The leveraging of a dual network as a distinctive relational capability. Evidence from three longitudinal case studies

This paper contributes to the rising debate on the strategic management of knowledge-intensive interfirm networks, taking the perspective of the firm that plays the leading role in the network (“central firm”), and stressing the importance of the central firm’s relational capabilities as a source of sustained competitive advantage. The paper deals with the following research question: How do central firms manage the structure of their networks, over time? The empirical basis consists of three longitudinal case studies of design-intensive furnishings manufacturers that successfully competed, over an approximately 30 years time span, by leveraging a network of dyadic, joint-design interfirm collaborative relationships with consulting industrial design firms. To answer the research question of this study, I initially advance a proposal for the operationalization of the strength of ties, encompassing both the amount of time spent by partners in the relationship, and the human and social contents that emerge from interactions. Afterwards, self-reinforcing processes of mutual knowledge, human and social contents development, and relation-specific investments, emerge as strengths of a network core of strong ties. Finally, I discuss the ability to create and preserve over time a “dual” network structure, as a distinctive relational capability of the central firm. I argue that managing an interfirm network so as to integrate a large periphery of diverse, weak ties into a network architecture based on a narrow core of strong ties, can provide fertile ground for central firms to gain competitive advantages, whose sustainability is primarily based on the resulting, dynamic innovative capability.