Transcript SOC 8311 Basic Social Statistics

Playing Well Together:
Creating Corporate Social Capital
in Strategic Alliance Networks
David Knoke
University of Minnesota
Presented at
Social Capital and Social Networks – Bridging Boundaries
Ohio State University, June 20-21, 2005
“The longest meeting I have with [Time Warner CEO] Dick
Parsons is when we sit down once a year and talk about
human resources,” says Turner chief Phil Kent. It may not
seem like the best use of a CEO’s time, but it turns out to
be a very big deal. All those synergies? Well, you don’t
get them if units don’t play well with one another. Parsons
may achieve what his predecessors failed to do: dismantle
Time Warner’s fiefdoms. Division heads say they’re now
encouraged to work together, and they often do so in ways
that give them advantages over the competition.”
Stephanie N. Metha. 2006. “Will Wall Street Ever Trust Time
Warner?” Fortune 151:11 May 30:84.
SOCIAL CAPITAL
Social Capital Resources accruing to an ego actor
through direct & indirect relations with its alters that facilitate
ego’s attainment of its expressive or instrumental goals
Diverse conceptualizations of an actor’s social capital:
“inheres in the structure of relations between persons
and among persons” (Coleman 1990:302)
“at once the resources contacts hold and the structure
of contacts in the network” (Burt 1992:12)
 “resources embedded in a social structure
which are accessed and/or mobilized in
purposive action” (Lin 2001:12)
Mobilizing Social Capital
Job-seekers, entrepreneurs, work teams try to deploy their network ties
to acquire the use of resources held by their alters. But, they may not
always succeed in gaining access. Johnson & Knoke (2005) argued
that volume of social capital to which ego actually has access is the
aggregate of resources that ego could probably mobilize from its alters:
J
SCi   R j p ji
j 1
SCi = ego i’s social capital from the J alters in its ego-network
pji = ego’s perceived probability of access to use alter j’s resources
Rj = total resources controlled by alter j that could be useful to ego i
• Find a simultaneous equation solution for all J actors in the system
• Create plausible quantitative measures of the two variables
• Identify network and environmental conditions that change the
probabilities of resources flowing across the links from alters to ego
How much SocCap could EGO mobilize?
p1=.8
EGO
p1=.5
R1=4
p4=.5
R4=6
p4=.8
R2=7
p1=.2
p1=.2
R5=3
R3=5
p1=.8
R6=9
Corporate Social Capital
Corporate Social Capital (CSC) Social relations
embedded in work-related organizational roles (e.g., workers,
teams, executives, owners), not in their personal networks.
“Corporate social capital, then, refers to: The set of resources,
tangible or virtual, that accrue to a corporate player through
the player’s social relationships, facilitating the attainment of
goals.” (Leenders & Gabbay 1999:3)
Social liability incurred as transaction-cost opportunism
(self-interest with guile) “[A manager’s] ‘dark side’ of social capital
…might also limit his ability to change the composition of this network
as required by his task environment” (Gargiulo & Benassi 1999:299).
-
You’re obliged to reciprocate a sponsor’s assistance and advice
Your friendship with an inept team leader blocks your promotion
Your mentor insists that you build & paint his boat dock
Attending the boss’ soirée thwarts your plans to watch the Big Game
Strategic Alliance Networks
Corporate social capital relations span multiple levels of analysis
from individuals, to workteams, to firms, and organizational field
network (Kenis & Knoke 2002). At the IOR level, repeated
alliances generate a strategic alliance network form of CSC.
Strategic alliance: at least two partner
firms that (1) remain legally independent; (2)
share benefits, managerial control over
performance of assigned tasks; (3) make
contributions in strategic areas, e.g., technology
or products (Yoshino & Rangan 1995).
Strategic alliance network “the set of orgs connected
through their overlapping partnerships in different strategic
alliances” (Knoke 2001:128; Todeva & Knoke 2002). Firms are
closely tied to one another through many direct alliances or
many indirect ties through third firms (i.e., partners-of-partners).
