HC Relations and networks of organizations, Emma Hamm 2078889
HC Relations and networks of
organizations
Lecture 1: Introduction 1
Lecture 2: Definitions, types and characteristics of relationships between organizations and
networks of organizations 4
Lecture 3: Relational thinking and network analysis 11
Lecture 4: Relational thinking and network analysis 21
Lecture 5: Explaining the determinants of interorganizational relationships and networks 29
Lecture 6: Explaining the determinants of inter-organizational relationships and network 34
Lecture 7: Consequences of networks and relations at the organizational level 42
Lecture 8: Consequences of networks and relations at the organizational level (continued) 51
Lecture 9: Consequences of networks and relations at the organizational level (continued) 56
Lecture 10: Game Simulation: The Consequences of Network Position 61
Lecture 11: Choices about the management of inter-organizational relationships and networks 62
Lecture 12: Consequences of relationships and networks at the network level 69
Lecture 13. Practitioner Insights - guest lecture on “Managing inter-organizational networks: The
life of a network manager” 77
0
, HC Relations and networks of organizations, Emma Hamm 2078889
Lecture 1: Introduction
Understanding relations & networks of organizations
● What are IORs and IONs? Why are they important?
● Overview of ‘classic’ approaches and studies about IORs and IONs
● Social network analysis (SNA)
→
● Empirical analyses of causes and consequences of IORs and IONs
● Management of IORs and IONs
RANO: an overview
Main aim of this course:
To recognize, describe, analyze, explain and assess relations between organizations and of
organizational networks
• Relations and networks: Introduction and importance (Lecture 1)
• Definition of network + Overview of classic studies of IORs (Lecture 2)
• Social network analysis + tools (Lectures 3 & 4 + computer lab)
SOCIAL CAPITAL: WHY DOES IT MATTER?
→ what is social capital & why is it important
THE MYTH OF INDIVIDUALISM & THE RELATIONAL BASIS OF SUCCESS
Defining social capital
● “Social”: resources are available in and through personal and business networks
● “Capital”: it is productive, it creates value
e.g., information, business opportunities, financial resources, power, emotional support,
trust, cooperation, and so on.
● Social capital is not a feature of an entity (attribute variable), but it is a feature of a relationship
(relational variable)
● Relational variables often have an equal/higher explanatory power than attribute variables
So key: relational, and these factors are important
● “The friction is that society consists of a set of independent individuals, each of whom acts to
achieve goals that are independently arrived at, and that the functioning of the social system
consists of the combination of these actions of independent individuals.” (James Coleman)
1
, HC Relations and networks of organizations, Emma Hamm 2078889
IORs AND IONs: A RELATIONAL VIEW OF ORGANIZATIONS
● Interorganizational networks: “relatively enduring transactions, flows, and linkages that occur
among and between an organization and one or more organizations in its environment”
● Relationships and networks of organizations are about the exchange and flow of resources
between organizations
● For an individual organization, relations and networks mean access to and dependency on
resources (e.g., information, ideas, reputation, trust)
● The notion of ‘social capital’ captures the resources available through relationships and
networks, i.e., relational view of organizations
SOCIAL CAPITAL AND SUCCESS: MULTI-LEVEL EFFECT
Individual success and performance:
- Talent: nature or nurture? Relations are important for developing talents
- Intelligence: genetically determined but also developed and strengthened by relations (social
interactions, quality of education)
- Education: writing and reading skills are a result of social interaction
- Dedication: supportive settings (e.g., friends and family)
- Chance? the importance of ‘spider web networks
SOCIAL CAPITAL AND INDIVIDUAL’S QUALITY OF LIFE
- Well-being: sensemaking work and social relations are important predictors of well-being
- Health: networkers are often healthier
- Life expectancy: networkers live longer
SOCIAL CAPITAL IN THE ECONOMY
● Payment and career development:
○ people who are strongly embedded tend to earn higher salaries and experience faster
career development (“structural holes”, Ronald Burt)
● Raising financial capital:
○ informal financial capital market.
