Networks

Social network researchers regard relationships, or ties, as the basic unit of analysis.

A network can be defined as the pattern of ties linking a defined set of persons or

social actors (Granovetter, 1973:1361; Bourdieu, 1986:248; Coleman, 1990:241;

Putnam 1993:15; Simpeh, 2011:4) and deals with social relationships that help build trust and cohesion that are essential for running a successful venture (Simpeh, 2011:4). In a social network each person can be described in terms of his or her links with other people in the network. In social network research, organisations are viewed as clusters of people joined by a variety of links.

Zheng (2010:152) argues that though an individual’s network size does not represent any specific type of social network, it has been considered as one of the most common variables having a significant influence on the decision to engage in innovation. The underlying assumption of network size, however, is quite straightforward: increasing direct or indirect relationships means increasing the amount of information and chances to encounter new ideas and resources (Nahapiet & Ghoshal, 1998:241;

McFadyen & Cannella, 2004:738; Simpeh, 2011:4).

This underlying assumption, in ECFs’ context, simply means that in order for ECFs to access better resources, such as skills and knowledge, collaboration with other actors in the industry is important. A useful way to differentiate social networks is the weak- tie-versus-strong-tie typology first advocated by Granovetter (1973:1360). These concepts are briefly discussed in the next section in order to provide more clarity, as they are often used in social network theory debates.

2.3.5.3.1 Strong ties

Strength of ties, according to scholars (Williams, 2005:23; Simpeh, 2011:4), generally refers to the degree of intimacy among people with whom individuals interact.

Granovetter (1973:1361), however, defines the strength of a tie as “a (probably linear) combination of the amount of time, the emotional intensity, the intimacy (mutually confiding), and the reciprocal services which characterize the tie.” Strong ties generally refer to characteristics of kinship, friendship, and traditional community ties, and are seen as valuable because those with whom a person is connected in this way are

reliable providers of a range of resources in times of need (Liff & Steward, 2001:317;

Levin & Cross, 2004:1480; Simpeh, 2011:4).

Strong ties have value in terms of sharing information and gaining help relevant to innovation, as in new developments, ideas, processes and or technologies. Hansen (1999:82) examined the role of weak and strong ties in sharing knowledge across organisation subunits and concluded that “having weak inter-unit ties speeds up projects when knowledge is not complex but slows them down when the knowledge to be transferred is highly complex”. Hansen’s (1999) work can be confirmed by the fact that many ECFs in South Africa often tend to rely on their own capabilities. An example is when ECFs execute simple projects such as water and sewer reticulation and complete them faster but will rather want to collaborate with more experienced and established contractors on complex projects such as a highway bridge construction, high-rise building, etc.

2.3.5.3.2 Weak ties

There are also many other scholars who emphasize the advantages of weak ties on knowledge sharing, particularly on technology adoption. In the information sharing context, significant attention has been given to the importance of the “strength of weak ties” initially proposed by Granovetter (1983:208). Granovetter (1973:1362) asserted that weak ties are more effective than strong ties in the information diffusion process in that whatever is to be diffused can traverse greater social distances and reach a larger number of people. In particular, the importance of weak ties has been shown in the situation of novel information diffusion such as finding jobs (Granovetter, 1973:1363; Lin, 2001:272; Simpeh, 2011:4). In the context of ECFs, weak ties are particularly well-suited for sharing explicit knowledge at the levels of inter-firm organisations (Hansen, 1999:84; Mu et al., 2008:94). The main point is that weak ties usually play a role as bridges that help firms bring new ideas from the external environment.

2.3.5.3.3 Bonding ties

Scholars (Putnam, 2001:18; Bhandari & Yasunobu, 2009:488) contend that ‘bonding ties’ (often expressed as ‘bonding social capital’, internal social networks or informal ties) refer to connections among people with similar personal characteristics (for example, job, class, ethnicity and education). Bonding (or inclusive) ties are good for building trust and solidarity among actors and facilitating the pursuit of collective goals (Putnam, 2001:18; Adler & Kwon, 2002:39; Bhandari & Yasunobu, 2009:488).

Interpersonal channels are more effective in persuading an individual to accept a new idea, especially if the interpersonal channel links two or more individuals who are similar in socio-economic status, education, or other important ways. Also, the high risk and uncertainty contained in newness such as innovation, new ideas, or new technologies were more reduced by pre-existing relationships, leading to higher degrees of trust and subjective norms (Chou, Cheng & Pan, 2006:251). Innovation adoption in ECFs is effectively facilitated by the adoption of peers who share similar interests and have much in common.

2.3.5.3.4 Bridging ties

In contrast to bonding social capital as a resource located in the internal linkages of individuals, ‘bridging ties’ (often expressed as ‘bridging social capital’; external social networks or formal ties) focus on external relationships (Burt, 1992:57; Monge, Hartwich, & Halgin, 2008:43). Bridging (or exclusive) ties refer to more distant or loose ties that bring individuals or groups together who did not previously know each other by establishing new ties or relationships.

Bridging networks with people across diverse groups or institutions helps actors utilize a wide range of resources (for example, new information and ideas) available for reaching either their private or collective goals (Bhandari & Yasunobu, 2009:450). The advantages of bridging ties are also explained by the concept of ‘structural holes’.

Various scholars (Granovetter, 1973:1363; Burt, 1992:57; Monge, Hartwich, & Halgin, 2008:43) have often used the concept of ‘structural holes’ to describe the individual’s ability to access external resources. As a matter of fact, the advantages and benefits of ‘structural holes’ overlap to a considerable extent with those of bridging ties.

The concept of ‘structural holes’ is differentiated from ‘weak ties’ in that it stresses social networks as a function of brokerage opportunities rather than the strength of the tie and views a lack of connections (often called ‘sparseness’) between separate clusters in social networks as a source to create social capital (Granovetter, 1973;

Burt, 1992; Monge et al., 2008). In the context of inter-firm networks, Tsai & Ghoshal (1998:467) found that social interaction in the form of bridging ties of team members with other business units directly contributed to an increase in information exchange, which consequently had a significant effect on product innovation. The potential for ECFs to innovate, therefore, seems likely when more and more of these owner/managers interact (network) with different owner/managers from different groups who exchange new information at all times.