Investigating broker centrality in innovation-driven networks

Abstract

Purpose In contrast to the vertical supply chain structure, firms are increasingly engaging in horizontal inter-firm collaborations to develop new technologies, products and services, yet, little is known about factors that influence the governance mechanism and performance of such collaborative projects. The purpose of this paper is to investigate how different factors affect the role or the centrality of the governing mechanism (the broker) in inter-firm collaborative networks. Design/methodology/approach Using a case study method approach, this paper studies three dynamic networks comprising firms that are not in a traditional supply chain relationship. The networks comprised firms engaged in the development of different aspects of an innovative automotive technology. Findings The study finds that broker’s centrality varies over time and is directly related to project performance; network structure and perceived broker power are related to broker centrality in dynamic networks. The more loosely connected a network is (open network), the more the degree of broker centrality. The higher the degree of expert power that a broker is perceived to possess, the higher is the degree of broker centrality. Originality/value Investigating governance mechanism and determinants of network outcomes in inter-firm collaboration for new product development represents a departure from the traditional studies on similar phenomena in vertically structured supply chain arrangements; thus, contributes to the literature on innovation in inter-firm arrangements. Understanding how the salient factors contribute to performance at the network level builds on firm level and dyadic level of analysis or focus of previous studies.