Nonino, Fabio (2008) Network organizzativi informali e prestazioni aziendali: teoria ed evidenze empiriche. [Ph.D. thesis]
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The network is not only a concept, but an extraordinary portrayal of the reality around us: the world as we know it is a network. The world wide web, where daily billions of people are connected and work on, is a network; but also the food chain and its ecosystem, the cell system and the neural system in our body, the system which regulates the interaction among RNA, mitochondrion, proteins and molecules... the system of social relationships in which we are embedded, and which settles our success and the success of the enterprise where we work.
Some authors (for instance Salancik, 1995) claim that the study of networks in organizational research field hasn't yet led to a network theory, but it simply developed a methodology which contains a relevant number of tools, useful only to explain other theories. However new discoveries in the fields of physics, ecology, medicine and social behaviour has recently led scholars to talk of "network science". Networks do not have a random topology and they are not static objects: their transformation, growth, evolution and disaggregation follow precise rules, and probably these rules permit to talk of network theory (Barabasi, 2004). Some scientists, among which the major representatives are Duncan Watts and Albert-Laszlo Barabasi, gave incisive and captivate explanations to describe the network dynamics. These explanations permit to comprehend why sometimes the world wide web falls down under the hackers' attacks, why an epidemic disease spreads and another rapidly ends, why the financial markets are changing like ups and downs, and more interesting for managers, why a marketing strategy is successful or why an organizational structure results effective as far as internal diffusion of knowledge is concerned.
Nevertheless seventy years of research on social networks, originated from the Gestalt psychological research field, due to the first researches of Jacob Moreno (1934) and the first schools in Harvard and Manchester, produced extraordinary outcomes. For example the first ones are the six degree theory (Stanley Milgram, 1967), the strength of weak ties and the embeddedness theory (Mark Granovetter, 1973; 1985) and the network centrality measures (Linton Freeman, 1979). More recently, fundamental contributions to the network theory has been proposed by Daniel Brass (structural leadership, 1984), by Ronald Burt (structural holes theory, 1992) and by David Krackhardt (the strength of strong ties, 1992 and Simmelian ties, 1999).
The network theories are founded on a common key concept: the social capital (Bordieau, 1985; Coleman, 1988; Putnam, 1993). This concepts has been used to "measure" the value of the individual social network defined as the "the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit [...] comprises both the network and the assets that may be mobilized" (Nahapiet e Ghoshal, 1998: 243). The social capital is a resource both for an individual and both for organizations. The organizational social capital is a "resource reflecting the character of social relations within the firm [...] realized through members' levels of collective goal orientation and shared trust, which create value by facilitating successful collective action [...] an asset that can benefit both the organization and its members" (Leana e Van Buren, 1999: 538).
As concerns management, a theory of network would provide innovative, complementary or alternative interpretations to behaviours and to social, economic and organizational phenomena using the previous concepts and theories. Furthermore it would provide also tools and suggestions on how to face the complexity in managing an enterprise. This research does not want to enter in the academic discussion on the role of the networks in the management theory, but to give a concrete contribution to the foundation of the network theory, suggesting how the informal relationships structure affects on company performances and which informal relationships structure is the more effective in achieving the working goals both at individual level and department level.
The topic of this Ph.D. thesis is the study of the impact of informal organization networks on company performances, research field that is considered of remarkable interest both by academics scholars and both by managers, but that only in the last thirty years is flourished in international academic publications.
The "networking" advantages, as the set of the relationships (especially informal ones) have been widely emphasized in management. Every person is embedded in a social system and owns a social network; the structure and the position can give him a competitive advantage (or disadvantage) in identifying, gathering and interpreting fundamental information. These information can be used to develop new skills and to innovate procedures, product and services. However the network of informal relationships has a cost and the networking is not always advantageous: every tie needs time and energy resources, not only to be created but also to be maintained. And some ties are more expensive than others. For example the friendship and trust relationships require certainly more time and energy to be maintained than the acquaintance or the working relationships (which can be self-maintained by the company formal structure).
As highlighted above the companies owns an organizational social capital. But the organizational social networks are subjected to continuous changes due to external factors, as the entry of new actors in the working environment, but also internal ones like the need of mobility of the actors across the company's departments. This situation creates a perturbation inside the enterprise social networks, in which the effect on employees and organization units' performances is not still clear. Due to the continuous perturbations, the organization social networks change, set up and adapt, coming to other values of social capital.
