Social capital, strategic relatedness and the formation of intraorganizational linkages

This paper investigates the evolutionary dynamics of network formation by a nalyzing how organizational units create new interunit linkages for resourc e exchange. Using sociometric techniques and event history analysis, this s tudy predicts the rate at which new interunit linkages are created between a newly formed unit and all the existing units in a large multinational org anization. Two important constructs: social capital, derived from the liter ature on social structure and network formation, and strategic relatedness, derived from research on diversification and the resource-based view of th e firm, are used to explain the rate of new linkage creation. Results show, that the interaction between social capital and strategic relatedness sign ificantly affects the formation of intraorganizational linkages. Copyright (C) 2000 John Wiley & Sons, Ltd.