Opening Closure: Intercohesion and Entrepreneurial Dynamics in Business Groups

42 Pages Posted: 23 Oct 2008 Last revised: 2 Dec 2008

See all articles by Balazs Vedres

Balazs Vedres

Central European University; University of Oxford - Oxford Internet Institute

David Stark

Columbia University

Date Written: October 7, 2008

Abstract

The twinned challenge for entrepreneurial groups is recognizing new ideas and implementing them. In one view, connectivity reaching outside the group channels new ideas while closure makes it possible to act on them. We argue that entrepreneurship is not about importing information but about generating new knowledge through recombining resources. In contrast to the brokerage-plus-closure perspective, we identify a distinctive network position, intercohesion, at the overlap of cohesive group structures. The multiple insiders at this intercohesive position participate in dense cohesive ties that provide close familiarity with the operations of the members in their group. But because they are members of multiple cohesive groups, they have familiar access to diverse resources. We first test whether intercohesion contributes to higher group performance. Second, because entrepreneurship is a process of creative disruption, we test intercohesion's contribution to group instability. Third, moving from dynamic methods to historical network analysis, we demonstrate that coherence is a property of interwoven lineages of cohesion built up through separating and reuniting in an ongoing pattern of interweaving by which business groups manage instability while benefitting from intercohesion. To study the evolution of business groups, our dataset records personnel ties among the largest 1,696 Hungarian enterprises from 1987-2001.

Keywords: social network analysis, business groups, group cohesion, entrepreneurship

Suggested Citation

Vedres, Balazs and Stark, David, Opening Closure: Intercohesion and Entrepreneurial Dynamics in Business Groups (October 7, 2008). Available at SSRN: https://ssrn.com/abstract=1288100 or http://dx.doi.org/10.2139/ssrn.1288100

Balazs Vedres (Contact Author)

Central European University ( email )

Vienna
Austria

University of Oxford - Oxford Internet Institute ( email )

1 St. Giles
University of Oxford
Oxford OX1 3PG Oxfordshire, Oxfordshire OX1 3JS
United Kingdom

David Stark

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

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