The influence of institutions on organizational performance via network structure

Abstract

This research focusses on the influence of institutions on organizational performance via network structure. Two meta-hypotheses are tested: (1) institutions influence network structures and (2) network structures influence organizational performance. By applying the idea of institutions and organizations to the Open Source (OS) community, it is expected that restrictiveness of licenses influence the network structure of OS projects, and network structure influences process- and outcome-based performance of OS projects. Empirical analyses are performed using the SourceForge database, a compilation of more than 30,000 active OS projects. The theories of Burt (2000, 2005) and Coleman (1990) are used in explaining the influence of levels of brokerage and closure as indicators of network structure. Findings show that restrictiveness of licenses is a negative predictor of both levels of brokerage and closure. Furthermore, levels of brokerage predict higher levels of both process-based and outcome-based performance. Levels of closure show no distinct pattern in explaining performance of OS projects. Higher levels of process-based performance are an indicator of higher overall performance outcomes. The findings are broadly consistent with our theoretical framework.