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This study deals with individual managerial performance, both overall and in generating innovation. While prior work has demonstrated a relationship between network structure and managerial performance, inadequate attention has been paid to network content. We consider several micro-social processes that might account for differences in managerial performance, taken from economic sociology and studies of managers' exploitation of their social networks and derived from work in psychology on the genesis of ideas. We compare the influence of these mechanisms on managerial performance using a sample of 106 middle managers in a European telecommunications company. Our findings suggest that, while network structure matters, access to heterogeneous knowledge is of equal importance for overall managerial performance and of greater importance for innovation performance. Copyright © 2004 John Wiley & Sons, Ltd.
Key words: innovation; knowledge; social network; knowledge heterogeneity; managerial performance
(ProQuest Information and Learning: ... denotes formulae omitted.)
INTRODUCTION
This paper looks at the relationship between knowledge heterogeneity in social networks and its effect on managers' overall performance and innovativeness. In measuring the relative contribution of knowledge heterogeneity and network structure, independently and jointly, on both overall managerial and innovation performance, we present evidence suggestive of two distinct micro-social processes: one arising from the exploitation of network structure, the other based on exposure to diverse knowledge and its recombination as a wellspring of innovation. In doing so, we provide a more detailed understanding of the mechanisms that underlie earlier results showing a relationship between network structure and managerial performance in general.
Considerable attention has been directed at understanding the influence of social network structure on various individual-level outcomes for employees in the firm. Prior work has dealt with the speed of career advancement (Burt, 1992; Ibarra, 1995; Podolny and Baron, 1997), power and influence in the workplace (Brass and Burkhardt, 1993; Krackhardt, 1990), the instrumental use of network ties in organizations (Lin, Ensel, and Vaugh 1981), and compensation levels (Belliveau, O'Reilly, and Wade, 1996; Burt, 1992). Notwithstanding the significant contribution these studies have made to our understanding of individual-level outcomes, the existing literature is lacking in two important respects.
First, as Ibarra (1993) noted a decade ago, there are remarkably few applications of the social capital perspective to managerial innovation and little has changed since...