Consumer product valuation and interorganizational collaboration and innovation in small manufacturing

University Of Illinois At Chicago, Chicago IL

Investigators

Abstract

This project will explain the role that consumer ratings play in how small-scale manufacturing firms choose partners with whom to collaborate and how resultant patterns of collaboration shape an industry over time. Collaboration is an important way for firms to learn from one another and innovate. At the same time, consumers signal approval of innovations through ratings platforms, such as those found on online retail websites. The craft brewing industry is a strategic research site for examining such industry-consumer dynamics in the context of small-scale manufacturing. Interorganizational collaboration is common within this industry. This industry also has a community of consumers who actively rate products on public websites. Like organizations in many industries, small-scale manufactures vary in their strategies for collaborating: some collaborate with many other firms; others with the same firm repeatedly; still others collaborate once and never again. Over time, patterns of interorganizational collaboration structure industries. This project will construct and analyze a dataset from two product rating sites to model the network of collaborations among manufactures in three states in the U.S. Combined with interviews with a random sample of organizational members from the dataset, analyses will show how consumer ratings influence decisions to collaborate among small-scale manufactures and ultimately shape the industry. Findings will bring together and contribute to the literatures on valuation in economic sociology and collaboration in organization science as well as inform managers? strategic decisions regarding collaborations and their prospective outcomes. This project identifies and explains a key mechanism by which industries are structured: the recursive relationship between consumer ratings and interorganizational collaborations. Interorganizational collaboration takes place when organizations cooperate in a non-hierarchical relationship to share knowledge and resources and to innovate in ways that would be too risky to do independently. Status plays an important role in why firms choose certain others with whom to collaborate. Communities of consumers increasingly take advantage of online platforms to rate producers and products, creating an alternative measure of firm and product valuation and status. This project will bring together the literatures on interorganizational collaborations and valuation by determining and explaining the role of consumer ratings in strategic decisions about collaboration. Data for this project will come from a mixed methods study of the small manufacturing industry in three states: California, Colorado, and Illinois between 2009 and 2016. These states have been selected to provide robust samples of collaborations. The time frame reflects the exponential growth in the industry nationally. Quantitative data will come from two rating websites, which will provide evidence of collaborations along with consumer valuations of the products resulting from collaborations. Analyses of this data will provide dynamic network models of the industry as well as concrete measures of status among firms. This data will be supplemented with primary data collected from organizational members in the sample. Investigators will also conduct key informant interviews with a random sample to identify non-measurable features of status and motivations behind choices of collaborators.