When Do Interorganizational Relations Serve Client Benefit? The Role of Enabling Network Structures

Abstract

The vibrant scholarly inquiry into the outcomes of interorganizational relations has rarely attended to the outcomes of these relations for organizations’ clients. We therefore lack good understanding of how interorganizational networks serve the benefits of the clients, particularly when organizational outcomes are loosely coupled with the clients’ outcomes. We posit that the clients’ benefit from providers’ networks depends on the providers’ knowledge of their partners’ complementary capabilities. We examine two relational factors that lower barriers to knowledge sharing and thereby help clients benefit from providers’ network relations. Building on insights from social comparison theory, we argue that organizations are more likely to know their partners’ complementary capabilities and employ these complementarities to the benefit of the clients when their performance visibly differs from that of their network partners. We further argue that preferential transaction with a limited set of partners has a ...