The effect of social networks structure on innovation performance: A review and directions for research

Research on growth of innovations introduced to the market has gradually shifted its focus from aggregate-level diffusion to exploring how growth is influenced by a given social network structure's characteristics. In this paper, we critically review this branch of literature. We argue that the growth of an innovation in a social network is shaped by the network's structure. Borrowing from the field of industrial organization in economics, which defines itself as the study of the effect of market structure on market performance, we describe this new wave of research on growth of innovations as the effect of social network structure on innovation performance. Hence, social network structural characteristics should be incorporated into research on new product growth as well as into managerial marketing decisions such as targeting and new product seeding.We review how social network structure influences innovations' market performance. Specifically, we discuss (1) a networks' global characteristics, namely average degree, degree distribution, clustering, and degree assortativity; (2) dyadic characteristics, or the relationships between pairs of network members, namely tie strength and embeddedness; (3) intrinsic individual characteristics, namely opinion leadership and susceptibility; and (4) location-based individual characteristics, namely the degree centrality, closeness centrality, and betweenness centrality of an individual network member.Overall, we find that growth is particularly effective in networks that demonstrate the “3 Cs”: cohesion (strong mutual influence among its members), connectedness (high number of ties), and conciseness (low redundancy). We identify gaps in current knowledge, discuss the implications on managerial decision making, and suggest topics for future research.     

Top management team’s formal network and international expansion of Chinese firms: The moderating role of state ownership and political ties

This article explores the role of the formal network centrality of top management teams (TMT) for foreign expansion, looking at the case of Chinese firms. The former is defined by the degree to which top managers are connected with TMTs of other firms in formal ways, through service as independent board members. We explore boundary conditions, comparing state ownership with political ties. The analysis of a panel data of 489 firms expanding to 72 developed and developing host markets in the period 2000–2012 confirms that network centrality facilitates internationalization. We found that TMT network centrality had a stronger effect on internationalization in developed than emerging markets. Conversely, state ownership had a positive moderating effect in the latter and political ties a negative effect in developed ones. The literature on comparative institutional analysis suggests that formal ties are more important in developed economies, and informal ties in emerging ones. However, formal political ties and/or links to the Chinese state may be more of value in internationalizing into other emerging markets, where the balance of diplomatic power may be more skewed in China’s favor.     

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).     

Unique but integrated: The role of individuation and assimilation processes in teen opinion leadership

Opinion leaders propel the diffusion of innovation and exert a significant influence on the marketplace. This influence is especially pronounced during adolescence, a period marked by increasing reliance on peers and the emergence of a tension between two countervailing needs: assimilation and individuation. A survey of 1142 adolescents reveals that these developmental needs affect adolescent opinion leadership in the critical clothing market. Adolescent opinion leadership relies on a balance between desires for assimilation (i.e., centrality within the peer network) and individuation (i.e., need for uniqueness); adolescents' susceptibility to peers' normative influence and gender moderate these relationships. Adolescents who occupy central positions within their peer network tend to be opinion leaders, though only if they are not susceptible to normative influence. Position within the peer network is a key for girls, whereas need for uniqueness is a key for boys. These differences implicate different approaches for managers targeting adolescent males and females.     

Experience, socialization and customer retention: Lessons from the dance floor

Experience and socialization are key factors in customer commitment and defection decisions. To study the effect of experience and social relationships on customer retention, we analyze a reality-mined co-presence network of health club members over a period of 4 years. Since central customers in the network have more social ties they will lose if they defect, we use centrality as a proxy for customer relationship switching costs. We find that long-standing customers do have a lower chance of renewing their contracts. However, in line with theoretical predictions (Burnham et al., Journal of the Academy of Marketing Science 31(2):109–126, 2003), the consumer’s centrality in the network (reflecting a social cost of defection) reduces customer churn rate. This study’s results indicate that the inclusion of social effects increases the predictive power of the customer churn model (Nitzan and Libai, Journal of Marketing 75(6):24–38, 2011), thus contributing to our understanding of the role social networks play in customer decisions.     

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.     

Leadership Centrality and Corporate Social Ir-Responsibility (CSIR): The Potential Ameliorating Effects of Self and Shared Leadership on CSIR

Recent scandals involving executive leadership have significantly contributed to the topic of corporate social responsibility (CSR) becoming one of the most important concerns of the management literature in the twenty-first century. The antithesis of CSR is embodied in executive corruption and malfeasance. Unfortunately such things are all too frequent. We view the degree of centrality of leadership, and the primary power motivation of leaders, as key factors that influence the engagement in corruptive leader behavior and consequent corporate social ir-responsibility (CSIR) in organizations. Shared and self-leadership, on the other hand, we introduce as alternatives to traditional top-down centralized views of leadership that can establish needed checks and balances capable of reducing corruptive tendencies. We offer a conceptual model along with several propositions to help guide future research and practice.     

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.     

