Asymmetric roles of business ties and political ties in product innovation

This study investigates the asymmetric roles of business ties and political ties in innovation processes. The study posits that business ties strengthen organizational competence and enhance the environmental fit. In contrast, political ties increase the environmental fit but ossify organizational internal routines. The study uses an extensive survey on 766 Chinese firms across multiple sectors to test hypotheses. The empirical results provide strong supports for hypotheses by showing that: (1) business ties have a positive impact on product innovation, indicating that despite different types of business ties, they share common features in enhancing product innovation; (2) political ties have an inverted U-shaped relationship with product innovation, indicating that the positive effect of political ties on product innovation would diminish as the costs of political ties outweigh the benefits.     

How habits, social ties, and economic switching barriers affect customer loyalty in contractual service settings

While existing literature acknowledges positive effects of satisfaction and economic switching barriers for building customer loyalty, studies analyzing interactions of these antecedents reveal mixed findings. Prior research does not consider, as antecedents of switching barriers, either habits or social ties that result from shared service-usage within a family or community. This paper contributes to the literature, first, by replicating the effects of satisfaction, economic switching barriers, and their interaction with customer loyalty and word-of-mouth of subscribers to a contractual service. Second, the study empirically tests the role of social ties as a social switching barrier. Third, the study introduces and tests the effects of habits as a precursor of economic and social switching barriers. Results reveal significant positive effects of satisfaction, economic switching barriers, and social ties on customer loyalty and word-of-mouth. Additionally, economic switching barriers and social ties interact significantly with satisfaction and habits act as a precursor of economic switching barriers and social ties.     

Affective networks,informal ties,and the limits of expatriate effectiveness

Expatriate effectiveness research has so far rarely taken into account the influence of social networks on expatriate performance and adjustment. Likewise, antecedents of social networks remain poorly understood. We fill this research gap by exploring the situation of expatriates in South Korea. Based on expert interview data, we have discovered seven antecedents critical to expatriate effectiveness. Most antecedents hinder expatriate effectiveness due to the expatriates’ inability to become a part of so-called Yongo networks, a distinctive type of social tie in South Korea that is to a great extent determined by birth. As a consequence, it is in particular expatriates’ relational performance and interaction adjustment that is negatively influenced by Yongo. Based on the South Korean case, this study advises future research to more deeply study the nature and characteristics of the local social context, in particular affective ties, and extend research on expatriate effectiveness in this important dimension. Finally, we discuss practical implications important for multinational corporations and provide suggestions on how to better cope with exclusive informal social networks while on an assignment abroad.     

Structural replacement or structural inducement: government ties of Chinese business executives

We suggest that the structural replacement thesis, which proposes that managers in Chinese nonstate-owned enterprises (NSOEs) possess more government ties than managers in Chinese state-owned enterprises (SOEs), is theoretically incomplete because it considers only the motivation of managers of NSOEs. The extensiveness of social ties is influenced also by the capability and opportunity for social actors to cultivate these social ties. We introduce the structural inducement thesis, which holds that SOE managers have more government ties than do NSOE managers, as an alternative to the structural replacement thesis. Our analysis of 250 Chinese managers' ties supports this structural inducement thesis. The theoretical and applied implications of these findings are discussed. Copyright © 2009 ASAC. Published by John Wiley & Sons, Ltd.     

健全和完善密切联系群众机制引导员工积极投身企业发展事业中来

坚持走群众路线,密切联系群众,是我们党始终立于不败之地的政治优势.国有企业是中国共产党执政的重要经济基础,要应对各种困难和挑战,在市场竞争中立于不败之地,必须健全和完善密切联系群众机制,把员工的心智凝聚到企业发展事业中来,从而促进和保障企业又好又快发展.     

