Lecture 5 Flashcards
(22 cards)
competitive advantage can be achieved via…
- overall cost leadership: low-cost position relative to firms’ peers
- differentiation: create products/services that are unique and for which customer will pay a premium
competitiveness of locations
determined by mutually reinforcing factors: input conditions context for firm strategy and rivalry demand conditions related and supporting industries
ordered thinking
bounded information processing in rivalry
you think about what the other person is thinking
irrationality in rivalry
so focused on what the other person’s doing and rivalry, that you lose sight of what you’re actually doing
puts you at a disadvantage since you’re focusing too much on rivals and not enough on absolute value of thriving
not all business units are created equal
people promoted faster in more powerful depts (Pfeffer and Moore)
rate of salary growth and length of time in each job depend on unit in which a manager started his career
admin positions better compensated if housed in more important functional unit (Pfeffer)
network density
improves unit performance
improves small networks that reside w/in units
positive relationship b/w density of work ties & perf (p=.15)
positive relationship b/w density of social ties & perf (p=.22)
denser networks are more viable
centrality
extent to which ties funnel thru one member
network centrality
organizational units more central in a network of business units are more innovative
teams that are more central in team networks perform better
positive relationship b/w network centrality of leader and performance (p = .29)
brokers
link diverse groups in a network
advantage of being a broker
better compensated, evaluated better, and receive more promotions
less likely to have ideas dismissed, more likely to have ideas evaluated as valuable
Burt, 2002
network density and brokerage
unit networks = denser when unit leaders minimize existence of structural holes (Cross & Parker)
problems with brokers (esp when many structural holes but just a few brokers spanning them)
can easily morph into bottlenecking (leading to inefficiency and harms unit performance)
unit communication risks collapse if brokers leave
brokers don’t have incentive to share responsibilities
misfit: brokers
brokers don’t have clear incentive to share brokerage responsibilities; a misfit b/w unit and individual levels
unit leaders must create conditions for structural holes to be spanned by multiple brokers
business activities should be aligned according to:
same basic competitive orientation - either overall cost leadership or differentiation
units accrue power when…
they act with unity, solve critical problems, and are irreplaceable
in units, pattern of ___ equates to shape of social network
info sharing
remember:
core properties of networks = density & centrality
density is overall beneficial for network performance and viability
brokers benefit disproportionally in networks
porter value chain
each unit should be united by common orientation
its not the general strategy, but all the business activities are united by common competitive orientation
brokers and creativity
gives access to discreet information; allows you to be potentially more creative
participants and correctly using second-order reasoning
Hedden and Zhang:
25% of time at first
65% of time with training
density improves network performance
Regans
organizational units more central in a network of business units are more innovative
Tsai and Ghoshal
teams that are more central in team networks perform better
Balkundi & Harrison
positive correlation b/w network centrality of leader and performance (r = .29)