虚拟社区成员强化动机对品牌选择行为的作用机理

网络社交媒介的涌现导致企业越来越趋向于以虚拟品牌社区的方式进行产品营销,并试图通过这种方式将企业品牌形象深植到消费者心中,进而形成较高的品牌忠诚度。鉴于此,可基于社会网络、品牌社区等理论,构建社会强化动机、网络中心度及虚拟品牌社区成员品牌选择行为之间关系的理论模型,进而通过设计问卷对虚拟社区成员进行调研,检验社会强化动机对虚拟品牌社区成员品牌忠诚度的作用机理,探究网络中心度在虚拟品牌社区强化动机与品牌选择行为之间的中介作用。研究发现,社会强化动机能有效提高虚拟社区成员的程度中心度和中介中心度;虚拟社区成员的程度中心度和中介中心度越高,社会强化动机越强,其对虚拟社区的归属感越强;成员的社区归属感越强,越倾向于保护自己的品牌并抵制竞争品牌。由此可见,企业为更好地进行虚拟品牌社区管理,需要注重对成员社会强化动机的激发,鼓励成员参与社区活动;需要重点关注网络中心度高的成员,激发其信息分享热情;需要致力于虚拟品牌社区建设,不断增强成员归属感。     

Accelerating new product diffusion: How lead users serve as opinion leaders in social networks

In social networks or, more specifically, online communities on tech-products, opinion leaders are important sources of advice for other consumers in the adoption and diffusion of new products. However, possibilities for potential users to exert their influence on opinion leadership are ignored. This study determines whether and how lead users may serve as opinion leaders in social networks and advise other consumers in the adoption and diffusion of new products. Our survey with 308 users in the Xiaomi and Huawei communities suggests that higher lead userness is positively and significantly associated with the likelihood of opinion giving and passing. Product-possessing innovativeness has a higher impact compared with information-possessing innovativeness. Product involvement does not enhance the effect of information-possessing innovativeness. The findings provide a better understanding of the formation of opinion leadership in social networks for an accelerated diffusion of new products.     

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.     

Host country network,industry experience,and international alliance formation: Evidence from the venture capital industry

Integrating resource dependence and social network theories, we investigate how foreign firms’ position in alliance network in host country influences their further allying with firms from the host and home countries. We introduce network centrality as a factor that influences two competing forces in alliance formation: willingness and attractiveness. Furthermore, we argue that foreign firms suffering from a low network centrality may find it easier to enhance their network position if they have industry experience. Our analysis of data on US venture capital firms’ investment in China supports our theoretical framework. Theoretical and managerial implications of our findings are discussed.     

Princes and Paupers: Network Ties and Financial Contributions Among Nonprofit Arts Organizations

ABSTRACT

In the United States, nonprofit organizations are the primary vehicle through which wealthy patrons nurture arts and culture. They provide support for theatres, orchestras, operas, and ballet troupes of all sizes, as well as museums, galleries, zoos, and public radio and television stations. The survival of this subsector is dependent on the ability of individuals and foundations to raise and funnel money to the almost 7,000 nonprofit arts and cultural organizations in the United States. Nonprofit arts organizations have historically fared well during periods of financial constraint, in part because they have not depended heavily upon government subsidies. But another explanation for this stable funding picture may be the networks of overlapping board member and interpersonal ties of collegiality and friendship which characterizes the world of nonprofit arts organizations.

We began our research with the idea that network position, particularly as measured by network centrality, is an important resource for nonprofit arts organizations. We hypothesized that the more central an arts organization is in the entire network of for-profit and nonprofit arts organizations in the community, the greater will be the level of support it can generate from local donors. We also hypothesized that the more wealthy a nonprofit arts organization, the more central it is likely to be in the entire network of for-profit and nonprofit organizations.

Using an extensive database of almost 3,000 directors in the Louisville, Kentucky area, and special computer-based network analysis software packages, we were able to calculate the precise centralities of local arts organizations within a network of 149 organizations, corporations, and umbrella funding agencies. In order to determine the local financial support, we collected the 1990 IRS (Internal Revenue Service) Form 990 returns for nineteen of the twenty-five organizations (76%) we identified as active in the Louisville area. After determining organizational centrality, we did a bi-variate analysis between the centrality of an individual arts organization and total organizational wealth. What we found was that centrality is strongly associated with level of contributions and weakly associated with overall wealth. We believe that nonprofit arts organizations can take deliberate steps to maximize this resource by being aware of the other organizational (and social) ties of prospective directors.     

Political Skill,Gender, and Social Network Positioning of Chinese Employees

We collected data from 156 Chinese hospital employees to investigate how political skill and gender affect their advice and friendship network positioning. We found employees with high levels of political skill are more likely to proactively seek friendship ties, while political skill does not affect employees’ advice networks overall. In addition, results show that for men, those with high levels of political skill have lower in-degree centrality in advice and friendship networks than those with less political skill. Political skill does not affect women’s network positions.     

