Below the tip of the iceberg: the co‐evolution of formal and informal interorganizational relations in the wireless telecommunications industry

We examine how alliances}formal, contractual interorganizational relations}co-evolve with emergent, informal interorganizational relations. To form alliances, firms must acquire information on potential partners, and the acquisition of this intelligence occurs through both formal and informal channels. Here we evaluate the effects of two of these informal channels: joint participation in cooperative technical organizations (CTOs) and director interlocks. Since director interlocks connect firms through the highest managerial levels while joint CTO participation connects firms through mid-level technical personnel, we examine whether each type of informal tie contributes to alliance formation as well as whether ties at multiple levels serve as complements or substitutes for this purpose. We also examine whether all types of ties}alliances, interlocks and CTO participation}co-evolve endogenously or whether there are more direct causal relationships between and among these various types of networks. We find that both interlocks and CTO participation facilitate alliance formation, yet interlocks only facilitate alliance formation when the common director serves as an officer in one of the firms. An additional distinction between the role of interlocks and CTO participation is that the relationship between interlocks and alliance formation appears endogenous, in contrast to CTO participation, which causally precedes alliance formation. Copyright # 2008 John Wiley & Sons, Ltd.