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Meso-Foundations Of Interorganizational Relationships: How Team Power Structures Shape Partner Novelty

Trevor Young-Hyman, Adam M. Kleinbaum

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Novel external partnerships are valuable but risky, and scholars have examined the organization- and individual-level determinants of firms’ decisions to pursue these new relationships. Yet, in organizations performing complex and knowledge-intensive work, decisions about interorganizational relationships are often made within teams. We characterize these decisions as a two-stage process in which a team member proposes a partner and other team members respond, supporting or challenging the proposal. As novel partnerships are risky, and power is a key determinant of risk-taking propensity, we argue that the power of team members—both those who initiate proposals and those who respond—will shape the likelihood that the team will pursue a novel external partnership. Using personnel data from project teams in an automated equipment design and build firm, we find that the effect of power on the likelihood of novel partner adoption depends on both the type of power and the role of the person in the decision process. Novel partner selection is more likely when those initiating proposals hold formal structural power but less likely when initiators hold informal power. Both the formal and informal power of the initiator’s teammates attenuate the effect of initiator power, such that the more power one’s teammates have, the less one’s own power will affect the likelihood of novel external partner selection. Finally, we provide evidence that these effects on likelihood of novel partner adoption are as materially consequential for project outcomes as other strategic choices available to project teams. These findings have implications for the intraorganizational determinants of interorganizational networks.