Results of Hierarchical Regression: Cooperation Cooperation
CHAPTER 7. DISCUSSION AND CONCLUSION
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CHAPTER 7. DISCUSSION AND CONCLUSION
SECTION 7.1. DISSCUSION AND RESEARCH CONTRIBUTIONS
In this thesis, I combine a case study and an empirical study. In the case study, I elaborate the process leading a merged firm to successfully resolve identity conflicts between it and other group members and successfully integrate into a business group.Although the feelings of hostility were serious in the initial stage of post-acquisition, the president of this merged firm still attempted to use friendship to build some informal connections between his subordinates and people in the headquarters or in sister affiliates. These informal connections gave people in the merged firm more chances to make a comparison and further desire for new definitions of the firm.
Cutting off old links with some partners symbolized that this merged firm decided to abandon some outdated images and building up new links with other group members helped it find possible self. This connection transition not only poured some congruent values into this focal firm’s identity pool but also helped this firm realize that some distinctive values were worth to be kept. Congruent values represented that this merged firm had some shared methods of behaving and helped it win others’
recognition. Distinctive values represented that this merged firm had something for others to learn from it and attracted potential partners to actively build connections with it. Gradually, this merged firm resolved identity conflicts between it and other group members.
This case study offers insights for organizational identity theory. In the logic of organizational identity theory, people prefer to highlight similarities within groups and dissimilarities between groups (Rao, Davis, & Ward, 2000) to draw a clear
boundary between “us” and “them”. Following this logic, if a firm would like to win ingroup members’ recognition or resolve identity conflicts, it should increase
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similarities and decrease dissimilarities in its identities. However, my findings give a different perspective. Besides congruent values mentioned in traditional
organizational identity literature, distinctive values which provide some advantages for others to learn from the focal firm also can help the focal firm win ingroup members’ recognition and resolve identity conflicts. In another word, increasing similarities and decreasing dissimilarities is not the only way out. Furthermore, intuitively, integration and differentiation look like opposite ends of the same spectrum. Namely, the sum of identity integration and identity differentiation is 1, but, in my findings, it is not a trade-off relationship between identity integration and identity differentiation.
To echo above case study, I conducted an empirical study to offer statistical supports. Overall, empirical results offer substantial support for my predictions derived from qualitative study and theoretical framework. In the case study, while this merged firm gradually poured more integrating elements into its identity pool to reach high identity integration, it also did its best to hold current distinctive values or develop new uniqueness to reach high identity differentiation at the same time.
Those qualities not only offer a common system of communication which facilitates coordination but also provide some advantages for potential partners to imitate.
Therefore, those integrating values and distinctive values helped the merged firm obtain more partners and move to a relatively central position. While previous studies argue that firms can obtain more chances of cooperation through creating ties with the king in the network or effectively use resources to build connections with potential partners, the merged firm went through an identity transformation process to reach this goal. This is a way which seldom be mentioned in previous studies.
However, who are more likely to achieve high identity integration and high identity differentiation? I find that peripheral brokers, who are not constrained by a
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certain group and have more flexibility, are more likely to have more integrating values and more distinctive values. Besides, while most of previous studies argue that central actors are more likely to have more cooperation with others, I,
counter-intuitively, propose that peripheral brokers have more likelihood to have more cooperation because they do not need to deal with redundant information or do
time-consuming coordination tasks. Moreover, while the association between brokerage and cooperation is validated in previous studies, I open a black box in this relationship – high identity integration and high identity differentiation plays a mediating role in this association.
This empirical study offers several insights for social network theory. First, while previous studies try to find the antecedents of cooperation from resources or partner portfolio perspectives, I find a new way, identity transformation, which can help firms obtain more chances of cooperation. Second, I find that, if firms can reach the peripheral broker position, they are more likely to reach high identity integration and high identity differentiation. Third, while the relationship between centrality and cooperation is widely validated, I find that peripheral brokers (who are in the peripheral block) still have good chances to cooperate with others. Fourth, I open the black box, high identity integration and high identity differentiation, in the relationship between brokerage and cooperation.
From a methodological perspective, I created two constructs, identity integration and identity differentiation. Integration and differentiation are cornerstones of management and organization literature. In prior research, it is common to measure integration using input/output tables (Harzing, 2000) or the degree of integration of functional department (Cording, Christmann, & King, 2008;
Lawrence & Lorsch, 1967) and measure differentiation using the degree of differentiation of functional departments (Lawrence & Lorsch, 1967). To more
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accurately capture those two important constructs, through inductive and deductive approaches, I discovered multiple dimensions of integration and differentiation.
Furthermore, while numerous scholars encourage researchers to collect longitudinal data and data about invisible ties in business groups (Khanna & Rivkin, 2006) to extend our knowledge boundary, most studies still use data about visible ties (such as shareholding) to conduct empirical analyses due to the difficulty of accessing internal documents. I not only collected longitudinal data about invisible ties (such as transaction relationships) from multiple sources for the sake of contributing to the theory, but also collected interview data and various kinds of secondary data to complete the qualitative case study for the sake of providing some managerial implications. I hope that the success of this effort will encourage future studies on business groups.
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