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The Conceiving stage of the competitive dynamics process is the initial formation of competitive actions and requires a driver or motivation toward competitive action, the exchange of internal and external information and tacit and explicit knowledge among FCI‘s managerial participants about competitive activity, and information flexibility, or the adaptability of informational conditions when internal or external circumstances change within or around the competitive environment. Thus, at a point defined as Information Flow, antecedent conditions have been met to proceed toward a complex decision process. The managerial social network at the Conceiving stage of New Product Development is depicted in Figure 3 below.
The Conceiving Social Network contains 16 nodes and 101 ties, and has a combination of both strong and weak ties. Recall Granovetter‘s (1973) position that new or novel information and knowledge is provided via weak-tie links. It is during the Conceiving stage that new and novel information and knowledge play the most vital role.
However, Hansen (1999) suggests that strong ties are necessary for transferring tacit knowledge among network participants, which is also vital at the Conceiving stage. This
perspective is voiced by an FCI Manager:
A lot of what it takes to make decisions can‘t come directly out of [the ERP system] or off of a report. A big part of what goes in to making a decision on
A clearly defined strong-tie cluster can be found among various managers including the COO, the General Manager, the Director of R&D, the Director of Production, the Director of Engineering and others who communicate and share information and knowledge frequently in the context of new product development. The relatively high number of direct ties (centrality measure degree) to the Network Administrator in this social network is noteworthy. The Network Administrator is playing a clear and important role in the stage where access to internal and external information, the distribution of tacit and explicit firm knowledge, and information flexibility are vital. Both the COO and Controller have a high number of direct ties, serve to bridge between disparate parts of the network, and have the shortest paths in the network. Interestingly, while the Controller does not figure prominently within the visual strong tie cluster, this manager plays a strong bridging role in the network. It appears that the Controller brokers connections between those managers most directly involved in new product development and those managers more indirectly involved. Actually, the Controller has the highest overall centrality measures in the network, with the greatest number of direct ties (degree), serving as the most important broker between disparate nodes (betweenness), and having the shortest path to all nodes in the network (closeness).
financial aspect of competitive activity:
My function is Corporate Controller. I manage the financial reporting, the financing of various aspects of the whole company, including [China]. I report to the CFO, [CFO‘s name]. I am directly responsible for the accounting and finance functions as well as the IT function. I make sure the money is there for whatever it is we are doing. (FCI Manager) New Product Development – Stage 1: Conceiving Centrality Measures Figure 4 As the CFO is the highest ranking manager with financial responsibility, it is logical that his strategic focus would be at a coarse-grained level. Thus, the Controller would be more closely involved at the actual competitive action process level, passing along
finding is strong support for the Capability perspective inherent in the A-M-C. While the Controller has no direct role to play in developing new products, he figures most prominently in the social network, as there is a vital need for firm-level information on resources that will enable competitive activity. Additionally, the Controller‘s quote above is interesting in the context of the representation of IT in the Conceiving social network, and provides some explanation for the location of the nodes representing IT in the network.
8.1.2. New Product Development – Stage 2: Enacting Social Network. In the Enacting stage, managers interact in a highly rational decision-making process.
Using relevant information, they evaluate possible actions, eventually choosing a course of action which is moderated by factors including the firm‘s culture, its growth strategy, and managerial perceptions. The social network at the Enacting stage in Figure 5 below is highly representative of this perspective.
The Enacting Social Network features 16 nodes, with 116 ties. While there is still some evidence of a cluster among those managers directly involved in new product development, the structure is consistent in form, where ties are relatively strong across the social network structure. These findings are consistent with Hansen (1999) who suggests that strong ties are necessary for transferring tacit knowledge, with strong ties indicating shared perspectives and common understanding, a necessity for consensusbased decision-making, and Anand, Manz and Glick (1998) who suggest other forms of soft knowledge such as ―…belief structures, intuition, and judgmental abilities…‖ (p.
797) are hard to communicate. As stated by one of the managers:
The prevalence of strong ties at this stage supports the notion that by the time managers have reached the enacting stage (decision-making) there is less need for new or novel information that is generally identified as provided via weak ties (Granovetter, 1973) and a greater need for tacit and experiential knowledge (Hansen,1999).
Figure 6 New Product Development – Stage 2: Enacting Centrality Measures The centrality measures indicate that again, the Controller figures most prominently in the social network, followed by the Director of Engineering, the COO, and the Director
activity managers need firm-level information and knowledge about organizational
We knew we wanted to pursue [developing a new product] but of course the money has to be there. (FCI Manager) Also, at the decision-making stage, the COO and Director of Customer Service will have relevant information and knowledge on various needed resources such as raw materials, production capacity, etc., and the Director of Engineering will have knowledge of capacity, machinery, etc. The Controller can still be seen playing a strong role as the broker between disparate areas of the network (strong betweenness measure), where managers must go through the Controller to reach certain other managers who are not directly involved in the development process, such as the CFO or CEO. However, the CFO and CEO may not have a fine-grained level of involvement. There also seems to be some consistency in the position of IT in the network, with the Network Administrator and the Director of IT being strongly tied to each other and the Controller. This can likely be explained through organizational structure, as IT and the finance functions are subsumed under one department.
