Events

Prof. Christopher Rider
Thomas C. Kinnear Professor
Associate Professor of Entrepreneurial Studies
Ross School of Business
University of Michigan

We reconsider the relationship between an organization’s performance and its position within an inter-organizational network (i.e., the position-performance relationship). We contrast the notion of position as an advantage borne of superior capabilities with that of position as a privilege borne of superior opportunities. We then propose an analytical framework for decomposing the position-performance relationship into positional determinants and consequences. Analyzing data on new firms entering the U.S. venture capital industry’s co-investment network between 2000 and 2017, we reproduce the position-performance relationship associated with advantages in firm capabilities. We also demonstrate that, consistent with privileged opportunities, this relationship is attenuated by accounting for the ascribed (i.e., race, ethnicity, gender) and achieved (i.e., prior education and employment) characteristics of firm personnel at founding. We conclude with a discussion of the assumptions justifying advantage and privilege interpretations of the position-performance relationship.