1. Social Networks&Social CapitalWEB PresentationMason A. CarpenterMason A. Carpenter

2. Networking Like Obama? Gogo Erekosima, Innovate Africa Project Mason A. Carpenter 3. Outline Some definitions Context Research Assess Going forwardMason A. Carpenter 4. Outline Some definitions Context Research Assess Going forwardMason A. Carpenter 5. Definitions A social network is a social structure made of nodes (which are generally individuals or organizations) that that are connected together by ties. Social capital is the resourcessuch as ideas, information, money, and trustthat you are able to access through your social network. Mason A. Carpenter 6. Definitions A broker is someone who connects (bridges) different subgroups in a network; subgroups can be functions, departments, divisions, locations, and any other dividing characteristic (age, gender, and tenure for instance) A connector is someone whom others consult frequently for information, resources, expertise, or decision-making help in the network. A super connector is someone who makes a disproportionate number of connections, or provides a bridge between otherwise unconnected, large networks.Mason A. Carpenter 7. Definitions Comrade Trusted member of your professional network that is closest to you and who can speak honestly about your goals. This circle of individuals is usually around 7. Colleague Member of your inner ring of up to 150 people. Contact Your entire network (essentially the phone book!)www.upmo.com Mason A. Carpenter 8. BrokersConnectors or super connectorsDirection of resource flowMason A. Carpenter 9. The org chartEgo & Whole Networks Networkshow work actually gets done Mason A. Carpenter 10. Outline Some definitions Context Research Assess Going forwardMason A. Carpenter 11. Our Predispositions Networks arent manageable = Networking A time sink Risky External (like Facebook) Informal Mason A. Carpenter 12. Rare? If everyone hadsuper powers, therewould be no superheroes. Syndrome fromDisneys The Incredibles Mason A. Carpenter 13. Rare? Nationally, more Americans are bowling than ever before, but individual play has largely supplanted team play (Putnam, 2000) From 1985-2004, the percentage of individuals in businesses who identified a co-worker as a close confidant in their discussion networks declined from 48% to 30% (Kacperczyk, Sanchez-Burks, & Baker, U Michigan working paper 2009) Mason A. Carpenter 14. Who you know, or what you know? Wh o y o u k n o w, d e t e r m Mason A. Carpenter 15. Pipes vs. TiesMason A. Carpenter 16. Context - Summary Our biases and predispositions Social networks are becoming diffuse Who you know What you know Pipes and tiesMason A. Carpenter 17. Outline Some definitions Context Research Assess Going forwardMason A. Carpenter 18. Research Psychology & Sociology Management & Strategy Finance Cross Cultural Mason A. Carpenter 19. Psychology & Sociology Milgrams Small Worlds (PT 1967) Granovetters Getting a Job (1974) In a large electronics company, managerial compensation, positive performance evaluations, promotions, and good ideas are disproportionally in the hands of people whose social networks span structural holes (Burt, AJS 2004) Among managers, bankers, and analysts, social capital resources are dramatically concentrated in the immediate network around a person (Burt, AMJ 2007)Mason A. Carpenter 20. Management & Strategy Nature of network ties affects how well board directors perceive their ability to contribute to and monitor firm strategy (Carpenter & Westphal, AMJ 2001) CEO paid more and more strongly linked to firm performance when other social network characteristics were present (Carpenter, Sanders & Gregersen, AMJ 2001) Non-exec managers paid more when background plugged a strategic network need (Carpenter & Wade, AMJ 2002)Mason A. Carpenter 21. Management & Strategy Search-transfer paradox. Weak ties promote knowledge of opportunities (information search), but strong ties are needed to access and transfer the actual knowledge and related technology (the transfer issue) (Hansen, ASQ 1999) Super connectors in science a disproportionate number of inventions are spawned by a select few scientists; this phenomenon is growing stronger, and such scientists are increasingly mobile across organizations and industries (and despite non- compete clauses) (Flemming & Marx, SMR 