Structural folds: The innovative potential of overlapping groups

Balázs Vedres, David Stark

Research output: Contribution to Book/Report typesChapterpeer-review

Abstract (may include machine translation)

Entrepreneurial groups face a twin challenge: recognizing new ideas and implementing them. Recent research suggests that connectivity reaching outside the group channels new ideas, while closure makes it possible to act on them. By contrast, we argue that entrepreneurship is not about importing ideas but about generating new knowledge by recombining resources. In contrast to the brokerage-plus- closure perspective, we develop a concept of structural folding and identify a distinctive network position, structural fold, at the overlap of cohesive group structures. Actors at the structural fold are multiple insiders, participating in dense cohesive ties that provide close familiarity with the operations of both groups. Structural folding provides familiar access to diverse resources. Firstly, we test whether structural folding contributes to higher group performance. Secondly, because entrepreneurship is a process of generative disruption, we test structural folding's contribution to group instability. Thirdly, we move from dynamic methods to historical network analysis and demonstrate that coherence is a property of interwoven lineages of cohesion that are built up through an ongoing pattern of separation and reunification. Business groups use this pattern of interweaving to manage instability while benefiting from structural folding. To study the evolution of business groups, we construct a dataset that records personnel ties among the largest 1,696 Hungarian enterprises from 1987-2001.

Original languageEnglish
Title of host publicationNetworks in Social Policy Problems
PublisherCambridge University Press
Pages60-79
Number of pages20
ISBN (Electronic)9780511842481
ISBN (Print)9781107009837
DOIs
StatePublished - 1 Jan 2012

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