INTERORGANIZATIONAL ENTREPRENEURSHIP IN A GLOBAL ARENA

The evolution of interorganizational networks is shaped by micro and macro processes. At the micro level organizational dyads negotiate relationships in light of their own cost—benefit analysis. At the macro level resources flow through networks and are mobilized by coalitions. Current research is beginning to examine integrating mechanisms which link network dynamics to dyadic relationship formation. In this paper we examine interorganizational brokerage as an integrating mechanism linking micro and macro network processes. We focus on the formation of networks in the global television industry. The Children's Television Network (CTW) has licensed and co‐produced its flagship program “Sesame Street” in many countries around the globe. Recently, it has expanded beyond a strategy based on direct first‐order linkages to one of brokerage and interorganizational entrepreneurship, entailing the formation of second‐order linkages—linkages between organizations with which CTW has direct first‐order relationships. In the aftermath of the Oslo Peace Agreement, CTW acted as a broker and sponsor of a joint venture between Israeli and Palestinian broadcasters. The main challenge facing CTW was a high degree of distrust between the parties motivated by fears of opportunistic exploitation. Such fears typically result in high transaction costs, making joint venture formation difficult, if not impossible. In its capacity as broker, CTW worked to reduce transaction costs. This was done by providing resources where needed, and by facilitating interaction and trust building between the parties. We describe CTW's tactics during the formation of this joint venture, and we analyze the outcome of the joint venture from the point of view of CTW's overall strategy. We conclude by discussing CTW's network and brokerage strategy in the aftermath of the joint venture.