfirm network management activities in a sample of Spanish companies operating in several industries and belonging to networks. The results show differences according to the life cycle stage: growth or maturity. Only the relation between interfirm network management activity and performance has been confirmed in both samples. The findings point to the need to consider the industrial environment when analysing firms’ networking decisions because the situations they face differ in mature or growing industries.