Network Responsiveness: The Social Structural Microfoundations of Dynamic Capabilities

Abstract

Intraorganizational social networks are known to be important antecedents to individual career attainment, but research examining their influence on firm-level performance has been limited. We argue that the intrafirm network is likely to affect two firm-level outcomes: coordination and adaptability. Prior research has shown formal structure to be a useful tool for reshaping organizational networks, but we argue that firms vary in their rates of network responsiveness. When formal organizational structure is changed, as in a reorganization, or when targeted individuals undertake job changes, some firms will experience a rapid reshaping of their networks; in other firms, the network will respond more slowly to the new formal structure. We posit that slow network responsiveness may provide coordination advantages via compensatory fit, whereas fast network responsiveness may facilitate more rapid adaptability. As such, a firm's rate of network responsiveness is a heretofore unexplored source of dynamic capabilities. We illustrate these ideas using case data and empirical examples. We view network responsiveness as a useful means through which the internal network structure of a firm drives ambidexterity, dynamic capabilities, and firm performance.

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