Abstract
While structural holes theory seeks to provide a social structural explanation of competitive advantage, the theory is largely silent on how a firm’s network position influences its ability to develop organizational capabilities. This is concerning given the prominence of organizational capabilities in explanations of competitive advantage in the strategic management literature. In this paper, we address this gap by formally integrating the assumptions of structural holes theory with those of the capabilities perspective in a simulation model. The model produces several new theoretical insights. The primary insight is that brokerage involves a tradeoff in capability development, the discovery- competence tradeoff, which helps to determine the size of the effect of brokerage on capability value.
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