Managing networks: The nature, levels, and roles of relational capabilities

Networks have what we describe as a dark side . For example, they can produce inertia within the organizations that make up the network, or within the network itself. We argue that relational capabilities are an antidote to this dark-side of networks: the greater the relational capabilities the less likely a network will experience inertia. In this paper we offer a framework in which we propose that the creation of relational capabilities is, in part, a function of initial conditions (Doz, 1996; Arino and de la Torre, 1998; Doz, Olk and Ring, 2000; Das and Teng, 2002) that exist at the time firms embedded in networks consider the possibility of collaborating. In addition, we argue that the nature and variety of relational capabilities that will be needed by firms operating in networks also will be a function of the evolutionary paths (Doz, Olk and Ring 2000; Ring, Doz and Olk, 2005) over which networks emerge. Further, we will argue that these relational capabilities must either exist, or be developed, at both individual and organizational levels. We will discuss how and why individual and organizational capabilities differ, exploring them from a dynamic perspective, relying in part on the work of (Zollo, Reuer and Singh, 2002; Zollo and Winter, 2002; Winter, 2003; Jacobides and Winter, 2005; Ethiraj, Kale and Singh, 2006; Kim, Oh and Swaminathan, 2006) and on more recent arguments by Gong, Baker and Miner (2006) based on earlier work by Miner and her colleagues (e.g., Miner, Bassoff and Moorman, 2001; Moorman and Miner, 1998; Baker, Miner and Eesley, 2003).