Management practices in short-term network organizations: The performance impact of the shadow of the future and psychological contracts in the United States movie industry, 1931--1940

Organizational theorists have become increasingly interested in the study of organizational networks and how they differ from markets and hierarchies. However, the majority of the research has focused on long-term, open-ended relationships. In contrast, my dissertation investigates how a short time frame of collaboration challenges network coordination and safeguarding practices. A short-term network organization (STNO) is defined as an intentionally created organizational entity that combines independent contributors for the objective of accomplishing a single short-term task. Applying transaction cost economics and institutional theory, I hypothesize that network organizations experience performance advantages if they: (1) strengthen psychological contracts between the network contributors and (2) strengthen the population-wide shadow of the future. These performance improvement effects are hypothesized to be stronger for STNOs compared to long-term network organizations (LTNOs). Hypotheses are tested in a stratified random sample of Hollywood movie projects from 1930–1940 (n = 239). Both STNO practices investigated involve the communication of network contributor information via on-screen credits to non-network members. The study finds moderate support for a positive performance effect of the psychological contract practice and strong support for a positive performance effect of the population-level shadow of the future practice. However, only the population-level shadow of the future practice has the hypothesized stronger performance effects for STNOs. The dissertation contributes to the organizational network research by conceptualizing STNOs and the governance challenges short time frames of collaboration imply. It provides some first evidence for the importance of institutionalized population-level practices in understanding the performance impact of STNOs. Such practices can establish an industry-wide sanctioning system that creates a shadow of the future that protects STNOs against opportunistic behavior and leads to overall performance improvements. The findings support contemporary institutional theory that argues widespread practices can have value in addition to legitimacy. In the context of transaction cost economics, these findings underscore the importance of expanding the research focus to account for relevant population-level practices. While the archival nature of the study limited the detail with which causal processes could be observed, the findings encourage future research investigating the performance implications of short-term collaborations and their management practices.