8.1.3. New Product Development – Stage 3: Executing Social Network. In the Executing stage, managers are actively pursuing a course of action that was chosen in the Enacting stage. In the case of new product development, they are announcing the new product in the marketplace, actively promoting the new product to potential customers and identifying various ways in which the new product can be used. Conversely at this
Enacting stage. Abandonment may be due to a sudden shift in either internal or external economic conditions, or that managers did not have some piece of information at the time. Figure 7 below provides an interesting visual depiction of the social network at the Executing stage of competitive activity. This network features 17 nodes and 89 ties.
While the Executing Social Network has fewer ties than the previous two networks, Figure 7 depicts a system of relatively strong ties, with the Controller and COO again figuring prominently in the network. Figure 8 below provides the measures of centrality
New Product Development – Stage 3: Executing Centrality Measures Figure 8 At the Executing stage, the Director of Investor Relations is included in the competitive dynamics process. This is strong support for the role of the social network in firm-level awareness. By including the Director of Investor Relations, the managerial team recognizes the importance of new product development in terms of marketplace awareness for the first time. The Director of Investor Relations will now have access to needed information with regard to new product development for purposes of making the external markets aware of firm activity. However, it should also be noted that the
the Executing stage, and only as brokered through the Controller and CFO, supporting the importance place upon the financial impacts of competitive activity. It is interesting to note that the Controller plays a strong brokering position between the Director of IT, the Network Administrator, the VP of Finance and the other managers in the network, again, possibly due to organizational structure.
8.1.4. New Product Development – Stage 4: Firm Performance Social Network. Information on Firm Performance entails both objective and subjective measures of performance in market performance (market share, stock price, market area, market type, firm reputation, recognition in new markets, recognition of dominant product design) and financial performance (revenue (sales), costs, profitability, gross margin, and profit margin).
Figure 9 above provides the visual depiction of the final stage of the competitive dynamics process, Firm Performance. The Firm Performance Social Network features 17 nodes and 48 ties. Ties are relatively strong among the network participants. At this stage, the competitive action or response has been executed or abandoned and impacts upon firm performance are becoming known within the management team. Once again the measures of centrality provided in Figure 10 below emphasize the important positions held by the Controller and COO in the network.
At this stage, information about firm performance is diffused among the network participants, and returning to the context of Study I, Firm Performance information feeds back into the Conceiving stage of the competitive dynamics process. Thus, so in addition to the social network at this stage serving to increase awareness of network participants on the impacts of competitive actions on firm performance, these participants have possession of and may utilize this information in the context of future competitive activity. Fresh awareness may motivate or perhaps de-motivate future competitive actions, and refine firm-level knowledge on resource capacity (capability) to engage in action.
network configuration. The Controller has high measures of centrality in terms of degree, betweenness, and closeness. In fact, almost every connection between disparate nodes is brokered either by the Controller or the COO. Understanding the role of social computing and communications technologies in facilitating such connections may aid in understanding of the manner in which disparate managers either have access to or do not have access to information and knowledge.
Contrary to the baseline assumption, the analysis indicates that while some similarities do exist, managerial social network architectures are not consistent across the four stages of the competitive dynamics process. Although essentially the same managerial team is present at each stage of the competitive dynamics process and the COO and Controller figure prominently at each stage, the social network at each stage is configured differently. Managers will connect to other managers more or less frequently, given the knowledge and information needs inherent to a given stage.
These findings suggest that the nature of informal managerial social networks is much more complex than indicated by extant literature and network architectures cannot be predicted based upon the coarse-grained generalizations found in many existing studies such as equal social stature and physical proximity. Furthermore, the importance of organizational context (Ein-Dor & Segev, 1978; Sharma, 2000) cannot be discounted in understanding social network structure. While physical proximity of managers may play some role in the corporeal architecture of social networks, physical proximity does not necessarily include or exclude individuals from the composition or positions of
interpretations of organizational context, such as perceptions of hierarchy, identity, accessibility of resources, attitudes, among others. A social network analysis can provide valuable information about how competitive dynamics is implemented within an organization. The social networks described above are very telling in terms of positional influence and impacts this may have in the competitive dynamics process.
By grounding these findings within a firm-level Awareness-MotivationCapability perspective, differences in the findings in this study from extant research can be attributed to the distinctly unique nature of managerial contributions of and needs for expertise, information and knowledge at each stage of competitive activity, but also to the embedded role of social computing and communications technologies in the competitive dynamics social network infrastructure, which is explored in detail later in these findings.