We combine theory and research on alliance networks and on new firms to investigate the impact of variation in startups’ alliance network composition on their early performance. We hypothesize that startups can enhance their early performance by 1) establishing alliances, 2) configuring them into an efficient network that provides access to diverse information and capabilities with minimum costs of redundancy, conflict, and complexity, and 3) judiciously allying with potential rivals that provide more opportunity for learning and less risk of intra‐alliance rivalry. An analysis of Canadian biotech startups’ performance provides broad support for our hypotheses, especially as they relate to innovative performance. Overall, our findings show how variation in the alliance networks startups configure at the time of their founding produces significant differences in their early performance, contributing directly to an explanation of how and why firm age and size affect firm performance. We discuss some clear, but challenging, implications for managers of startups. Copyright © 2000 John Wiley & Sons, Ltd.

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In this paper, we introduce performance feedback models to specify conditions under which organizations' decision makers are more (or less) likely to accept the risk and uncertainty of nonlocal interorganizational partnership ties rather than prefer embedded ties with partners with which they have either past direct or third-party ties. Learning theory suggests that organizations performing far from historical and social aspirations may be more willing to accept the uncertainty and risk of such nonlocal ties with relative strangers. An analysis of Canadian investment banks' underwriting syndicate ties from 1952 to 1990 supports predictions from learning theory and, in addition, indicates that inconsistent performance feedback (i.e., performance above either historical or social aspirations but below the other) triggers the greatest risk taking in selecting partners.

This research is supported by a grant from the Social Sciences and Humanities Council of Canada. For comments that greatly improved our work we are grateful to Don Palmer, three particularly astute and exceptionally helpful ASQ reviewers, Harry Barkema, Henrich Greve, Olav Sorenson, and workshop participants at CentER-Tilburg University, CKIR-Helsinki School of Economics and Business Administration, and Northwestern University. We also thank Whitney Berta, Jackie Hick, and Leisa Sargent for assistance with data collection and coding.We examine acquisitions by multiunit chain organizations to determine why they acquire a particular target rather than others that are available to them and thus better understand chain growth. We advance experiential and vicarious learning processes as an explanation for chains' next spatial move. Our analysis of Ontario nursing home chains' acquisition location choices from 1971 to 1996 provides broad support for a learning perspective, demonstrating how experiential and vicarious processes shape and constrain the locations of chains' acquisitions. Experiential processes lead chains to replicate themselves by acquiring components geographically and organizationally similar to their own most recent and most similar prior acquisitions and their own current components. Vicarious processes lead chains to imitate location choices of other visible and comparable chains' most recent acquisitions, prior acquisitions nearest to potential targets, and their current components. Our study thus establishes organizational learning as a conceptual foundation for predicting the location of a chain's next acquisition and, more generally, the spatial expansion of chains over time.-Although the chain organizational form arguably rivals the Mform as the twentieth century's most successful organizational form, organization theorists have only recently begun to study them systematically (e.g., Darr, Argote, and Epple, 1995; Ingram, 1996a, 1996b; Bradach, 1997). And although the chain form renders physical space a conspicuous variable, thus far, little attention has been given to the dynamics of chains' spatial expansion (Usher, 1995; Greve, 2000; Ingram and Baum, 1997a, 1997b, 2001). Yet chains' growth and spatial expansion patterns are inherently interesting and important from both organizational and societal perspectives. Chains are collections of service organizations, doing essentially the same thing, linked together into larger super-organizations (Ingram and Baum, 1997a). Often, geographic location is the only difference among a chain's components. Location is thus a critical strategic and organizational variable for chains. More generally, the spatial expansion of chains underlies the rise of an organizational form that is coming to dominate every service industry at the same time that service industries are becoming increasingly important to economies around the world.To date, research on chains' spatial expansion has been left primarily to economic geographers, who have produced an extensive cas...