If, for example, the effect of the substitution of an old employee with a new actor with more skills is theoretically to increase the knowledge and competencies of the enterprise, this does not mean that it will be turned in more efficacy and efficiency. In fact, the enterprise loses together with its old employee also his network of informal and personal relationships, resulting in a reduction of corporate social capital. These relationships helped him/her not only to reach rapidly his/her tasks, but also to those of his/her colleagues. However it has not to be excluded that the new employee, who reconfigures in a certain time the social organization relationship network, could lead the organization to a better efficacy and efficiency in the execution of one or more tasks. Another possible consequence of the turnover is the reduction in the value of the organizational social capital in terms of the value sharing having an effect on the orientation of the collective goals and of shared trust of the actors.
Therefore it is fundamental not only to identify who are the key-actors inside the enterprise, to comprehend which ones has to be promoted or moved across the enterprise in order to improve the organizational social capital, but also to understand how to manage turnovers and hirings to reach the enterprise tasks without negatively alter the organizational social capital.
In order to achieve this result, it is necessary to comprehend which informal dimensions (which type of relationship) affect on company's performances and mainly how the social network has to be structured in order to guarantee the organizational stability, but also its flexibility, that is essential for the enterprises to react in a successful way in the competitive environment. In particular, the doctoral research has been conducted with the aim to reach the following tasks:
1. identify through a literature analysis which and how many organizational informal networks exist and comprehend how these impact on enterprise performances;
2. rate the informal network classes identified during the literature review and link them in a conceptual framework;
3. empirically investigate the impact of informal organizational networks on company performances, mostly at individual level and then at team level (department/business unit).
The research project related to the main theme has been developed during the three years and it has been divided in four phases.
In the first preliminary phase, a first bibliographic research has been carried out; this helped us to identify the main models for the analysis of informal organizational networks and to recognize the Social Network Analysis (SNA) as the fundamental research methodology. Then an empirical test of models and of SNA methodology has been carried out in the Euris Group of Trieste pilot case, a knowledge-intensive enterprise that operates in the information services industry. The case study took us to interesting first results, and it stimulated also a more accurate definition of the research objectives, also on the basis of a theoretical deepening phase.
In the second phase of literature review, a deep analysis of the contributions available in literature has been performed, examining three different, but complementary, classes of studies: the ones on social capital; the ones on organizational theory more focused on the concept of informal organization (Chapter 2); and finally the ones more pertaining to the research subject: the structural analysis of intra-organizational networks (Chapter 3). The literature analysis allowed us firstly to delineate the historical evolution of the social network analysis application in organizational research (Chapter 1), but mostly to underline the characteristics of ten informal organizational networks that affect on company performances, and furthermore to delineate an interesting taxonomy on the basis of three different conceptual levels in the social capital theory (Chapter 5).
The need of defining a correct quantitative measurement of network characteristics, at individual (micro) and at groups (meso) level, and of the company performances required a challenging refinement process of the methodology and of the SNA questionnaire (Chapter 4), a process carried out in the third phase through three other pilot cases: the Management Engineering Laboratory of the University of Udine to improve the questionnaire, the Cybertec to test some informal networks not included in the previous pilot case Euris and the case Cosberg Group to perfect the overall Social Network Analysis methodology (Chapter 6).
In the fourth phase a longitudinal case study has been carried out on two different time periods at multiple level analysis and with multiple procedure of data-gathering, in order to empirically investigate and measure the informal relationship structure developed by the employees in an enterprise and, in the meantime, to evaluate the typologies of ties that mainly impact on the individual and on the department/business unit performances (Chapter 7).
The case study had as investigation unit the relationships and the informal relationship structure of the employees of the Euris Group. A model of measurement through statistical techniques, such as Multiple Regression Quadratic Assignment Procedure (MRQAP) and Hierarchical Linear Modeling (HLM), has been developed in order to evaluate the impact on individual and on department performances. The replication of the research has been conducted after six months and provides some confirmations of the previous results and improved their interpretation.
In conclusion, the analysis of the data collected (Chapter 8 and 9) allowed us to reach different results (Chapter 10):
1. from an academic point of view, to suggest a taxonomy of the informal organization networks and a theoretical model that underlines their impact on company performances, mostly at individual level and secondly at group level (business unit);
2. from a managerial point of view, to outline some guidelines that can help the firms in the design of the internal formal structure reorganization policies, aligning the formal structure to the informal relationship network of their employees in a more effective way.
The future researches will move through two paths: the first concerns with enlargement of the sample that will allow a better generalization of the results, while the second concerns the development of an advanced simulation model for the dynamic analysis of the actors behaviour inside an organization.
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