The Management of Growth Strategies in Firm Networks: A Stylized Model of Opportunity Discovery via Network Ties

This paper draws on the structural embeddedness perspective to conceptually address the following question: “What is the relation between firm growth and its structural position within a network of multirelational ties?” While the organizational approaches that have adhered to the structural embeddedness perspective build on the implicit assumption that the firm is embedded in multiple inter-firm networks, shaping the set of information, opportunities and external resources available to the firm, most research has focused on a single dimension. Typically, a certain organizational outcome is related to a set of relational variables derived from a single network. Building on this conceptual gap, we develop an empirically testable theoretical model of how structural attributes of the firm, as well as the firm’s absorptive capacity influence the likelihood of firm growth. Asymmetries in growth potential arise because firms engage in multiple network relations that imply diverse access to information and opportunities as well as differential ability to assimilate such flows. The paper contributes two original insights to the organizational literature: first, it illustrates the importance of a multirelational conceptualization of firm embeddedness; second, it advances an original approach to network ties as enablers of firm growth.