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Imitation is a key learning mechanism for inventions. What are the conditions that favor learning by imitation? A perspective of social networks focuses on the effect of connectivity on knowledge outcomes. A geographical perspective focuses on the spatial dimension of social relations and the role that physical contiguity plays in knowledge creation. These perspectives have largely been used separately. This chapter’s authors investigate the interactive effect of connectivity and spatial proximity on mechanisms of learning, arguing that connectivity among firms facilitates purposive collaboration and forms of friendly imitation, whereas spatial proximity also enhances mutual visibility among even disconnected firms, raising the incentives for unfriendly forms of rival imitation. The case study demonstrates that the co-occurrence of connectivity and colocation facilitates both friendly and unfriendly practices of imitation. The social tensions that emerge from unfriendly imitation are mitigated by social conventions and sanctions and thus help realize individual long-term collective opportunities.
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269© The Author(s) 2017
J. Glückler et al. (eds.), Knowledge and Networks, Knowledge and Space 11,
DOI 10.1007/978-3-319-45023-0_13
Chapter 13
Connectivity in Contiguity: Conventions
and Taboos of Imitation in Colocated
Networks
Johannes Glückler and Ingmar Hammer
People and organizations learn from others. Cultures, traditions, opinions, behav-
iors, and technologies spread through imitation. Tarde (1903) was among the first to
appreciate imitation as a key learning mechanism for inventions in social life to be
diffused among society (Kinnunen, 1996; Rogers, 1995). Imitation, however, is not
confined to the mere replication of existing knowledge. The process of imitation
always implies potential deviation into invention (Barry & Thrift, 2007; Djellal &
Gallouj, 2014) because the absorption of new knowledge requires learning and,
hence, conscious recombination of knowledge, an activity that may lead to new
ideas and new knowledge. Imitation is thus a crucial learning mechanism and a
valuable source of innovation.
If imitation is such an economic advantage, then what are the conditions that
favor learning by imitation? Essentially, two powerful perspectives—social net-
works and geography—have been proposed and used to unpack mechanisms of
learning. Social networks focus on the quality of social relations and the effect of
connectivity on knowledge outcomes. Geography focuses on the spatial dimension
of social relations and facilitates theory development on the role that physical con-
tiguity has in knowledge creation and innovation. Both these bodies of literature
have contributed greatly to the understanding of the interorganizational production
of knowledge, but few studies have integrated these viewpoints to capture the inter-
dependencies of networks and space (Glückler, 2013a).
In this chapter we combine the network and geographical perspectives to theo-
rize on the interactive effect of connectivity and spatial proximity on mechanisms of
learning. We specifically examine social tensions generated by imitation among
firms that are simultaneously in processes of colocation and organizational integra-
tion. This tension arises from the potential conduciveness of different spatial and
J. Glückler (*) • I. Hammer
Department of Geography, Heidelberg University,
Berliner Straße 48, 69120 Heidelberg, Germany
e-mail: glueckler@uni-heidelberg.de; hammer@uni-heidelberg.de
270
organizational configurations to different forms of learning. Organizational integra-
tion, for example, typically supports the institutionalization of conventions of col-
laboration and two-way learning, whereas spatial proximity increases the visibility
and observability among actors and thus leverages the undeniable incentive of com-
petitive, one-way learning. If colocated competitors have agreed to collaborate, the
key question arises as to how firms manage the tensions of cooperation and compe-
tition that accompany collective learning.
We begin by discussing imitation and invention in terms of the opportunities and
relative advantages each can offer to learning and innovation. Specifically, we adopt
a perspective of social conventions to distinguish two practices of imitation: the
convention of collaborative learning through friendly imitation and the taboo of
unfriendly imitation in a context of rivalry. We then analyze the conditions govern-
ing different forms of spatial organization for interfirm collaboration and imitation
processes before we present the research strategy of the mixed-method network
case study
Comra.de,
an organized interfirm network of 25 new media technology
companies in eastern Germany. We follow up with an analysis of the empirical find-
ings on the various mechanisms of interorganizational learning and the imitation
practices between convention and taboo. The chapter closes with a discussion of the
consequences for network governance.
Innovation by Imitation
Inventions are often the result of planned research and development. Although the
directed search process may not always lead to the expected outcomes, as is the case
with serendipitous and “false negative” inventions (Chesbrough, 2003, p. 3),
research and development activities frequently entail high costs, risks, and long
development phases. Innovation studies suggest that high levels of research and
development intensity, that is, the allocation of major resources to inventive activity,
are strongly correlated with a firm’s economic performance (Ahuja, 2000;
Mansfield, Rapoport, Romeo, Wagner, & Beardsley, 1977). Small and medium-
sized enterprises (SMEs) often try to compensate for their diseconomies of scale by
building alliances. In network organizations or, more precisely, organized interfirm
networks (Glückler, Dehning, Janneck, & Armbrüster, 2012), firms are able to
jointly develop resources that they would not be able to develop alone. So-called
network goods are one way to achieve common goals that would be unattainable
without partners. Essentially, network goods are collective outcomes from collab-
orative effort and have the additional advantage of being available to all members of
a given social group regardless of their individual contributions to the creation of
those goods (Glückler & Hammer, 2015). Because innovation refers to the process
of introducing and disseminating new solutions on a market (Akrich, Callon, Latour,
& Monaghan, 2002), it does not depend on invention alone. Instead, the process of
imitation by observation offers an additional opportunity to learn from other orga-
nizations and to adopt and create new knowledge.