Valuing customers for social network services

In the current Internet environment, many online service companies based on community factors (networks) produce and sell new types of digital products. For example, SNS (social network service) companies now sell customers digital decorative products for the adornment of online avatars. Not only do individual customers consume these digital products, but they also exchange them as gifts in their local neighborhoods. While previous studies on customer valuation (e.g. CLTV, RFM, etc.) focus on some important issues for identifying valuable customers, the literature does not resolve issues related to the effects on customer value of products purchased as gifts for another person. This study attempts to verify empirically the effects of two representative social network properties (tie strength and the number of ties) on customer monetary value.This study selects 2615 customers from a South Korean SNS website who enrolled on the site on the same day. Data include diverse purchase-related information, social network properties in terms of gift-giving for six months, and demographic information. The primary results of this study are as follows. First, the proposed model, which includes social network properties, has a great deal more explanatory power than the baseline model — the RFM-based customer value model. Second, tie strength and the number of ties in a gift-giving network increase customer value. Third, tie strength has a more profound impact on customer value than does the number of ties. The results of this study theoretically expand the domain of customer valuation studies due to the inclusion of social network properties, and suggest important practical implications for some online SNS companies in their efforts to find valuable customers and improve customer value.     

From conformity to reactance: Contingent role of network centrality in consumer-to-consumer influence

Central consumers in a group often are influential, because their social prominence commands conformity from other members. Yet, there can be another contradictory effect of centrality, such that other members regard it as a threat to their attitudinal freedom and express reactance instead of conformity. Whether a group member conforms or reacts to the evaluation of a more central member might depend on the strength of their relationship, which determines the social cost of disagreeing. We provide evidence of such an interaction between centrality and relational strength with an experiment where participants with preexisting affective ties of varying strengths taste a snack in groups (Study 1) and a field study where participants connected by instrumental ties consume a complex service (Study 2). A scenario-based experiment manipulating centrality and strength of ties provides further evidence that reactance underlies the observed effects (Study 3).     

When Online Visibility Deters Social Interaction: The Case of Digital Gifts

One of the defining features of online social networks is that users' actions are visible to other users. In this paper, we argue that such visibility can have a detrimental effect on users' willingness to exchange digital gifts. Gift giving is an intimate activity that comes with social risk, and the public nature of online environments can deter interactions that usually occur in smaller, more intimate settings. To study the effects of online visibility on the decision to give, we analyze a unique dataset from a large online social network that offers users the option of buying a digital gifting service. We find that purchase rates of the service increased with the number of ties that users kept on the network, but decreased with the extent to which those ties were connected to each other. We argue that the latter effect is due to the fact that, when a user's ties are connected, any gift sent between the user and one tie is visible to their mutual contacts. We explore how characteristics of users' networks moderate the effect of online visibility, and argue that firms should take consumer network structure into account when designing digital products and promoting engagement online.     

With whom should you have dinner? A multidimensional framework for understanding political ties in China

Political ties are often considered a critical resource for firms to succeed in China. The way companies build political ties receives noticeably less attention. Academic research traditionally uses the prior government work experience of firms’ top management, in addition to executive membership in the National People’s Congress (NPC) and/or the Chinese Communist Party (CCP), as surrogates to quantify political ties. However, such measurements only expose the tip of the iceberg and do not sufficiently answer questions about how these connections are organized and controlled. Drawing insights from institutional theory, in this article we introduce a multidimensional framework to shed light on the study of political ties in China. Specifically, by using the framework of regulative, normative, and cognitive institutional pillars, we identify government work experience, political membership, family connections, shared social identity, and instrumental exchange as effective ways of building political ties in China. We also discuss theoretical and managerial implications, as well as limitations to our research.     

Profit for friends,fairness for strangers: Social distance reverses the endowment effect in proxy decision making

Buyers often price a product lower than sellers do, a pricing discrepancy known as the endowment effect. We investigated the way buyers and sellers change their pricing decisions as a function of social distance when making decisions on behalf of another person. In Study 1, the pricing discrepancy persisted when making a decision for a close social contact whereas the pattern was reversed when making a decision for a distant social contact. Study 2 replicated this reversed pattern using a social proximity manipulation, and this effect was mediated by participants’ prioritizing of fairness over immediate profit of the transaction. The current work suggests that people allocate different value to objects depending on the subjective closeness towards another for whom they make the pricing decision.     

