Contextual Factors

A variety of external and contextual factors can influence network effectiveness. For instance, the uncertainty and changes in the external environment can influence how a network functions and performs. The relationship can be a nonlinear, suggesting that networked organizations respond to and adapt to the changing environment (Turrini et al., 2010). Resource availability matters to a network because organizations in a network need resources to operate and coordinate. Scarce financial resources limit organizations from investing in interorganizational coordination. Another important environmental factor is the support that member organizations receive from the larger community (Guo & Acar, 2005). Social capital developed over past collaborations influence the trust building among member organizations and ultimately the performance of the network (Turrini et al., 2010).

Structural Characteristics of Networks

The size, age, and composition of a network influence its performance. As the network becomes bigger and more heterogeneous, the cost of coordination increases. On the other hand, large and heterogeneous networks may produce diverse ideas and solutions (Sandstrom & Carlsson, 2008). Yet, few empirical studies have systematically tested the direction of relationships between network composition, size, and age, and network performance (Turrini et al., 2010). Other structural characteristics of networks, such as formalization, stability, integration, closure, and clustering, can affect network performance. The formalization of networks enables the adoption of

152 Network Governance

Table 9.1 Factors Influencing Network Effectiveness

Three Groups of Factors

Variables

Brief Description

Contextual

Factors:

The influence of external environment

System stability

Changes in the external environment

Resource munificence

Resource availability to the network, such as financial resources

Cohesion and support from the community

Social capital, and community support

Structural Characteristics of Networks

Size of the network

The number of member organizations

Composition of member organizations

The diversity and heterogeneity of member organizations

Age of the network

The number of years network has existed

Formalization and accountability

Use of formal rules, organized meetings, and formal decisionmaking processes

Network inner stability

The length of management tenure and the level of competitiveness among personnel

Network integration

The degree of integration through density, centralization, or clique overlap

External control

The influence of constituents and stakeholders

Network

Functioning

Factors

Traditional management

Management competency and behaviors

Managerial networking behavior

Interactions with a diverse range of external stakeholder groups

Network management and leadership

Managerial behaviors to build commitment, steer the network process, address conflicts, and mobilize resources.

Network governance structures

Different modes of governance

Sources: Provan & Milward, 1995; Tumni et al., 2010; Raab et al., 2015

performance measures. Network stability (e.g., having committed management) also plays a positive role in achieving network effectiveness and network integration, as centralized coordination tends to promote network effectiveness (Provan & Milward, 1995; Turrini et al., 2010). Network closure—often measured by network density and centralization—influences network performance (Provan & Milward, 1995; Sandstrom & Carlsson, 2008). A centralized network enables organizations to establish priorities in a timely manner (Sandstrom & Carlsson, 2008). Yi’s research on clean energy governance networks suggested that network structures—both bridging (measured by the network-level average degree centrality) and bonding (measured by network-level average clustering coefficient)—contribute to job growth in renewal energy industry and state-level renewable energy capacity (Yi, 2018).

 
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