Network governance institutionalization: Creating mutual value by harnessing and avoiding conflicts in interorganizational networks

Abstract

Interorganizational network governance provides a set of jointly shared principles that affect the interaction among the network actors, and ultimately, the value created in the network. Past research has focused on specific network governance mechanisms and the organizations enforcing those and has paid less attention to the degree of which those mechanisms are institutionalized in the network. To bridge this gap, we develop a conceptual model with regulative, normative, and cultural-cognitive dimensions to network governance institutionalization. We hypothesize that these three dimensions have a role in facilitating or suppressing affective and cognitive conflicts, ultimately increasing or decreasing common network benefits. Testing our model on a sample of 145 firms in Germany, we find that affective conflicts are harmful for common network benefits, while cognitive conflicts are beneficial. Furthermore, we find that regulative, normative, and cultural-cognitive governance dimensions each play a particular role in facilitating or suppressing both types of conflict.