J. Glückler and I. Hammer
271
Jacobs (1969) draws on car-maker Henry Ford to illustrate that imitation or, as
she calls it, “economic borrowing” (p. 64), can be a promising, often successful path
to innovation. Instead of building cars himself, Ford focused on assembling pre-
manufactured components. His innovation was not to create a new car but rather to
offer to supply each individual component as a replacement part. In a continuing
imitation process, he went on to build more and more parts himself until his com-
pany finally produced the majority of parts for his famous Model T. Japanese indus-
try also applied imitation strategies to adopt external technologies, gradually
developing its own competitive technological advantage (Bolton, 1993). The suc-
cess of the Swiss watch-making industry is also the result of an intense period of
imitation and reverse engineering of French and English watches in the seventeenth
century (Maillat, Lecoq, Nemeti, & Pfister, 1995). Moreover, imitation is not only
helpful for followers to catch up within an industry, it is an effective mechanism
enabling cross-industry innovation (Enkel & Gassmann, 2010). When firms have
sufficient absorptive capacity, they may detect and transfer to their own industry
good practices and solutions from related and even unrelated industries. It is this
unforeseeable potential for learning by imitation that makes the diversity of a city
so crucial for long-term innovativeness (Jacobs, 1969).
The imitation process comprises three key mechanisms (Malmberg & Maskell,
2002): variation, observation, and imitation. It starts with variation stemming from
parallel experimentation and the distributed search for innovations: “the tendency to
variation is a chief cause of progress” (Marshall, 1890, p. 355). A firm’s ability to
compete derives from the heterogeneous nature of the solutions that firms create
based on different competencies, experiences, strategies, and resources. To attain
this competitiveness, firms need to create new solutions and new combinations of
existing solutions:
“Little progress would be made in a world of clones” (Lundvall & Maskell, 2000, p. 364).
“The blind-variation-and-selective-retention model unequivocally implies that, ceteris pari-
bus, the greater the heterogeneity and volume of trials the greater the chance of a productive
innovation” (Campbell, 1960, p. 395).
If there is great variety in the available practices, organizations have the opportu-
nity to identify suitable solutions by using a process of attentive searches and obser-
vations, and in the final stage they can transfer this knowledge to their own company
by imitating them.
Unlike the generation of knowledge in partnerships, imitation refers to the uni-
lateral transfer of existing solutions from one company to another. Imitation offers
savings when established practices are transferred. Imitation cuts the costs of typi-
cal trial-and-error used in the research process (Jacobs, 1969). We distinguish
between two fundamental situations for imitation (Glückler, 2013a). With friendly
imitation, there is a cooperative transfer of solutions, with the owners of the solu-
tions voluntarily agreeing to transfer them or even actively transferring them out-
right. With unfriendly imitation, the owners of the solutions try to prevent their
imitation or disapprove of any secret imitation. In this section we investigate the
circumstances under which imitation processes in a network are viewed as either
13 Connectivity in Contiguity
272
legitimate and accepted (sometimes even planned) or as contested or sanctioned.
Both forms of imitation, friendly and unfriendly, reflect the diametric opposition of
competition and cooperation in a network.
Conventions of Friendly Imitation
In a cooperative context we assume that organizations and their members establish
conventions to regulate the process of friendly imitation. Observing the good prac-
tice of others, and actively seeking and requesting aid when transferring existing
solutions is accepted as legitimate or even as the actual reason for the cooperation if
the current owner permits a solution to be imitated. According to (Weber, 1922/1978)
conventions fall on a continuum extending from formal law to traditional customs
and habits: “an order will be called convention so far as its validity is externally
guaranteed by the probability that deviation from it within a given social group will
result in a relatively general and practically significant reaction of disapproval”
(p. 34).
A convention ranges between social custom and law: Unlike deviation from cus-
toms, deviation from convention is sanctioned; unlike law, a convention lacks an
authority that enforces compliance to it. A convention thus constitutes an institu-
tional order for exchange between parties to a transaction, creating a mutually sound
basis for expectations. This order cannot penalize violations of the convention
through the force of law. Instead, it uses social disrespect. Practices of friendly imi-
tation always occur when one firm takes information or solutions from another firm
with the latter’s approval. These resources may even be actively provided, often
without any direct compensation. That kind of transfer to a partner corresponds to
the economic principle of a gift (Ferrary, 2003), a type of generalized exchange in
which a transfer is not compensated directly but rather reciprocated over the long
term, possibly also by other partners (Yamagishi & Cook, 1993). Examples of
friendly imitation practices—processes that could lead to imitation—include rec-
ommendations, the exchange of experience or knowledge between employees
within and between companies, and specialist discussions at trade fairs.
A key factor in maintaining long-term friendly imitation is the convention of
reciprocity (Gouldner, 1960). Unlike goods traded on the market, gifts provided in
networks can seldom be assigned a cash value, and that value often cannot be clearly
allocated after the exchange. As a rule, reciprocal treatment (Stegbauer, 2011) is of
fundamental importance in the convention of friendly imitation. Imitating without
authorization or without providing anything yourself violates the convention.
Conventions of friendly imitation are the foundations for learning and the rapid
adoption, recombination, and dissemination of ideas and solutions within networks.
Ultimately, each organization benefits from the solutions from all the other partners
in a network, an outcome that offers cost advantages over the long-term innovation
process. Imitation without immediate interaction may even forge the creation of
J. Glückler and I. Hammer
273
collective identity, as Staber (2010) has demonstrated for colocated firms in south-
ern Germany.
