How Vicarious Learning Shapes Firms’ Relationship Networks with Third-Party Experts

In some markets, firms can compete by forming relationships with experts outside the boundary of the firm—what we call third-party experts—who can serve to both legitimate the firm and influence demand for its products. Developing and maintaining relationships with these third-party experts is, however, a complicated endeavor and how they go about doing so is a core strategic decision for firms in these markets. Taking a network perspective (where we consider firms to have networks of relationships with third-party experts), and focusing on both tie formation and dissolution, we find that firms learn vicariously from their close competitors when determining whether to grow (or shrink) their relationship networks and which particular experts they should target. Furthermore, firms’ network-altering behaviors differ depending on whether a firms’ attention and resources are directed to relationships or are pulled toward an alternative strategic focus. Firms whose attention is focused elsewhere engage in less tie formation and tie dissolution but end up more reliant on what they learn vicariously from their competitors. This study contributes by highlighting how firms approach building relationships with third-party experts, by providing a dynamic perspective to firms’ strategic network building behaviors, and by generating further insight into the role that managerial attention and resource allocating play in shaping firm behavior.