Status and Structural Holes: Two Studies on Alliance Formation and Portfolio Management


Student thesis: Doctoral Thesis

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  • Guangxi ZHANG

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Awarding Institution
Award date30 Aug 2012


This dissertation explores the ambiguous relationship between status (Podolny, 1993, 2005) and structural holes (Burt, 1992, 2005), two of the most important approaches in network studies. Status is a signal of the perceived quality that reduces uncertainty in selecting a potential partner. A structural hole is a gap between two unconnected alters. Investigating the relationship between status and structural holes is important because it contributes to network theory by highlighting the conflicts, clarifying the mechanisms, and advancing possible ways of reconciliation. Because the relationship between status and structural holes may exist for a single actor or between different actors, there are two scenarios: alliance formation and portfolio management. Therefore, two questions are asked: 1) Under what conditions a firm with rich structural holes is more attractive to a high-status partner at alliance formation? 2) Under what conditions a high-status firm is more likely to bridge structural holes within an alliance portfolio?

Subsequently, two studies are conducted to answer these questions using a sample in the US computer industry. The first study addresses the relationship between a focal firm's structural holes and a partner's status. When a broker approaches a high-status partner, both opportunities of synergy and risks of misappropriation are argued to emerge. This trade-off is relieved if a broker can take advantage of its alliance portfolio capital (Sarkar, Aulakh, & Madhok, 2009) to attract a high-status partner. The results indicate that brokers are more likely to ally with high-status partners if they have better alliance portfolio capital.

The second study focuses on the relationship between a focal firm's status and structural holes within an alliance portfolio. Status is argued to be a significant antecedent of structural holes, but perusing the two positions at the same time may cause status leakage or poor performance. Drawing on the motivation-opportunity-ability (MOA) framework (Blumberg & Pringle, 1982), I contend that high-status firms may have greater opportunity and ability to bridge structural holes but often lack the motivation to do so. Specifically, motivation factors are investigated at multiple levels: firm-specific knowledge resources (firm level), portfolio technological diversity (portfolio level), and industry network density (industry level). The results suggest that high-status firms are more likely to forgo brokerage opportunities when they own richer firm-specific knowledge resources or when they have developed a diversified alliance portfolio.