This paper addresses whether cohesive networks of socially embedded ties or sparse networks rich in structural holes are more conducive to the success of new firms. We propose that the networks of emerging firms evolve in order to adapt to the firm's changing resource needs and resource challenges. As firms emerge, their networks consist primarily of socially embedded ties drawn from dense, cohesive sets of connections. We label these networks identity based. As firms move into the early growth stage, their networks evolve toward more ties based on a calculation of economic costs and benefits. This shift from identity‐based to more calculative networks is manifested in the evolution of the firm networks: (1) from primarily socially embedded ties to a balance of embedded and arm's‐length relations; (2) from networks that emphasize cohesion to those that exploit structural holes; and (3) from a more path‐dependent to a more intentionally managed network. Thus, this paper suggests that both cohesive and sparse networks are conducive to firm performance when they are aligned with and address firms' evolving resource challenges. Copyright © 2001 John Wiley & Sons, Ltd.

113Relationally embedded network ties influence the economic decisions of emerging firms and evolve over time. Evolutionary processes and paths of these ties are examined based on two research questions: How do components of social relationships facilitate the evolution of relational embeddedness? What are the different paths to relational embeddedness? Findings from qualitative case study methods suggest three evolutionary processes (network entry, social component leverage and trust facilitation), four evolutionary paths, and the conclusion that ties entering the network through personal relationship may evolve more quickly toward full embeddedness. Strategic implications for emerging firms are suggested regarding entrepreneurial opportunity recognition, resource acquisition and effective governance of relationally embedded ties.

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Assuming heterogeneity among relationally-embedded ties, this study focuses on their classification. Network ties embedded within social relationships influence economic actions and represent a strategic form of organizing for emerging entrepreneurial firms. Research questions include the following: (I) What are the components of the social relationships of relationally-embedded ties? (2) How can relationally-embedded network ties be classified to identify different types of embeddedness based on variations in the social relationships? (3) What strategic implications can be drawn from a multidimensional view of relational embeddedness? This study uses case study methods to examine external network ties of eight emerging firms in the computer industry A classification typology of seven types of relational embeddedness emerges based upon combinations of three overarching social components-personal relationship, dyadic economic interaction, and social capital. The typology suggests multidimensionality of both embeddedness type and intensity. The discussion addresses strategic outcomes of heterogeneity within relational embeddedness

This exploratorystudy examines empiricallyexpatriate performance appraisal (EPA)practicesforU.S. multinational firmsand assesseshowsuchpracticesrelateto the perceivedaccuracyof EPAs. Froma sampleof U.S.multinationals, theresultssuggestthata balanced set of ratersfromhostandhomecountriesandmorefrequent appraisals relatepositivelyto perceived accuracyof EPAs.Thedatasuggest,however, that most respondentfirms did not follow these practices.In addition, the use of standardized andcustomizedEPAevaluationforms relates negativelyto perceivedEPA accuracy.Implicationsof these exploratory findingsforresearchandpracticearealsodiscussed.Increasingly,expatriatemanagershave been viewed and used as strategic coordinationand controlmechanismsfor multinational organizationin their ever-expandingglobal operations[]. Also, an increase in international assignmentshavebecomean importantway to developfuturegloballeaders *Hal B. Gregersenis Associate Professorof InternationalManagementat the Marriott School of Managementat BrighamYoungUniversity.His researchinterestsincludeglobal leadership, international strategy, international humanresourcemanagement, and corporate cartography. **JulieM. Hite is a second year doctoral student in StrategicManagementat the Eccles Graduate School of Management, University of Utah. Her research interests include entrepreneurial/small businessstrategy,entrepreneurial networks,workplaceflexibility,and strategichumanresourcemanagement. 711 Palgrave Macmillan Journals is collaborating with JSTOR to digitize, preserve, and extend access to Journal of International Business Studies www.jstor.org ® 712 JOURNAL OF INTERNATIONALBUSINESSSTUDIES, FOURTHQUARTER1996 who can navigatetheirfirmseffectivelythroughthe complexwatersof internationalcompetition[Adler1991;Black,Gregersenand Mendenhall1992a]. While past researchhas examinedissues from selection to effectivecrossculturaladjustment, relativelylittle emphasishas been placedon one of the most importantinternational humanresourcemanagementtopics,performanceappraisal. Whethera managerhas been sent overseasto performa certainfunction, developskillsandabilities, or both, expatriate performance appraisalsprovide criticalinformationto the individualand the organizationon the extent to whichstrategicobjectivesarebeingmet [Blacket al. 1992a;Butler,Ferrisand Napier 1991;Dowlingand Schuler1990;Mendenhalland Oddou 1991].The primaryobjectiveof this paper is to explore,both conceptuallyand empirically, the designandcurrentpracticesof expatriateperformance appraisals (EPAs)andtheirrelationto theperceivedaccuracyof the overallEPAsystem. CONCEPTUALFRAMEWORK Whileexpatriatescan playpivotalstrategicrolesduringinternational assignments[Boyacigiller 1990],scholarshavepaidlittletheoretical (e.g.,Gregersen, Black and Hite [1995];Mendenhalland Oddou [1991])and no empirical attention [Black et al. 1992a, 1992b]to expatriateperformanceappraisal systems.As a result,the primarytheoreticalbasisfor expatriateperformance appraisalcomes fromthe literatureon domesticU.S. performanceappraisals (e....