How foreign firms achieve competitive advantage in the Chinese emerging economy: Managerial ties and market orientation

As China experience unprecedented changes in its social, legal, and economic institutions, on what should foreign firms focus more to overcome this challenge, managerial ties or market orientation? This study investigates how managerial ties and market orientation affect competitive advantage and, consequently, firm performance in China. On the basis of a survey of 179 foreign firms in China, we find that both managerial ties and market orientation can lead to firm success—but in different ways. Market orientation enhances firm performance by providing differentiation and cost advantages, whereas managerial ties improve performance through an institutional advantage (i.e., superiority in securing scarce resources and institutional support). Institutional advantage, in turn, leads to differentiation and cost advantages and consequently superior performance.     

Network Characteristics and Firm Performance: An Examination of the Relationships in the Context of a Cluster

The study examined the impact of spatial relationships on firm performance. It also assessed the impacts of network structural and relational characteristics on performance, as well as the moderating effects of these variables on the spatial relationship to performance linkages. The sample comprised 252 firms located in a mold industry cluster in the Zhejiang province of China. Both in‐cluster ties and extra‐cluster ties positively impacted performance. However, the effects of distant ties were more pronounced. Tie stability had a positive effect whereas tie quality had a negative effect on performance. Network centrality, tie strength, and tie stability strengthened the relationship between in‐cluster ties and performance. By contrast, all network tie characteristics weakened and changed the form of the relationship between extra‐cluster ties and performance. The findings suggest the need for cluster firms to consciously cultivate distant linkages in their network ties in order to neutralize the tendencies for lock‐in and to arrest entropic deterioration in their respective clusters.     

Social ties between SME managers and bank employees: Financial consequences vs. SME managers' perceptions

We investigate whether social ties between SME managers and bank employees affect SME access to lending, investment, growth and profitability. On the one hand, we examine the influence of social ties on financial indicators based on SME financial statements; on the other hand, we study the impact of social ties on SME managers' perceptions of their firms' main banks. Using a dataset from Poland, we find that social ties improve SMEs' access to bank financing and stimulate their investments. However, this positive impact occurs only when social ties involve bank decision-makers. In contrast, SME managers perceive all types of social ties with bank workers as valuable.     

Network ties and export propensity of Vietnamese small and medium enterprises

This paper investigates the impacts of different network ties on export propensity of Vietnamese small and medium enterprises (SMEs) in the manufacturing sector. Using data from a survey of over 2,600 manufacturing SMEs in 2015, we found that social networks contribute positively to the export propensity of SMEs, while the size of business networks negatively associates with the likelihood of export. However, bank networks and political networks are not significant for the propensity to export of Vietnamese SMEs. We discuss the results in detail and offer recommendations for SME owners, managers and policy makers.     

Innovation-based strategic flexibility (ISF): Role of CEO ties with marketing and R&D

In this research, using a capability perspective, we first define innovation based, strategic flexibility (ISF) as consisting of three lower-level capabilities- market sensing, resource reconfiguration, and proactiveness; then link it to new-product/innovation outcomes, and develop a new metric of ISF that is input–output based. This metric captures a firm’s realized flexibility in translating market opportunities into innovation output. We then examine the role of CEO ties with marketing and R&D in driving a firm's ISF. Combining survey data of 191 CEOs with objective performance data, we find that (a) ISF is positively influenced by the frequency and duration of the CEO's relationship with the two functional units, but negatively influenced by CEO's relationship closeness, and (b) ISF contributes to future profit growth of firms. We test the robustness of our findings to the potential violation of sequential-ignorability assumption as defined in the causal mediation literature and find the results to be robust. The results provide insights into the role of CEO characteristics in driving innovation, and upper echelon’s contributions to marketing.     

