Structural folds: generative disruption in overlapping groups1

Entrepreneurial groups face a twinned challenge: recognizing and implementing new ideas. We argue that entrepreneurship is less about importing ideas than about generating new knowledge by recombining resources. In contrast to the brokerage-plus-closure perspective, we address the overlapping of cohesive group structures. In analyzing the network processes of intercohesion, we identify a distinctive network topology: the structural fold. Actors at the structural fold are multiple insiders, facilitating familiar access to diverse resources. Our data set records personnel ties among the largest 1,696 Hungarian enterprises from 1987 to 2001. First, we test whether structural folding contributes to group performance. Second, because entrepreneurship is a process of generative disruption, we test the contribution of structural folds to group instability. Third, we move from dynamic methods to historical network analysis and demonstrate that coherence is a property of interwoven lineages of cohesion, built up through repeated separation and reunification.