Clique to Win? Impact of Simmelian Ties on Collaborative Project Performance

Abstract

Large infrastructure and public works projects require resources not often found in individual firms. Competitive bidding motivates contractors to form partnerships with subcontractors to win and implement such projects. Projects with no prior interactions between partners tend to develop structural holes, providing the coordinating contractors with brokering privileges. But through repeated project interactions communication and trust develops giving rise to cohesive clique networks and Simmelian ties. Instead of asymmetric power structures, cliques develop group norms and constrain opportunistic behavior by members. How do these two different collaborative arrangements engaging distinct network microstructures impact project outcomes? This study examines the role of network structures on collaborative project outcomes in a novel setting where multiple firms collaborate and compete to win and execute projects. Multi-year longitudinal network analysis of public infrastructure projects implemented in the State of California, reveal that compared to dyadic ties, Simmelian ties and network closure between team members help thwart external competition and internal opportunistic behavior leading to favorable project outcomes. Our empirical results contribute to network theory and multipartner alliance formation by examining the dynamics of inter-firm collaborative network structures and subsequent effect on collaborative work.