Controlling uncertainty: Relationship management in the organizational field of United States investment firms

This dissertation explains how investment firms manage relationship with other firms in order to control two types of uncertainties: one from selfish and non-cooperative actions of other firms when they offer stock through syndicates, and the other from lack of access to live market information.;In an organizational field, firms are in inter-corporate relationship network. Origin of uncertainties and method to control them are all in the relationship network. Partner firms that are relationally independent and/or constraining are more selfish and less cooperative. On the other hand, such firms are in a central position where information accumulates. Thus relationship and uncertainty are closely related. Uncertainty control becomes a problem of relationship management.;Literature on organization or economic sociology describes relationship either as tools of suppressing uncertainty, or as sources of uncertainty. The control perspective in this study finds relationship both source of uncertainty and method of uncertainty control. A major method of uncertainty control is control strategy, that is, to occupy relationally autonomous or dominant position. In the position, other firms are less constraining to, or more dependent on the ego firm, less likely to show opportunism. Firms also seek embedding and integration in order to obtain access to focuses of information, visibility and status. They want to strengthen tie with constraining and dominant firms. This is integrating strategy.;From offering data in 1985 and 1986, this study finds different strategies for different firms. Strong and big firms with financial or social resource are interested in control strategy. Small firms with little resource employs integrating strategy, laying a base for symbiosis with big firms.;Investment firms are concerned about reputation. Naturally, firms want to suppress opportunism of partner firms in syndicates for better quality of offering. Firms also want live market information that is created, circulated and consumed among market players including other investment firms.;Firms that suppress opportunism of partner firms can lower price for public offering by exacting commitment and loyalty from other firms. Only strong firms reap benefits of better performance.