Network governance: A cross-level study of social mechanisms, knowledge benefits, and strategic outcomes in joint-design alliances

• The processes and outcomes of network organization are investigated.
• Eight dyadic joint-design alliances and 14 collaborative projects within them are analyzed.
• A cross-level model of how a system of social mechanisms influences value creation in alliances is advanced.
• Different social mechanism can enhance different knowledge benefits of interorganizational collaboration.
• The system of social mechanisms should be understood and managed as a whole.

Drawing on multiple-level embedded case study research of eight dyadic joint-design alliances and 14 collaborative ventures within them, this study sheds light on how value, in the form of common and private benefits, is created in interorganizational relationships. To do so, I focus on network governance (i.e., interorganizational coordination based on social networks) and its outcomes. As a result, I advance a cross-level model of how a system of reciprocally influencing network-level (i.e., structural) and dyad-level (i.e., relational) social mechanisms affects the propensity of allied organizations to engage in knowledge-intensive activities that yield considerable knowledge-based benefits and strategic outcomes at the alliance and firm levels. I conclude that simultaneous consideration of structural and relational embeddedness can enrich our understanding of network-based forms of organization and their impact on the outcomes of interorganizational cooperation. Although the system of social mechanisms needs to be understood as an interconnected whole, practicing alliance managers are advised to leverage different social mechanisms depending on the specific knowledge benefits they intend to achieve.