Imitation practices can always develop if firms and their employees cooperate
with each other or if meetings offer opportunities for mutual observation. For exam-
ple, projects are key drivers in imitation processes when companies jointly develop
new knowledge and learn from each other, pooling their expertise to arrive at joint
solutions. With concrete project results constantly accumulating in the company
(Ibert, 2004), it should be easy for the project partners to integrate knowledge from
other organizations in the firm’s own knowledge base. Additional key ways in which
imitation occurs are employee fluctuation and assignment of employees to multi-
company project teams. When employees change their place of work, they contrib-
ute their own expertise and solutions to the new company (Malmberg & Power,
2005). As part of the European TSER project, Storper (1999) identified employee
mobility as the most important mechanism for the regional exchange of knowledge
between companies. In addition, the opportunities for imitating existing solutions
are highly varied and are facilitated, for example,
through skilled labour mobility within local labour markets, customer-supplier technical
and organizational interchange, imitation processes and reverse engineering, exhibition of
successful “climatisation” and application to local needs of general purpose technologies,
informal “cafeteria” effects, complementary information and specialized services provi-
sion. (Camagni, 1991, p. 130)
The Taboo of Unfriendly Imitation
The conventions of friendly imitation are based on agreement and long-term reci-
procity between the partners. There are mutually shared behavioral expectations
with which network members comply in order to be accepted in the network perma-
nently. If a network member transgresses these conventions, the network members
will at least disapprove of this behavior and may even sanction it by excluding the
member from communication within the network (Weber, 1922/1978). However,
the processes for imitating time-tested solutions are certainly not linked to coopera-
tion: “[N]o trust is required as a prerequisite for learning. The sequence of variation,
monitoring, comparison, selection and imitation can take place without any close
contact or even an arm’s-length interaction between the firms” (Maskell, 2001,
p. 930).
In these situations specific observation methods such as reverse engineering or
other noninteractive spillover effects (Glückler, 2013a) certainly enable firms to
imitate and employ tried-and-trusted solutions and innovations from other firms
without their agreement and knowledge (Minagawa, Trott, & Hoecht, 2007). This
unapproved acquisition of knowledge is what we call unfriendly imitation.
Unfriendly imitation violates the convention of eliciting the owner’s agreement
when adopting solutions from someone else. Although unfriendly imitation is con-
13 Connectivity in Contiguity
274
sidered illegitimate by the originator of the idea or practice, it is still legal as long as
it does not violate any intellectual property rights. In these situations firms cannot
influence imitation and the use of their own knowledge by other organizations. In
open competition and rivalry, unfriendly imitations do not violate any convention
pertaining to cooperation, loyalty, or reciprocity, and firms simply have to accept
that fact as a general environmental condition.
By contrast, unfriendly imitation is socially forbidden in cooperative relation-
ships. However, the existence of cooperative or trusting relationships between
members of a network reinforces the risk of unfriendly imitation. If actors trust in
the cooperation and the joint work in which they are engaging, they are inclined to
disclose much more about themselves than they would to competing firms with
which they have no cooperative relationship. As more information is discovered, the
risk of unfriendly imitation thus becomes greater in cooperative relationships than
in open competition. This argument has its roots in the observation that the greatest
damage from abuse can only arise under conditions of trust (Granovetter, 1985).
Within cooperative relationships the gravity of this potential harm has institutional-
ized unfriendly imitation as a taboo that should not be broken given the prevailing
conventions.
The Geography of Interfirm Relationships
The importance of the processes described above for cooperative and rival learning
varies according to the underlying conditions for cooperation. The geographic con-
text, for instance, figures prominently in rival learning in particular, affecting the
capacity to exploit opportunities for imitation. The following section distinguishes
between three geographic situations—clusters, organized networks, and the special
form of colocated network organizations—bearing on interfirm relations that play a
key role in discussing cooperative and rival learning (Fig. 13.1).
Fig. 13.1 Geographic organization of cooperation: Clusters, organized networks, and colocated
network organizations (From Glückler et al. (2012, p. 168). Reprinted with permission of Springer)
J. Glückler and I. Hammer
275
Cluster
The cluster concept is associated with two elementary components in the definition:
a geographical concentration of firms and a functional interrelation between them.
Porter (1998) defines geographic clusters as regional concentrations of interlinked
companies that perform similar activities in a common field. These two defining
elements need to be assessed separately. Local concentration gives firms traditional
localization advantages deriving from the joint use of infrastructure, labor markets
and specialized services. The greater the number of a location’s firms that require
specialist employees, the cheaper and more probable it is that a corresponding seg-
ment of the labor market will form. These traditional localization advantages result,
in particular, from external economies of scale. Local externalities evoke the theory
of the club good (Buchanan, 1965), a reminder of why geographic concentrations
are often referred to as regional club goods (Capello, 1999). The localization advan-
tages work irrespective of any interorganizational action and require only that sev-
eral firms with the same activities be colocated (Malmberg & Maskell, 2002).