Entrepreneurial orientation,market orientation,network ties,and performance: Study of entrepreneurial firms in a developing economy

Entrepreneurial orientation (EO), market orientation (MO) and network ties are typically modeled as separate antecedents of performance. However, the boundary conditions for such models are under-explored, as is their applicability to developing economy settings. Accordingly, drawing on institutional and social capital theories, the current paper argues that the performance benefits of EO and MO are complementary, and vary across different levels of social and business network ties. Using primary data gathered from entrepreneurial firms operating in Ghana, the study findings indicate that aligning high levels of EO and MO improves business performance, and particularly so when social and business network ties are well developed, since under these latter conditions, the performance benefits of aligning EO and MO are greatest.     

Entrepreneurial orientation,entrepreneurial competencies,innovation, and performances in SMEs of Pakistan: Moderating role of social ties

The current study examines the mediating role of innovation and entrepreneurial competencies in entrepreneurial orientation’s relationship with financial, social, and environmental performance. This research also determines the role of social ties in strengthening the association between innovation and entrepreneurial competencies with social, financial, and environmental performance. Using multi-source and time-lagged studies, the data was collected from 297 small and medium-sized enterprises (SMEs) in Pakistan, and structural equation modeling was used to test direct, indirect, and moderating hypotheses. The findings show that entrepreneurial orientation, entrepreneurial competencies, and innovation positively correlate with all the types of performance under investigation and confirm the mediating role of innovation and entrepreneurial competencies. Additionally, social network ties strengthen innovation—financial performance, and entrepreneurial competencies—social performance relationship. This research proposes significant theoretical and managerial implications by determining the impact of entrepreneurial orientation on SMEs in Pakistan.     

Social ties and venture creation by returnee entrepreneurs

Recent years have witnessed the return of individuals of Indian or Chinese origin from developed markets to their home countries to start new ventures. Returnee Entrepreneurs (REs) facilitate both direct technology transfer and indirect technology spillovers to local firms, thus contributing to the technological development of emerging economies. Much previous work is based on the integration of ethnic entrepreneurs in their host countries or business activities of transnational entrepreneurs that traverse their host and home countries. This study explores the role of social ties in venture creation by REs. Based on twenty case studies in India, the findings show that (1) local ties are indispensable for venture creation, and (2) the heterogeneity in the way REs leverage social ties across the host and home countries is contingent on the location of their intention to start up and generation of idea for their venture. The implications of these findings are discussed.     

Entrepreneurial Attitudes as Drivers of Managers’ Boundary‐Spanning Knowledge Ties in the Context of High‐Tech Clusters

This study investigates the role of entrepreneurial attitudes for small and medium‐sized enterprise managers' tendency to create knowledge acquisition ties with managers of other organizations in the context of an institutionalized high‐tech cluster. We examine how innovation orientation, perceived personal control, need for achievement, and self‐esteem influence boundary‐spanning tie creation as a crucial facet of entrepreneurial behavior in the cluster context. Applying exponential random graph models to survey data collected in a German biotech cluster, we find that innovation orientation and perceived personal control positively affect managers' tendency to rely on interpersonal ties to gather knowledge. In contrast, need for achievement and self‐esteem are negatively related to knowledge tie creation.     

How does entrepreneurs' social capital hinder new business development? A relational embeddedness perspective

While most studies argue that, relational embeddedness, one facet of social capital, facilitates the obtaining process of scarce resources, our study cautions that it may exert negative impacts. This study examines the underlying process about how shared cognition influences new business development. Results from a survey on entrepreneur social network in China demonstrate that strong ties bring decision-making constraints for entrepreneurs to bear, while trust helps to lessen such restriction. Additionally, shared cognition should not become a preferred standard for entrepreneurs in choosing their network members, because simply relying on the intermediate role of tie strength engenders dark sides. Implications for research as well as for practice are discussed.