Opinion leadership vs. para-social relationship: Key factors in influencer marketing

The literature on influencer marketing has identified opinion leadership of influencers and parasocial relationship with influencers as two focal constructs affecting followers' purchase intention; yet they are only studied in isolation. This research aims to provide a comprehensive understanding of the effects of the two key constructs by combining and comparing them in a model with the moderators of post characteristics, namely post type and correspondent inference. Empirical results from 409 online followers of two Instagram accounts confirm the complementary effects of opinion leadership and parasocial relationship in influencer marketing and reveal the more prominent role of parasocial relationship over opinion leadership in affecting followers’ purchase intention. These effects are moderated by post characteristics. Storytelling posts intensify both effects. Correspondent inference enhances the effect of parasocial relationship, but not that of opinion leadership. These findings point to the importance of the social aspect of influencer marketing and inform the influencer marketing research and practice on “who says what” for improving communication effectiveness.     

Consumers engaged in a member-gets-member campaign: an agency perspective

In this article, the use of member-gets-member-campaigns is perceived as an agency problem: the agent (a consumer) is going to take some action on the principal's behalf (a manufacturer). However, before the principal decides to engage the agent in their member-gets-member campaign, the principal needs to know whether a particular agent has the appropriate characteristics and whether the agent will have the proper motivations to behave in accordance with the principal's goals. Moreover, the principal needs to know how the agent's ideas and behaviour can be changed. In this article, concepts from opinion leadership, social network theory and attitude research are used to test and evaluate the characteristics of the agent, who voluntarily participated in a member-gets-member campaign of a large producer of several brands of dog food. The outcomes show that agents that participate in the member-gets-member campaigns have characteristics which might be desirable for the manufacturer: these agents are opinion leaders and have a positive brand attitude. To some extent, these agents also ask permission from the consumer whether they are allowed to make them members and seek membership from people with whom they have close ties. The results also show that the agents positively respond to incentives used by the manufacturer. In general, the agents are not motivated to oversell the membership to the consumers.     

Race,sex, and fashion innovativeness: A replication

This article reports a study of differences in self-reported fashion innovativeness, fashion opinion leadership, and spending for new fashions between middle-class blacks and whites of both sexes. The data was obtained by a mail survey from a random sample of 568 consumers from five states. Analysis of covariance with the effects of age and income controlled indicated (1) a strong main effect for sex, with women reporting greater fashion innovativeness, opinion leadership, and spending than men; (2) a weak main effect for race, with blacks reporting greater innovativeness, opinion leadership, and spending than whites. The difference between the sexes was larger than the difference between races, and no interaction effects were observed.     

The Contingent Value of Entrepreneurs’ Political Capital: Evidence from China

ABSTRACT

Who benefit from a transitioning economy, entrepreneurs who are politically connected or disconnected? Market transition theory and power conversion theory offer two divergent answers. Our study seeks to contribute to this debate by examining the contingent value of entrepreneurs’ political capital. We draw from social network theories and investigate whether and how entrepreneurs’ social networks influence the relationship between their political capital and social mobility. Using the data on Chinese entrepreneurs, we find that the impact of political capital on entrepreneurs’ social mobility is contingent on their network centrality. Practical implications and suggestions for future research are also discussed.     

Cross-decision social effects in product adoption and defection decisions

Researchers and practitioners have long been aware of the capacity to use information on consumers' product adoptions and defections to forecast the adoption and defection behavior of others in their social networks. Yet, herein, we suggest that such information still holds substantial untapped predictive potential. Specifically, this paper is the first to define and investigate cross-decision social effects, i.e., the effects of customer defections on network neighbors' adoption decisions, and the effects of customer adoptions on network neighbors' defection decisions. We incorporate these effects into a conceptual framework that enables us to explore them concurrently with same-decision social effects (the effects of adoptions on adoptions and of defections on defections), which have been researched extensively. We develop a multi-event hazard model to describe this framework, and estimate it using two unique data sets on a communication network and on adoption and defection dates for a mobile add-on. We obtain strong empirical evidence for negative cross-decision social effects that are larger for strong ties than for weak ties.     

Individual knowledge sharing behavior in dynamic virtual communities: the perspectives of network effects and status competition

Purpose

While most literature concerning knowledge sharing examines it as an organizational method for innovation and value creation, this paper considers online knowledge sharing as an individual behavior decision embedded in a virtual community. We attempt to explore which sharing behavior can help individual participants gain a better position in an online community, improving social status, reputation, and other social networking interests.

Design/methodology/approach

We collected and measured the knowledge sharing activities and discussion from a Chinese online expertise knowledge network in Business Management Consulting. We tested the mediating effects of the sharing behavior of the major members of the online knowledge network on members’ status (network centrality) in different time units (days).

Findings

In a dynamic virtual community, the direct result of knowledge sharing behavior is reflected in the individual status position (the degree of node centrality). At the same time, individual knowledge sharing behavior has an “inertia effect”: individual prior status (the degree of node centrality) affects current knowledge sharing behavior, while current knowledge sharing behavior affects current status in the knowledge network, forming an inertial circuit between personal behavior and network status.

Originality/value

We expound the theory of individual knowledge sharing in the context of an inter-person dynamic virtual community; we provide action “strategies” for individual knowledge sharing behavior choice, for better understanding the nature of individual knowledge behavior, and we also propose and test the “inertia effect” of knowledge sharing behavior and the knowledge network, and demonstrate the theory of network effects from an individual perspective.