The second part of the definition distinguishes between the narrow and the wide
senses of the term cluster. The former predicates not only a geographic concentra-
tion but also functional links between the firms in a cluster. Concepts for industrial
districts (Belussi & Pilotti, 2002; Sforzi, 1989) or the creative milieu (Maillat,
1998), for example, note the importance of cooperation relationships that benefit
from their proximity and that are often based on trust (Bathelt, 1998). One can use
transaction-cost theory (Scott, 1988) and the embeddedness approach (Uzzi, 1996)
to argue that geographic proximity reduces communication costs and that face-to-
face communication promotes the development of binding, trusting, and reciprocal
relationships (Sabel, 1994). In this regard learning processes are due, in particular,
to cooperation between local companies along the value chain. Despite the plausi-
bility of the argument, the tendency for a firm to cooperate is often just as strongly
geared to partners outside its cluster as to those within it. Empirical studies such as
the software cluster in Darmstadt, southern Germany, show that lead firms and tech-
nology SMEs in the region attach substantially greater importance to strategic alli-
ances with partners outside the region than to local opportunities for cooperation
(Angelov, 2006). It is clear that functional links in a cluster are not as strong or
important as supposed in traditional concepts.
Firms in a cluster are consequently a concentration of related activities based on
a social division of labor between different stages of the value chain and in competi-
tion within the same stage. Malmberg and Maskell’s (2002) knowledge-based the-
ory of clusters thus incorporates the concept of rival learning. The two researchers
explicitly explore the relative advantage of having a multiform cluster rather than a
single integrated firm in one place. In the case of full internalization, a single firm
could exploit internal economies of scale through the reduced unit costs of large
production capacity, minimize external transaction costs through an authority-based
governance mode, and smoothly organize the transfer of knowledge under a regime
of hierarchical control. By contrast, multiple and colocated firms engaging in
13 Connectivity in Contiguity
276
parallel and rival experimentation are more likely to generate variations of tech-
niques and solutions that would be impossible within a single firm because of the
common vision and corporate coherence it needs. This variety increases the oppor-
tunities for each firm to identify and imitate successful practices by attentively
observing their competitors (Malmberg & Maskell, 2002; Malmberg & Power,
2005).
There are various mechanisms to promote observation and imitation. One is
learning-by-hiring (Song, Almeida, & Wu, 2003), another is the adoption of new
information and ideas from the “local buzz” within a communication ecology
(Bathelt, Malmberg, & Maskell, 2004). Cluster structures favor competition and
rivalry in these ways because competitors operate under the same environmental
conditions, meaning that none can credibly claim any advantages—or excuse lag-
gardness—deriving from external factors (Porter, 1998). Consequently, competition
for innovation focuses purely on a firm’s ability to develop new solutions and launch
them on the market. Geographic proximity grants many competitors increased vis-
ibility and thus a greater opportunity to imitate new solutions more quickly than is
likely for a spatially isolated firm. There was once a time when urban variety and
density were considered the drivers of imitation and the recombination of existing
knowledge in other sectors or functional areas and when the city was seen as the
driver of economic innovation (on both counts see Jacobs, 1969). More recently,
however, proponents of cluster approaches (Malmberg & Maskell, 2002; Porter,
1998) note that rivalry, observation, and imitation under the same local underlying
conditions can also be the source of innovation for local production systems outside
cities and urban regions. Unlike the concept of the industrial district, which high-
lights interactional collaboration, the concept underlying cluster approaches bases
learning on noninteractional rivalry. In addition, rival learning can explain why
firms in clusters enter into so few formal cooperations (Malmberg & Maskell, 2002;
Angelov, 2006).
Organized Network
Unlike regional clusters, which are often only loosely linked, the organized network
focuses on actively coordinated interfirm cooperation. We define an organized net-
work as a voluntary and purposive association of members that aligns the multilat-
eral collaboration between a finite number of independent organizations with a
collectively shared utility (Glückler, 2012). Organized networks serve to generate
cooperation gains and external savings. They are an organizational instrument for
constantly reinforcing the competitiveness of the individual members (Araujo &
Brito, 1997). This networking makes it possible to recombine various kinds of
knowledge, something that no individual member would achieve in its entirety (von
Hayek, 1945; Inkpen & Tsang, 2005). The tendency to cooperate enables corporate
networks to offer a backdrop for cooperative learning; they jointly generate knowl-
edge with friendly imitation.
To use the advantages of this cooperation jointly, rules and organs through which
to implement them are developed by the members as part of their network gover-
J. Glückler and I. Hammer
277
nance. Members undertake to meet the expectations in the network, which are based
on formal, contractual rules and standards and on established and collectively
shared conventions. Particular importance is attached to the conventions. A member
cannot just opportunistically use the knowledge of other members against their will
and for his or her own purposes without violating the convention and having to fear
sanctions. Violating a relationship of trust in networks implies far greater conse-
quences than simply the disapproval of the damaged partner. If joint associated third
parties find out about A’s opportunistic behavior with B, then B as well as all of the
other partners lose their trust in A (Glückler, 2001). Even though conventions have
no legal character, their violation entails the risk of being shunned by the commu-
nity or even excluded from it (Weber, 1922/1978). Hence, interfirm networks offer
a suitable backdrop for cooperative learning in which practices of unfriendly imita-
tion are not only illegitimate but effectively sanctionable.
Colocated Network Organization
The third context of geographic organization is the locally organized network. It
includes features of both learning processes, that is, friendly and unfriendly oppor-
tunities for imitation. Outside the strategic alliances established in the network, the
physical proximity of local companies makes for unplanned personal contact (Rallet
& Torre, 1999) and many other forms of mutual observation, often dubbed local
buzz (Bathelt et al., 2004). The simultaneity of geographic proximity and coopera-
tive relationships allows both friendly and unfriendly imitation, albeit in the context
of a network based on conventions and rules, which sanctions unfriendly imitation
more strongly than in a geographic cluster. Misbehavior can thus be identified and
sanctioned with relative ease. Locally organized networks constitute a special type
of organized network. They link the advantages of physical proximity with the
advantages of organized cooperation in developing and disseminating innovations.
