research@hec - Issue #19 - (Page II)

of US Corporate Networks The Structure and Workings Dalhia Mani research professor of strategy at research focuses on Core alliance, joint-venture, and acquisition network PhD in sociology from structure. She holds a the University of Minnesota. hery ryp Pe Core-periphery network structure BIOGRAPHY Dalhia Mani is a HEC Paris. Mani’s “NEIGHBORHOODS” Mintz and Schwarz’s 1985 study of the ties between 500 public companies in the United States concluded that this network followed a “core-periphery” structure: a handful of densely connected companies constituted the core of this network. They proposed that this network structure indicated that a handful of companies held disproportionate influence in the U.S. economy, and controlled the flow of information among companies in the economy. In 2003, Davis, Yoo, and Baker, used a different methodology, and found that the largest corporations in the United States displayed a “small world” structure: companies formed clusters with dense ties connecting companies within a cluster, and relatively few ties across these clusters. Davis, Yoo, and Baker proposed that this network structure indicated that information flowed easily within the network, jumping from cluster to cluster, and spreading easily within clusters. Dalhia Mani and David Knoke point out that these earlier studies (a) focused only on the largest firms in the economy, and (b) used methodology that aggregated across different parts of the network, and hence did not over time. ter lus Dalhia Mani and David Knoke examine shareholding ties, joint ventures, and alliances in the United States, shedding light on their structure and evolution hec “Small worlds” network structure c c take into account differences between different parts of the network. They propose the concept of “neighborhoods,” to study the variation within the network, and focus on the structure of different parts of the network. Using newer methodology and economy-wide data, they find that the structure of the U.S. corporate network in 2008 varies widely, with the largest percentage of companies having only one alliance or joint venture with another company. Other parts of the network follow a small world structure, and yet other parts follow a coreperiphery structure. This finding indicates that different companies experience power and information flow differently depending on whether their network neighborhood is a small world, core-periphery, or isolated with few ties. Companies NEIGHBORHOOD STRUCTURES The “neighborhood” perspective means looking at a company and its ties to other companies, (and the ties that those companies have to others) to determine the structure of the company’s network neighborhood. A network neighborhood might have one of several structures. nested network structure Connexion between companies One Two Three r ste lu c r ste lu II research@hec • February-March 2011

Table of Contents for the Digital Edition of research@hec - Issue #19

Cover & Contents
The Structure and Workings of Interorganizational Networks
Limit Orders: Time Counts More Than Information
Strategic Alliances: The Need for a Holistic Approach
HEC PARIS Publishing News

research@hec - Issue #19