● Learning in organizations:
○ informal relations and learning.
● Marketing:
○ verbal advertising, importance of social networks for diffusion of new products
● Strategic alliances:
○ importance of relationships between organizations (learning and reputation effects)
IORS & IONS ARE THE LIFEBLOOD OF BUSINESS
→ bv: KLM: take you to any destination, but also with the planes from partners
→ alliances: very difficult! (bv: vodafone and philips lighting - empower city)
Cobalt - used for batteries
The global battery supply chain for cobalt
2
, HC Relations and networks of organizations, Emma Hamm 2078889
→ major issue for europe: they don’t have the production capacity they need
→ one country has it (Congo) and is working very hard to produce it, but the money from selling it does
not end up here! ⇒ INEQUALITY
DOCUMENTARY Connected: The Power of Six Degrees
Six degrees of separation is the idea that all people are six or fewer social connections away from each
other. As a result, a chain of "friend of a friend" statements can be made to connect any two people in a
maximum of six steps. It is also known as the six handshakes rule.
founder of the science: Steve Strogatz together with Duncan Watts
→ 40 people selected to bring a package to boston to Mark by asking family/friends
Phenomenon of synchronicity
How can populations of dissimilar individuals synchronize?
→ bv crickets. Each cricket responded to the others, but individual crickets testing did not work
To understand networks: six degrees → it makes a small world (yet very clustered)
But… if I know 100 people, and person B as well, a lot of overlap between those people
Mathematical model:
Crowd in a soccer game → getting a message from one side to the other side
If you have walkie talkie, you can connect in fewer steps to the other side
→ one single link has enormous effect,
KEVIN BACON:
Linking every actor to just one star – extract path to kevin bacon
⇒ Steve Strogatz & Duncan Watts used the kevin bacon game
Laszlo Baeabasi: looking at networks from a different perspective
– predict the future. Events are never isolated, so we need to understand how they interact
- Organized principle based around hubs (amazon, google,..)
→ a lot of people who used this
3
HC Relations and networks of
organizations
Lecture 1: Introduction 1
Lecture 2: Definitions, types and characteristics of relationships between organizations and
networks of organizations 4
Lecture 3: Relational thinking and network analysis 11
Lecture 4: Relational thinking and network analysis 21
Lecture 5: Explaining the determinants of interorganizational relationships and networks 29
Lecture 6: Explaining the determinants of inter-organizational relationships and network 34
Lecture 7: Consequences of networks and relations at the organizational level 42
Lecture 8: Consequences of networks and relations at the organizational level (continued) 51
Lecture 9: Consequences of networks and relations at the organizational level (continued) 56
Lecture 10: Game Simulation: The Consequences of Network Position 61
Lecture 11: Choices about the management of inter-organizational relationships and networks 62
Lecture 12: Consequences of relationships and networks at the network level 69
Lecture 13. Practitioner Insights - guest lecture on “Managing inter-organizational networks: The
life of a network manager” 77
0
, HC Relations and networks of organizations, Emma Hamm 2078889
Lecture 1: Introduction
Understanding relations & networks of organizations
● What are IORs and IONs? Why are they important?
● Overview of ‘classic’ approaches and studies about IORs and IONs
● Social network analysis (SNA)
→
● Empirical analyses of causes and consequences of IORs and IONs
● Management of IORs and IONs
RANO: an overview
Main aim of this course:
To recognize, describe, analyze, explain and assess relations between organizations and of
organizational networks
• Relations and networks: Introduction and importance (Lecture 1)
• Definition of network + Overview of classic studies of IORs (Lecture 2)
• Social network analysis + tools (Lectures 3 & 4 + computer lab)
SOCIAL CAPITAL: WHY DOES IT MATTER?
→ what is social capital & why is it important
THE MYTH OF INDIVIDUALISM & THE RELATIONAL BASIS OF SUCCESS
Defining social capital
● “Social”: resources are available in and through personal and business networks
● “Capital”: it is productive, it creates value
e.g., information, business opportunities, financial resources, power, emotional support,
trust, cooperation, and so on.