The following empirical case study on a network addresses the central issue of colo-
cated network organizations: the perception and regulation of the diametric opposi-
tion that results in locally organized networks when the opportunities for unfriendly
imitation benefit from physical proximity and when opportunities for friendly imita-
tion benefit from cooperation.
The
Comra.de
Network Case Study
Comra.de
: Ideal Type of Local Interfirm Network
Comra.de
is an organized network of 25 technology SMEs that offer solutions and
services for e-commerce and the new media market. The network was established
in response to the crisis at
SellSoft
.1 Sellsoft had held a leading market position in
1
SellSoft
is a pseudonym for a large technology company on the new media market.
13 Connectivity in Contiguity
278
the German e-commerce business until the New Economy’s bubble burst in 2003.
The upheaval led to mass dismissals of employees, many of whom eventually found
new jobs through a transfer company. The head of the human resources department
at that time wanted to offer the former employees new perspectives and encourage
them to form their own companies. The easy access to infrastructure (e.g., office
rentals and state-of-the-art communication technology) and continual professional
exchanges were particularly important in this regard. From the outset, these activi-
ties took place in a highly concentrated geographic area, a common office building
that also houses
SellSoft
. In 2005 the firms then officially adopted the legal form
of a cooperative, and the network was formed as an organization. By 2010,
Comra.
de
had grown from the initial 26 employees to 351 employees. Over the same
period,
SellSoft
shrank from more than 1200 to 275 employees, making
Comra.
de
larger than its former parent.
Comra.de
was created without public subsidies, purely on the private initiative
of the shareholders. As a type of network organization, the cooperative offers the
advantages of binding its members more strongly than an association, but it is not as
hierarchically structured as a GmbH (German public limited company). The net-
work is formally governed by the executive and supervisory boards. A member
company takes on the role of network spokesperson, and membership is due to the
purchase of units in the cooperative. Each member has one vote, which means they
have equal voting rights. This formal governance structure guarantees the members
sufficient flexibility and independence. In addition to the cooperative rental of the
office property, the individual companies reap collective benefits from bundling
specialist expertise to solve complex tasks and from pooling capacity to process
larger orders. As a result, the cooperative can work on the market as an end-to-end
provider with the greatest possible bandwidth and, for example, pursue joint mar-
keting activities and receive improved purchasing conditions.
Within the cooperative the member firms specialize in different areas of compe-
tence, such as developing software for online shops, mail-order solutions, mobile
applications, online marketing, and Web design. These competencies are offered to
SMEs and large enterprises alike. In addition, the network operates as an e-business
service provider for other cooperatives. In 2007,
Comra.de
recorded revenues of
17.5 million, up 80 % from the previous year. This figure was the largest percent-
age increase in revenues the network had yet achieved. In the following year, reve-
nues totaled 18.1 million; in 2009, 19.2 million (Beck, 2011).
Method
Comra.de
agreed to participate in a network case study from May 2010 to
September 2011. In preliminary discussions the spokesperson reported a series of
problems and challenges for work in the network, which finally led him to agree to
a scientific investigation of organized networks as part of the research consortium
krea.nets (Glückler et al., 2012). The method for the study was based on the
J. Glückler and I. Hammer
279
procedure for situational organizational network analysis, SONA (Glückler &
Hammer, 2012), which integrates qualitative and quantitative research methods in
six consecutive phases. The case study was based on expert interviews2 with four
company owners and the network spokesperson, who with his own company is also
a member of the network. A customized network questionnaire was prepared from
the interviews and offered to all of the network members for a standardized network
survey. Of the 25 members invited, 20 participated in the study, a return rate of
80 %. The data collected in the survey was then evaluated with methods of social
network analysis (Borgatti et al., 2002). The results of the network analysis and the
interviews with the individual network members were presented and discussed at
one of the monthly shareholder meetings to ensure communicative validation of our
findings. The empirical research and data collection is based on joint contributions
by Beck (2011) and Hammer, Beck, and Glückler (2012).
Results
Breaking Taboos
Friendly imitation is based at least on goodwill, and often also on active support in
transferring existing solutions to another network member. If companies violate this
convention through secret, unagreed-on imitation, then conflicts in the network are
inevitable. But what does breaking taboos look like when it comes to unfriendly
imitation? The case of
Comra.de
illustrates the breaking of a taboo. The members
of the
Comra.de
network share information on the current trends in the e- commerce
sector. In late 2010 social network technology was a major issue, so members dis-
cussed how
Comra.de
could further hone its profile in this area and generate addi-
tional benefits for the network. The discussions led to the idea of developing
software that would link online shops with the most frequently used social networks
in the Internet, without this connection having to be initiated. Three of the member
firms decided to collaborate on a project and jointly implement this idea with a fin-
ished product. A fourth member firm observed their activities and broke the taboo.
