The Triad: Organizational Cultural Values, Practices and Strong Social Intra-Firm Networks

By Khoja, Faiza | Journal of Business Strategies, Fall 2010 | Go to article overview

The Triad: Organizational Cultural Values, Practices and Strong Social Intra-Firm Networks


Khoja, Faiza, Journal of Business Strategies


Abstract

The primary purpose of this research paper is to demonstrate the role, strong organizational culture plays in transforming a loosely connected organization to one with strong ties. The results of this study indicate that business units are likely to get assistance from other sister business units to accomplish tasks in a timely manner and to be innovative. Cultural practices, such as open communication and rewards incentivize units sufficiently to do so. It is found that cooperative values indigenously motivate units to develop strong networks and do not require the added inducement of collective rewards or open communication, as these practices seem to be resonant in values of cooperation.

The Relationship between Organizational Cultural Values, Practices and Strong Social Intra-firm Networks

In the past decade, strategists have studied the pervasive phenomenon of social networks or social relationships at various levels of analysis both within and outside the organization (e.g. Ahuja, 2000; Brass, Galaskiewicz, Greve, & Tsai, 2004; Gulati, 1998; Gulati & Singh, 1998; Hansen, 1999; Kraatz, 1998; Nohria & Eccles, 1992; Tsai & Ghoshal, 1998; Tsai, 2000 etc.). In this study, intra-firm or intra-organizational networks are analyzed, which allows units within an organization to develop new knowledge while cultivating existing know-how (Khoja & Maranville, 2009; Tsai & Ghoshal, 1998). Intra-firm or intra-organizational networks are defined as 'a set of relationships among business units of the same legal firm that interact with each other to exchange resources, information, and/or services' (Achrol & Kotler, 1999).

Most of the research studies, to date, have primarily analyzed the characteristics of intra-firm networks or lateral linkages) such as network centrality, (2) structural holes, (3) tie-strength, (4) network size, (5) and network density (6) to assess performance, innovation, resource (knowledge) accumulation, and sharing, to name a few. The associated independent variables studied are trustworthiness, shared vision, strategic relatedness, absorptive capacity, centralization, formalization, geographic distance, internal competition, and, more recently, divisional subculture. The dependent variables under investigation have been knowledge and information sharing, organization learning, time for new product development, innovation, and performance, to name a few (Gupta & Govindrajan, 2000a; Hansen, 1999, 2002; Hansen & Lovas, 2004; Hansen, Mors, & Lovas, 2005; Marx, Lechner, & Floyd, 2006; Powell, 2003; Skerlavaj & Dimovski, 2006; Tsai, 2000, 2001, 2002; Tsai & Ghoshal, 1998; Walter, Lechner, & Kellerma, 2007).

More recently, Khoja and Maranville (2009) found that strong intra-firm networks enhance intellectual capital and that this relationship is further strengthened by absorptive capacity (7). In addition, Hansen and Nohria (2004) posited that although firms can create value for themselves through inter-unit collaboration, they do need to overcome certain barriers by using a few 'management levers.' The barriers include units' '(1) unwillingness to seek input and learn from others, (2) inability to seek and find expertise, (3) unwillingness to help, and (4) inability to work together and transfer knowledge.' The management levers include 'leadership behavior, shared values and goals, human resource procedure, and lateral cross unit mechanisms.'

As organizational culture is the backbone of any organization and determines a firm's strategy and structure (Deal & Kennedy, 1999), it becomes imperative to learn about the role culture plays in establishing social networks within organizations that is likely to assist units to collaborate, share, and exchange resources to attain competitive advantage. The research question addressed in this study is: 'how does strong organizational culture facilitate strong intra-firm networks? …

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