Trigger Strategies for Standard Diffusion in Interorganizational Networks: A Conceptual Model and Simulation

Introduction

Multiple actors are often involved in collective action when establishing a new standard¹ (Hargrave and van de Ven, 2006). Collective action means that different actors come together to influence a standardization process in such a way that the result is in their interest. This is often the only option in interorganizational networks where hierarchical intervention is not possible (Powell, 1990; Provan, Fish, & Sydow, 2007). Collective action thus forms an intermediate level between the decisions of individual actors, in our study, organizations, which can or cannot adopt the standard, and the overall systemic level, in our study, the interorganizational network, at which the diffusion of the standard is reflected. When collective action stands at the beginning of a standardization process, it can be an initial impulse or trigger that sets a self-reinforcing process in motion (Arthur, 1989; Meyer & Schubert, 2007; Sydow, Windeler, Müller-Seitz, & Lange, 2012). For interorganizational networks, we conceive this process as a contagion process in which the new standard will spread in the network characterized by existing partnerships between organizations. Due to the heterogeneity of the actors and the diversity of their interests, it must be assumed that the spread of the standard from one partner to another has different thresholds.

Against this background, it is important to understand how collective action can be made as efficient as possible, so that a small or powerful group can help the standard to achieve scaling on a broad scale. Although a broad literature from economics and organizational theory deals with collective action problems, the strategic influencing of standardization processes is not yet fully understood. There is consensus that joint action may allow to “mobilize a collective despite resistance and inertia” (Garud and Karnøe 2001: 6). Furthermore, a large body of literature also stresses the importance of networks in the pursuit of collaborative interests (Gulati, Nohria, & Zaheer, 2000; Powell, 1990; Powell, Koput, & Smith-Doerr, 1996; Provan et al., 2007). Examples are strategic alliances (Dyer, Kale, & Singh, 2004; Reuer, 2004), partnerships for marketing (Gerlach, Cleophas, & Kliewer, 2013; Hu, Caldentey, & Vulcano, 2013), or new product development (Pavlou & El Sawy, 2011), as well as other forms of horizontal or vertical collaboration (Sydow, Windeler, Schubert, & Möllering, 2012). These interorganizational network structures not only open up but also foreclose viable development paths on the network level (Burger & Sydow, 2014; Schmidt & Braun, 2015). In particular, existing network structures are “pipes and prisms” (Podolny, 2001). They act as conduits to disseminate ideas and innovations (Galaskiewicz & Wasserman, 1989), but at the same time they reflect existing dependencies (Sundararaja, Provost, Oestreicher-Singer, & Aral, 2014). Thus, new standards must overcome the inertia and resistance of existing relationships so that collective activities can eventually succeed.