At a trade fair it published a press release stating that it, together with a major com-
petitor outside the
Comra.de
network, would be the first provider to launch a stan-
dard shop for social networks on the market. However, this member had never
worked together with the original developers or supported the joint development:
The fourth member did that alone, was not involved in the design and development, and
didn’t say a word to anyone—“pssst”—and did this secretly with
SellSoft
, and then pub-
lished the press release on this subject without saying anything to us beforehand. (Member
of the original development group, November 2010)
2 All of the interviews were recorded, transcribed, and coded with MAXQDA.
13 Connectivity in Contiguity
280
It was not the first time that this member had used rival learning against other
members of the network. The chief executive had already attracted attention on
several occasions in the network with his noncompliant activities. The members had
repeatedly informed the entrepreneur that his behavior violated the conventions of
cooperation they had agreed on at one of the cooperative’s monthly meetings. In
personal discussions, other members attributed the “persistence” of this unfriendly
imitation to a lack of sanctions on such behavior and the ineffectiveness of the dis-
approval of actually engaging in opportunism. Nevertheless, no attempts were made
to exclude this member from
Comra.de
:
This is the legendary black sheep who will always be a black sheep. The fact that this com-
pany has a very similar level of knowledge makes this process [of imitation] much easier. I
am concerned, once again, about this action. At some point or other he will have to learn—
and yet apparently we haven’t made a major impression—because he has never been thrown
out. OK, he’s a tenant here, he has a whole floor. If we throw him out, then we have a
problem. He won’t cease to exist in a city like this, either. He’ll still be there. Until now, we
thought that we would [keep] that crazy guy under control, give him a bit of guidance and
influence him. (Network spokesperson, November 2010)3
The analysis of the interviews suggests two findings. First, although the deviant
firm imitated a potential economic product from its network colleagues, a formal
exclusion was not possible. According to the network policy that had been formal-
ized and circulated among all members, competition between network members
must not be hampered under any circumstances. Technically, the instance of
unfriendly imitation was not a violation of codified rules, for the perpetrating firm
produced its solution with own resources and partners for their own, separate cus-
tomer. Second, the consequences of excluding the deviant firm from membership
would have been more serious for the rest of the network than for the black sheep.
Thus, the other members decided to maintain membership but to withdraw from the
conventions of cooperation, that is, of exchange knowledge and friendly imitation.
If they stopped knowledge exchange with the black sheep, they would still benefit
from observing its activities as long as that member continued to have its offices in
the same building as they did. The members thereby sanctioned the taboo-breaker
not by formal exclusion but by articulated disapproval and soft exclusion from inter-
nal forms of cooperation: They no longer invited that member to joint activities and
excluded it from open knowledge exchange and collaborative projects. Moreover,
that member was suspended from the “cafeteria atmosphere” at lunch time and from
unofficial management meetings. As one member firm reported, “[The black sheep]
will be isolated, and nobody will talk to them any more” (Interview, November
3 The term “black sheep” was used in this specific case of unfriendly imitation. Actually, both the
rule-breaking member and the network have been very successful in business. Whereas the net-
work relies on friendly imitation, the deviant member firm relies on a supply network consisting of
business firms outside
Comra.de
. At the time of our investigation in 2010 and 2011, this firm
reported 23 employees but had expanded to more than 100 people by the time of this chapter’s
publication in 2016. For lack of space in the joint office building, the member chose to resign from
the network to pursue its own business and growth strategies, upon which it had embarked in the
previous years.
J. Glückler and I. Hammer
281
2010). It is apparent from discussions with members of the network that violating
the taboo of unfriendly imitation results in perceptible sanctions against illegitimate
behavior, in particular through exclusion from the local communication ecology in
the network. But what are the consequences for the excluded firm? Does the black
sheep really experience disadvantages from soft exclusion?
Forms of Cooperation and the Consequences of Breaking
the Taboo
In the first meeting and in personal interviews, network members highlighted the
gains from collective learning among members. Employees often asked for assis-
tance, and they exchanged program parts, codes, and other technical or organiza-
tional solutions with employees from other member firms just across the corridor.
The physical proximity in the same building, together with the related activities of
the firms in the same field of technology, was found to be a powerful source of col-
laborative learning. The information revealed in the interviews was used to develop
a specific network questionnaire, which was then used for a network survey to cap-
ture all bilateral relationships across four distinct forms of cooperation among all
members of
Comra.de
(see Fig. 13.2).
The first form of cooperation in this multilevel network was the imitation-of-
solutions network. Firms in the network survey were asked to provide information
on the use and transfer of solutions from other members.
Over the past four years, have you introduced in your company new features or concepts
that were developed by other members of C
omra.de
? Please consider novelties such as
products, plug-ins, applications, code parts, marketing concepts, and organizational con-
cepts. If this was the case, which companies developed these new features?
The responses were used to construct a network in which each link denoted an
instance of one member imitating another member’s solution. This type of imitation
was of no legal relevance with regard to copyright violations. The companies freely
disclosed their knowledge, and the imitation constituted reuse of artifacts in soft-
ware or the company’s organization, which are very difficult to protect under law.
The second form of cooperation was the knowledge-exchange network. In the
interviews, members argued that network activities increased their opportunities for
imitation and information transfer. The companies reported that knowledge was
regularly exchanged both between employees and at a management level. Employees
and managers either held informal discussions in the corridors or specifically looked
for each other to obtain help and advice to solve concrete problems. On the basis of
these interview descriptions, the members in the network survey were asked to indi-
cate all partners who had helped them solve work-related problems, a proven survey
item that conveyed valid representations of the knowledge network in previous
studies (Glückler, 2008, 2013b, 2014; Glückler & Panitz, 2014).
13 Connectivity in Contiguity
282
A third form of cooperation practiced within the network was employee-lending,
that is, the temporary sharing of employees between the partner firms. Employees
were used in the partner companies as consultants. When required, they also helped
with the design of concepts for Internet purchasing systems. The amount of time
spent as a temporary worker varied greatly. Some consultants were lent only for a
specific project; others had been cooperating with the partner companies for several
years. Lending employees was a widespread practice in the
Comra.de
network.