2006) Mason A. Carpenter 22. Finance Geographically proximate stock analysts are more accurate than other analysts (Malloy, JoF 2005) Mutual fund portfolio managers place bigger bets and yield greater returns from firms they have social network ties to (Cohen, Frazzini, & Malloy, JPE 2008) Analysts outperform on their stock recommendations when they have social network ties to a focal firm (Cohen, Frazzini, & Malloy, HBS working paper 2008) Mason A. Carpenter 23. National culture National culture and social networking Not extensive research on differences Nationality does not appear to excessively constrain entrepreneurs Hofstedes cultural dimensions of power distance, individualism/collectivism, and masculinity are relevant http://www.geert-hofstede.com/ G. Hofstede and R. R. McCrae Personality and Culture Revisited: Linking Traits and Dimensions of Culture Cross- Cultural Research, February 1, 2004; 38(1): 52 - 88.Mason A. Carpenter 24. National culture Individualistic and non-hierarchical societies are more inventive than other societies (global patent data) (Shane, JBV, 1992). Knowing someone who has started a business recently, across the world, has a significant impact on entrepreneurship participation. This relationship is strongest in low power distance, masculine national cultures (comparing 35 countries, 5 years) (Klyver, Hindle, & Schtt, SSRN, 2007).Mason A. Carpenter 25. Overarching Conclusion Social networks and social capital are key inputs into value creation and entrepreneurship Weak ties most valuable to access and disseminate knowledge (information search) Strong ties most valuable to transfer knowledge and access resources (information/resource transfer) National culture can play a role Mason A. Carpenter 26. Outline Some definitions Context Research Assess Going forwardMason A. Carpenter 27. Data and methods.. Generic Characteristics DENSITY SIZE TOTAL EMBA Spring 08 VariableObs Median Mean Std. Dev. Min Max# of links 3016166724 Very Close % 3030% 34% 15%14%70% Network Density %3045% 45% 16%20%86% Senior % 3046% 46% 21% 4%93% Peer%3024% 28% 14% 7%63% Junior % 3020% 23% 17% 0%60% Different Area%3040% 46% 26% 0%94% Different Unit % 3030% 33% 21% 0%88% Different Firm%3046% 40% 21% 0%76% Same Gender %3069% 63% 22%14% 100% Same Race %3093% 85% 28% 0% 100% Same Nationality % 30 100% 90% 26% 0% 100%Other Characteristics? Weak v.s. Strong_______ ________ ConnectorsCentrality _______ Mason A. Carpenter 28. Outline Some definitions Context Research Assess Going forwardMason A. Carpenter 29. Going Forward Reasonable to seek a balance between working and networking Assess your social network IQ Does the word network make you queasy? Take a 20-item survey (see Appendix) UpMo Job Readyness Evaluator (www.upmo.com) Assess your own network Gladwells list of names (see Appendix) Grid (link to survey in Appendix) Personal, operational, strategic Assess your groups network and networking Requires different skill sets to excel Bridging and brokerage skills Different mindset Different reward structure Give, give, give "Worry not that no one knows you, seek to be worth knowing. Confucius Mason A. Carpenter 30. Further Reading Wayne Baker (2000). Achieving Success Through Social Capital. Jossey-Bass. Ron Burt (1992). Structural Holes. HBS. Ron Burt (2009 in press). Neighbor Networks. Oxford. Mason Carpenter (2009). An Executives Primer on the Strategy of Social Networks. BEP. Daniel Goleman (2006). Social Intelligence. Bantam. Martin Kilduff & Wenpen Tsai (2004). Social Networks and Organizations. Sage. Thank you! Mason A. Carpenter 31. AppendixThe following page has a 20-item survey on your attitude toward networks. Simply score yourself on a scale of 1 (disagree), 3 (ambivalent), or 5 (strongly agree), and sum your scores. A grid-based Ego network survey is available under My Bookshelf heading http://research3.bus.wisc.edu/course/view.php?id=139Mason A. Carpenter 32. AppendixMason A. Carpenter 33. From Malcolm Gladwells Tipping Point (pp. 39-40). Go through this random list of names and give yourself 1 point for everyone you know with a given last name. For instance, if you know three Johnsons, you get three points. What is your total? Out of 400 people, Gladwell found 5% scored below 20, 3% over 90, 1% over 100, and a range of 16-108 (2-95 in a sample of college students).Mason A. Carpenter