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In this study, we examine how experience at the level of the organization, the population, and the related group affects the failure of Manhattan hotels. We find organizational experience has a U-shaped effect on failure; that organizations enjoy reduced failure as a function of population experience before their founding, but not after; and that related organizations provide experience that lowers failure, but it matters whether their experience is local or non-local, and if it was acquired before or after the relationship was established. These results indicate both the difficulty of applying different types of experience to reduce the risk of organizational failure, and the relevance of experience for the evolution of organizational populations.

Friendships with competitors can improve the performance of organizations through the mechanisms of enhanced collaboration, mitigated competition, and better information exchange. Moreover, these benefits are best achieved when competing managers are embedded in a cohesive network of friendships (i.e., one with many friendships among competitors), since cohesion facilitates the verification of information culled from the network, eliminates the structural holes faced by customers, and facilitates the normative control of competitors. The first part of this analysis examines the performance implications of the friendship-network structure within the Sydney hotel industry, with performance being the yield (i.e., revenue per available room) of a given hotel. This shows that friendships with competitors lead to dramatic improvements in hotel yields. Performance is further improved if a manager's competitors are themselves friends, evidencing the benefit of cohesive friendship networks. The second part of the analysis examines the structure of friendship ties among hotel managers and shows that friendships are more likely between managers who are competitors.

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Organizational learning is central to a number of strategic theories. Recent arguments, however, identify risks associated with learning from own experience in the form of overattention to the short term and local conditions. The experience of the industry may offer opportunities for organizational learning that the experience of the organization does not, because industry experience is more varied, and not tied to the path‐dependent history of any one organization. We investigate the influence of own experience and of two types of industry experience on the failure rates of U.S. hotel chains. The two types of industry experience are operating experience, which is a discounted sum of the units operated by U.S. hotel chains in the history of the industry, and competitive experience, which is a discounted sum of the number of failures of U.S. hotel chains in the history of the industry. We find that (a) organizations initially benefit from their own experience, but are harmed in the long run, (b) generalist organizations are more weakly affected by their own experience than specialists, (c) organizations benefit from their industry’s operating experience, accumulated both before and after the organization’s entry, and (d) organizations benefit from their industry’s competitive experience, but only after the organization’s entry. © 1997 by John Wiley & Sons, Ltd.

This article investigates the configuration of cognition-and affect-based trust in managers' professional networks, examining how these two types of trust are associated with relational content and structure. Results indicate that cognition-based trust is positively associated with economic resource, task advice, and career guidance ties, whereas affect-based trust is positively associated with friendship and career guidance ties but negatively associated with economic resource ties. The extent of embeddedness in a network through positive ties increases affect-based trust, whereas that through negative ties decreases cognition-based trust. These findings illuminate how trust arises in networks and inform network research that invokes trust to explain managerial outcomes.

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This research investigates hypotheses about differences between Chinese and American managers in the configuration of trusting relationships within their professional networks. Consistent with hypotheses about Chinese familial collectivism, an egocentric network survey found that affect- and cognition-based trust were more intertwined for Chinese than for American managers. In addition, the effect of economic exchange on affect-based trust was more positive for Chinese than for Americans, whereas the effect of friendship was more positive for Americans than for Chinese. Finally, the extent to which a given relationship was highly embedded in ties to third parties increased cognition-based trust for Chinese but not for Americans. Implications for cultural research and international business practices are discussed. Journal of International Business Studies (2009) 40, 490–508. doi:10.1057/palgrave.jibs.8400422