The firms were then asked to state those members to which they had already
deployed employees over the last years.
Finally, the fourth form of cooperation was the project-cooperation network.
Network members were asked to state those partner firms with whom they had
Fig. 13.2 Four forms of cooperation in the
Comra.de
corporate network. From Glückler et al.
(2012, p. 177). The shaded circle highlights the position of the “black sheep” in the different forms
of cooperation. Reprinted with permission of Springer
J. Glückler and I. Hammer
283
repeatedly collaborated in concrete projects in the past.4 In professional software
engineering, particularly in the IT industry, it is standard practice to modularize
common project outcomes and reuse them in other projects. In the software industry
joint projects can become a key process for knowledge imitation because developed
project solutions such as programs, code, or parts of programs and code—so-called
code snipplets—can easily be reused in other projects.
The imitation network was the most highly fragmented of all the activities.
Slightly more than half of the members had already used concepts, plug-ins, or code
sections from other network members for their own operating purposes. This imita-
tion allowed the companies to save development time and to make solutions to
problems available in the company. Not only was friendly imitation as a network
activity at a moderate level in the network, it was also the activity with the fewest
relationships, the lowest density, and a comparatively low number of average rela-
tionships per network member (Table 13.1). The size and similarity of the member
companies were statistically unrelated to engagement in imitation among network
participants. In particular, the exchange of knowledge and the cooperation on joint
projects were the strongest network activities in
Comra.de
. They included the larg-
est number of members, the greatest density, and the largest number of
relationships.
What was the position of the deviant firm that had repeatedly broken the conven-
tions of the network? If the firm had really been sanctioned with disapproval and
exclusion from the communication and cooperation relationships, that status would
be reflected by a relatively peripheral or even isolated position in the network.
Indeed, according to its own response and the responses of the other members to the
items in the survey, the deviant firm was largely isolated from any activity. It did not
lend any employees to other members, receive any solutions from other companies,
4 To rule out other explanatory factors, we included many additional variables, such as the entre-
preneurs’ joint history, capital participations between member companies, and company prestige.
Later analysis showed all these variables to be insignificant, however, so we do not address them
in depth in this chapter.
Table 13.1 Four forms of cooperation in
Comra.de
Variables
Number of
network
components
Network
densitya
Number of
relationships
Relationships per
member (mean)
Imitation 9 0.04 17 0.85
Knowledge
exchange
7 0.10 38 1.90
Employee-lending 8 0.07 25 1.25
Project
collaboration
4 0.09 35 1.75
aNetwork density is calculated by dividing the number of observed relations by the number of pos-
sible relationships. Adapted from Glückler et al. (2012, p. 177). Reprinted with permission of
Springer
13 Connectivity in Contiguity
284
participate in any exchange of knowledge, or cooperate in projects. The company
was isolated especially from project work and was avoided by all three of the other
companies. However, the other members of
Comra.de
reported that the company
was a source of knowledge and imitable concepts and was a target for their own
employee-lending. Yet on the whole, the noncompliant firm occupied only a periph-
eral position in the network (Fig. 13.2).
What was the benefit of a peripheral location in an organized network? The
answer is quite simple: The physical proximity resulting from collective location in
one building meant that imitation could never be stopped even if communication
and collective projects and other work was very slow between the rule-breaker and
all others. Therefore, the black sheep’s continued membership let the other mem-
bers benefit from the increased visibility and monitoring of new technical and
industry-specific developments.
If there are regular exchanges between 26 or 27 companies, then you are much more on the
ball than if you were to be in the inner city with a team of 15 employees or in a commercial
zone. You would never get the same value there. And I certainly don’t mean that negatively,
but the value of fast exchanges, including at an employee level, that’s something we have
only here in the network. (Interview with a member of the
Comra.de
corporate network,
July 2010)
Despite the deviant firm’s opportunism, the other members exploited the advan-
tages of physical proximity and organizational membership. The fact that the taboo-
breaker still belonged to the network meant that they believed it legitimate for them,
too, to observe the company and to imitate its successful practices and solutions
without approval. On the whole, the network analysis confirms the sanctions of
disapproval detailed in the interviews, which were expressed by soft exclusion from
the various forms of internal cooperation rather than by exclusion from membership
altogether. The firm was thus forced into structural periphery of its relational activi-
ties. Despite the short-term advantage of unfriendly imitation, the violation of net-
work conventions must ultimately be viewed as negative on the whole. Breaches of
taboos place the culture of cooperation at risk, undermining the cooperative core of
a corporate network. In the following section we analyze the mechanisms of friendly
imitation, that is, the economic opportunities arising from the combination of con-
nectivity and contiguity.
Practices of Friendly Imitation
Conventions of friendly imitation are based on either approval or even active sup-
port of one firm’s reproduction of another firm’s solution. Discussions with network
members left no doubt that the different forms of exchange and cooperation were
geared to providing other parties with solutions in eventual or immediate exchange
for help and advice. The imitation network in Fig. 13.2 documents the results that
relationships have for friendly imitation, but it provides no information on the
enabling conditions. Network-related statistical methods can be used to investigate
J. Glückler and I. Hammer
285
whether the various forms of cooperation support imitation, with the imitation net-
work being the dependent variable. The results of a series of multiple network
regression models (MRQAP, see Krackhardt, 1988) have shown that bilateral proj-
ect cooperation and exchange of knowledge significantly increase the propensity of
two partners to learn from each other through successful imitation. Model 1 illus-
trates the significant positive association between knowledge exchange and success-
ful imitation (Table 13.2), a finding also reflected by an interview in which a network
member told of the effect that collaboration had had on imitation.