CSC through SANs
A firm’s ties to organizations in a strategic alliance network
increases its probability of accessing and using the valuable
resources held by the firm’s partners, including their:
 Financial resources, credit extensions
 Knowledge, information, technologies/patents
 Marketing expertise, country/culture penetration
 Org’l status, corporate/brand reputations
Trustworthiness and low risk (moral hazards)
Organizations aware of such CSC advantages may act strategically
in pursuing new alliances, partnering with firms that maximize its
CSC portfolio. At the field-net level, an evolving strategic alliance
network comprises a collective CSC structure which simultaneously
facilitates and constrains the opportunities for its member firms.
Global Information Sector
Basic CSC concepts could help to explain the evolution of the
strategic alliance network in the Global Information Sector (GIS).
This sector increased collaborative agreements exponentially
1990-2000, creating a complex web of overlapping partnerships.
 Five NAICS info subsectors (publishing; motion pictures & sound
recording; broadcasting & telecomms; info services & data processing)
plus computer, telecomm, semiconductor manufacturing industries
 145 multinational corporations: 66% USA, 16% Europe, 15% Asia
 Alliance & venture announcements in news media from 1989 to 2000
 Total of 3,569 alliances involving two or more GIS organizations
Next two figures show mean strategic alliances among 30 most-active
firms & MDS distances/clusters on dyads’ # of annual partnerships.
Altho Japanese firms have higher probability of mobilizing
resources from compatriots, what corporate social capital
difficulties are they creating for themselves by concentrating
strategic alliances so heavily on other Japanese partners?
GIS Core Alliances in the Triad
6
5
4
3
2
YR91
1
YR95
YR00
0
USA
Europe
Japan
Europe-USA
USA-Japan
Japan-Europe
2000 GIS (MDS stress = 0.137)
2.0
BS
1.5
BT
1.0
TI
ATT
FT
BCE
.5
MOTOROLA
AOL
ERICSSON
PHILIPS
0.0
NOVELL
SUN CISCO
MATSUSHITA
MICROSOFT
IBM
NTT
HP
TOSHIBA
SONY
INTEL
HITACHI
-.5
FUJITSU
ORACLE
COMPAQ
APPLE
NEC
MITSUBISHI
-1.0
SIEMENS
SAMSUNG
-1.5
-2.0
-1.5
-1.0
-.5
0.0
.5
1.0
1.5
2.0
References
Burt, Ronald S. 1992. Structural Holes: The Social Structure of Competition. Cambridge, MA: Harvard University
Press.
Coleman, James S. 1990. “Social Capital.” Pp. 300-321 in Foundations of Social Theory. Cambridge, MA:
Harvard University Press.
Gargiulo, Martin and Mario Benassi. 1999. “The Dark Side of Social Capital.” Pp. 298-322 in Corporate Social
Capital and Liability, edited by Roger Leenders and Shaul Gabbay. Boston: Kluwer.
Johnson, LuAnne R. and David Knoke. 2005. “’Skonk Works Here’: Activating Network Social Capital in
Complex Collaborations.” Advances in Interdisciplinary Studies of Work Teams 10:243-262.
Kenis, Patrick and David Knoke. 2002. “How Organizational Field Networks Shape Interorganizational TieFormation Rates.” Academy of Management Review 27:275-293.
Knoke, David. 2001. Changing Organizations: Business Networks in the New Political Economy. Boulder, CO:
Westview.
Leenders, Roger Th. A. J. and Shaul M. Gabbay (eds.). 1999. Corporate Social Capital and Liability. Boston:
Kluwer Academic Publishers.
Lin, Nan. 2001. Social Capital: A Theory of Social Structure and Action. New York: Cambridge University Press.
Todeva, Emanuela and David Knoke. 2002. “Strategische Allianzen und Sozialkapital von Unternehmen.”
(“Strategic Alliances and Corporate Social Capital”) Kölner Zeitschrift für Sociologie und Sozialpsychologie.
Sonderheft 42:345-380.
Yoshino, Michael Y. and U. Srinivasa Rangan. 1995. Strategic Alliances: An Entrepreneurial Approach to
Globalization. Cambridge, MA: Harvard University Press.