| Social Capital, Strategic Relatedness and the Formation of Intra-Organizational Linkages |
| | Tsai, Wenpin | Pennsylvania State U. | wtsai@psu.edu | (814)-865-2732 |
| | This paper investigates the evolutionary dynamics of network formation by analyzing how new interunit linkages are created inside a large multinational organization. The new interunit linkages modify an organization's internal social structure and provide new opportunities for productive resource exchange among organizational units. Creating such new interunit linkages, however, takes time. Using sociometric techniques and event history analysis, this study predicts the speed at which existing organizational units start building relationships with a newly formed organizational unit to exchange resources. Two important constructs: social capital, derived from the sociology literature on social structure, and strategic relatedness, derived from the strategy literature on diversification and the resource-based view of the firm, are used to explain the speed of new interunit linkage creation. Results show that both social capital and strategic relatedness affect intra-organizational network formation. The relative influence of social capital and strategic relatedness on new linkage creation, however, depends on the content of exchange in the interunit linkages. Social capital, in the forms of prior network centrality and trustworthiness, is particularly important for the exchange of intangible resources among organizational units. The results inform both social network and resource-based perspectives on intra-organizational linkages, suggesting avenues for further theoretical and empirical work toward a synthesis of these two areas of research. |
| | Keywords: Social Capital; Network Formation; Intra-organizational Linkages |
| Intellectual Capital Profiles: An Examination of Investments and Returns |
| | Youndt, Mark | U. of Connecticut | MARK@sba.uconn.udu | 860-486-6415 |
| | Subramaniam, Mohan | U. of Connecticut | msub@worldnet.att.net | 860 486 4690 |
| | Snell, Scott A. | Pennsylvania State U. | ssnell@psu.edu | (814)-865-2195 |
| | Golden, Timothy D. | U. of Connecticut | TDG96001@uconnvm.uconn.edu | (860)486-5675 |
| | Using data collected from executives in 208 organizations, this study takes a configurational approach in examining how human, social, and organizational capital combine to form distinct intellectual capital profiles across organizations. We then examine how investments in human resource management (HRM), information technology (IT), and research and development (R&D) differ across these intellectual capital profiles, as well as investigate differences in financial returns and Tobin's q between them. Results indicate that a relatively small group of superior performing organizations exhibited high levels of human, social, and organizational capital. Most firms, however, tended to primarily focus on only one form of intellectual capital; and a small group of underperforming organizations had very low levels of all three types of intellectual capital. At a general level, HRM and IT investments appeared to influence intellectual capital development more than R&D investments. More specifically, HRM intensity tended to be higher in profiles with high human and social capital, while IT intensity was stronger in profiles with high social capital. Further, HRM, IT, and R&D intensity were all very high in the group of superior performing organizations that had high levels of human, social, and organizational capital. |
| | Keywords: intellectual capital; knowledge management; configurational analysis |
| Social Capital and Productive Exchange: Is Network Structure All We Need to Consider? |
| | Moran, Peter | London Business School | pmoran@lbs.ac.uk | 44 171 262-5050 |
| | Galunic, Charles | INSEAD | charles.galunic@insead.fr | 33 1 60 72 43 85 |
| | The notion of social capital as a lubricant that facilitates productive
exchange (Coleman, 1990) is receiving increasing attention in
organizational studies and its relevance for the field of strategy is just
beginning to be noticed. Asserting the importance of social capital for
understanding differential firm performance, this paper examines the extent
to which two dimensions of social capital - the structure and quality of
one's resource exchange network - are both related to individuals'
contribution to firm performance. Based on a sample of 138 product and
sales managers in a Fortune 100 pharmaceutical firm, the authors find
evidence indicating that both elements of social capital influence
managerial contributions (i.e., to sales and innovation). The findings
are broadly consistent with notions that the efficacy of social capital
lies in its ability to simultaneously enable and constrain action (cf.
Giddens, 1984; Coleman, 1990). Two implications that flow from this study
are: 1) it's not just who knows whom but also how well they are known, that
matters for outcomes of relevance to firms and their managers; and 2)
single dimensional measures of social capital that tap only one side of
this eabling-constraining tension, are likely to be too crude to reveal the
full power of social capital. |
| | Keywords: social capital; resource-based view; social networks |
| The Ties That Bind: Status-Based Constraints on Strategic Actions in the U.S. Investment Banking Industry |
| | Li, Stan X. | U. of Toronto | li@mgmt.utoronto.ca | (416)-978 7019 |
| | Berta, Whitney Blair | U. of Toronto | berta@mgmt.utoronto.ca | (416)-978-3813 |
| | This paper argues that the sociological strategic action perspective can be applied to strategic management research to provide concrete predictions about the actions pursued by firms embedded in an industry network. Strategic actions refer to how actors use the power resources, such as status, made available to them by their network positions, both selectively and contingently, in response to other network players' behaviors (Molm, 1990). The strategic action perspective emphasizes human agency and avoids the implausible assumption of network-structure determinism. We extend the strategic action argument by suggesting that the extensiveness of power resources both drives and constrains firm's strategic actions in a network. In our empirical study of the U.S. investment banking industry, status enhances banks' opportunities to participate in syndicates formed to launch IPOs. Higher status permits banks to expand their syndicate-partner base, while lower status limits the feasible number of transaction partners. Paradoxically, high-status appears to constrain strategic actions: partner expansion strategies inhibit development of deep relationships with transaction partners. This paradox may imply that resources in a high-status bank are not limitless, and the limited resources in the bank prohibit it from expanding partner base and developing deep relationship simultaneously. Our findings provide theoretical insights into the manner in which strategic actions are constrained by status, and suggest that the investment banking industry is segmented by groups of closely-related banks. The practical impact of status-based segmentation, on stock market efficiency and investor protection, deserves attention from securities industry regulators and warrants further study. |
| | Keywords: Status; Strategic-Action; investment-bank |
| Who reaps the gains from social capital? Appropriating Rent from a Dynamic Capability |
| | Coff, Russell W. | Washington U. | coff@mail.olin.wustl.edu | (314) 935-6342 |
| | Proponents of the resource-based view identify social complexity as a potential source of sustained competitive advantage. However, this has not been integrated with the broader social capital literature, which also focuses on attributes of social networks. Although both literatures acknowledge that social capital is value creating, they often make completely different assumptions about who will reap the gains from social capital. The strategy literature focuses solely on when the “firm” will gain from investments in social capital while the sociology and human resources literatures often focus more on when employees will benefit. This paper will examine aspects of networks that determine who gets the lion’s share of the gains.
It is suggested that particularly those attributes that are critical for dynamic capabilities may allow key actors to appropriate rent. Specifically, a capability to respond quickly to environmental contingencies may require external networks and individuals with a high degree of centrality in the network. As such, these individuals would be in a strong position to appropriate the rent.
The essay concludes with a call for additional research linking attributes of rent-generating resources with rent appropriation.
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| | Keywords: Resource-based view; Social Capital; Rent Appropriation |