There is an online shop called Magento…, and all of these member firms that I just men-
tioned use Magento. There’s a lot of transfer here because the employees ask people, “Tell
me, have you already written a plug-in for Magento? It can do such and such.” And they say,
“Yes, we’ve done that.” (Interview, July 2010)
As with knowledge exchange, cooperation in projects also promoted imitation
between companies (model 2). In projects, knowledge from different companies
was merged and further developed to create new solutions. Companies reported that
the newly developed solutions were stored not in a joint program library, as is often
the case in the software industry or development syndicates, but rather in the com-
panies participating in the projects. This practice may be due to two facts: (a) the
use of standardized shop systems in the e-commerce industry, and (b) the use of
many different software systems. In the
Comra.de
network, for example, more than
six different shop systems were in use, with business firms mastering more than ten
different development environments if one includes programming language as well.
Therefore, the joint projects allowed the simplified development of specialist appli-
cations such as the use of new security systems on different standardized systems
that were equally used by a large number of companies. The new media industry
was characterized by standardization, modularization, and the accumulation of
knowledge. However, this knowledge was stored in and used by the individual com-
panies, not jointly (Grabher, 2004). Clearly, projects promoted the transfer of codi-
fied knowledge for the companies involved.
The fact that firms were engaged in employee-lending seems unrelated to the
probability of their learning from each other (model 3, Table 13.2). The multivariate
Table 13.2 MRQAP: Effects of forms of cooperation on the dyadic imitation of solutions
Variable Model 1 Model 2 Model 3 Model 4
Knowledge exchange 0.394** 0.370**
(0.042)a0.036)
Employee-lending 0.045 −0.170*
(0.047) (0.042)
Project collaboration 0.327** 0.292**
(0.038) (0.039)
adj. R20.153 0.105 −0.001 0.228
p0.000 0.000 0.319 0.000
aStandard deviations are in parentheses. *p < 0.05. **p < 0.001. N = 20 members, 380 observations,
5000 permutations. Dependent variable: imitation network. Adapted from Glückler et al. (2012,
p. 179). Reprinted with permission of Springer
13 Connectivity in Contiguity
286
model 4 encompasses all three levels of cooperation and confirms the combined
effects of knowledge exchange and project cooperation on imitation relationships.
In summary, we see that various levels of cooperation and prevailing conventions of
friendly imitation supported the transfer of solutions between members. This coop-
erative learning promoted the innovative abilities of the individual members and
was fostered in particular by the mutual exchange of knowledge between the com-
panies and their joint project work.
Conclusion
Although spatial contiguity and network connectivity have for the most part been
investigated separately for their role in knowledge creation, we have combined the
two perspectives to explore the opportunities and tensions that emerge from situa-
tions in which organized connectivity and spatial colocation come together. We
have argued that connectivity among firms facilitates purposive collaboration and
forms of friendly imitation, whereas spatial proximity also enhances the mutual vis-
ibility among even disconnected firms and thus increases the incentives for
unfriendly forms of rival learning and unilateral imitation. The case of
Comra.de
has illustrated how an organized business network’s members who are colocated in
an office building have experienced both friendly and unfriendly imitation. Our
analysis has shown the imitation of successful solutions from other members.
Variation leads to a superior position, and imitation gives the company a head start
when looking for new solutions. Even if the network promotes these collective gains
from learning, not all of the companies are equally committed to cooperation. In
particular, members learn from the partners with whom they have worked on earlier
projects and with whom they have repeatedly exchanged knowledge that can be
used in the company to solve work-related problems.
What are the consequences for the management of organized networks? Variation
and imitation in organized networks are an opportunity to reduce the individual’s
costs of continuous learning. This process can be actively supported if the firms
manage to share their knowledge and to work together on projects. As Dyer and
Hatch (2006) ascertained for the automotive industry, a mutual opening of the firm
is to the advantage of all of the partners. However, a convention of friendly imitation
is also an opportunity to develop excellent practices for developing common learn-
ing processes and, at a later stage, to establish network goods (Glückler & Hammer,
2015). Network goods in
Comra.de
could be joint program databases or organiza-
tional concepts for cooperation based on the division of labor. We argue that aware-
ness of the convention of friendly imitation is a fundamental requirement for
successful cooperative learning.
However, variation and imitation in physical proximity also allow spillover effects
from friendly imitation. One of these results was reconstructed in detail in the inter-
views with members. Unfriendly imitation is regarded as a breach of existing con-
ventions, and its effects quickly circulate among members (Coleman, 1988). In the
J. Glückler and I. Hammer
287
case of
Comra.de,
the sanctions have been expressed in collective disapproval
(Weber, 1922/1978) of the member who has broken a taboo. Although the network
management board or its shareholders at first refrained from tangible sanctions such
as formal cancellation of membership, the members practiced various forms of soft
exclusion leading to the deviant member’s isolation from most forms of cooperation.
That member ended up on the perimeter of the network for cooperative learning and
finally resigned from the network. The new prevailing semiconvention in the rela-
tionship with this member was legitimacy for both parties to pursue rival learning
practices. This case illustrates that interfirm collaboration involves a tension between
cooperation and competition, especially in situations of spatial colocation where the
actions of others are relatively observable and rather easy to imitate even against their
consent. The legitimacy of imitation is therefore highly institutionalized in terms of
conventions and taboos.
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J. Glückler and I. Hammer
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