● Social capital is not a feature of an entity (attribute variable), but it is a feature of a relationship
(relational variable)
● Relational variables often have an equal/higher explanatory power than attribute variables
So key: relational, and these factors are important
● “The friction is that society consists of a set of independent individuals, each of whom acts to
achieve goals that are independently arrived at, and that the functioning of the social system
consists of the combination of these actions of independent individuals.” (James Coleman)
1
, HC Relations and networks of organizations, Emma Hamm 2078889
IORs AND IONs: A RELATIONAL VIEW OF ORGANIZATIONS
● Interorganizational networks: “relatively enduring transactions, flows, and linkages that occur
among and between an organization and one or more organizations in its environment”
● Relationships and networks of organizations are about the exchange and flow of resources
between organizations
● For an individual organization, relations and networks mean access to and dependency on
resources (e.g., information, ideas, reputation, trust)
● The notion of ‘social capital’ captures the resources available through relationships and
networks, i.e., relational view of organizations
SOCIAL CAPITAL AND SUCCESS: MULTI-LEVEL EFFECT
Individual success and performance:
- Talent: nature or nurture? Relations are important for developing talents
- Intelligence: genetically determined but also developed and strengthened by relations (social
interactions, quality of education)
- Education: writing and reading skills are a result of social interaction
- Dedication: supportive settings (e.g., friends and family)
- Chance? the importance of ‘spider web networks
SOCIAL CAPITAL AND INDIVIDUAL’S QUALITY OF LIFE
- Well-being: sensemaking work and social relations are important predictors of well-being
- Health: networkers are often healthier
- Life expectancy: networkers live longer
SOCIAL CAPITAL IN THE ECONOMY
● Payment and career development:
○ people who are strongly embedded tend to earn higher salaries and experience faster
career development (“structural holes”, Ronald Burt)
● Raising financial capital:
○ informal financial capital market.
● Learning in organizations:
○ informal relations and learning.
● Marketing:
○ verbal advertising, importance of social networks for diffusion of new products
● Strategic alliances:
○ importance of relationships between organizations (learning and reputation effects)
IORS & IONS ARE THE LIFEBLOOD OF BUSINESS
→ bv: KLM: take you to any destination, but also with the planes from partners
→ alliances: very difficult! (bv: vodafone and philips lighting - empower city)
Cobalt - used for batteries
The global battery supply chain for cobalt
2
, HC Relations and networks of organizations, Emma Hamm 2078889
→ major issue for europe: they don’t have the production capacity they need
→ one country has it (Congo) and is working very hard to produce it, but the money from selling it does
not end up here! ⇒ INEQUALITY
DOCUMENTARY Connected: The Power of Six Degrees
Six degrees of separation is the idea that all people are six or fewer social connections away from each
other. As a result, a chain of "friend of a friend" statements can be made to connect any two people in a
maximum of six steps. It is also known as the six handshakes rule.
founder of the science: Steve Strogatz together with Duncan Watts
→ 40 people selected to bring a package to boston to Mark by asking family/friends
Phenomenon of synchronicity
How can populations of dissimilar individuals synchronize?
→ bv crickets. Each cricket responded to the others, but individual crickets testing did not work
To understand networks: six degrees → it makes a small world (yet very clustered)
But… if I know 100 people, and person B as well, a lot of overlap between those people
Mathematical model:
Crowd in a soccer game → getting a message from one side to the other side
If you have walkie talkie, you can connect in fewer steps to the other side
→ one single link has enormous effect,
KEVIN BACON:
Linking every actor to just one star – extract path to kevin bacon
⇒ Steve Strogatz & Duncan Watts used the kevin bacon game
Laszlo Baeabasi: looking at networks from a different perspective
– predict the future. Events are never isolated, so we need to understand how they interact
- Organized principle based around hubs (amazon, google,..)
→ a lot of people who used this
3
