OB382: Managing Organizational Networks
Graduate School of Business, Stanford University
Spring 2004
Professor
Office:
E-mail:
Phone:
Classtimes:
Mikolaj Jan Piskorski
Knight 305
mpiskorski@stanford.edu
724-1875
Tues, Fri, 10am&3.20pm
Assistant:
Office:
E-mail:
Phone:
Coursepage:
Sandra Davis
Littlefield 370
srdavis@stanford.edu
736-0939
http://coursework.stanford.edu
Overview
Since organizational tasks typically require the cooperation of a wide variety of people both
in and outside of its boundaries, few who work in organizations need to be convinced that
relationships are important to what does and does not get done in organizations. Although
it seems clear that possession of an appropriate network is critical, few managers understand
how the structure of such a network should look. This is because the effectiveness of a
network cannot be judged by the number or the type of relationships that a manager has
with others. The real effectiveness of the network depends on how the people who you
know are connected to other people you know as well as to people who you don’t know.
Since few managers tend to look far beyond the immediate relationships they have, networks
often impede, rather than facilitate, the realization of managerial goals. Given the
importance of networks and their propensity to defy intuition, the main objective of this
course is to introduce you to concepts, insights and findings in the area of social network
analysis in order to improve your understanding of how an effective network structure looks.
The course is divided into four sections. In the first section, we examine basic principles of
exchange in organizations to understand how you should go about building networks. This
section also formalizes the concepts of brokerage, power, trust and reputation – the basic
mechanisms through which networks can help or hinder your career in the organization. We
draw on cases describing networks around individual managers seeking to examine how they
built them and how they now facilitate or impede managerial effectiveness. The second
section focuses on executing network strategies in organizations. Of particular importance
are problems that emerge when a manager attempts to use the same network to achieve
multiple goals, e.g. become a broker and acquire power, or develop appropriate perceptions
and develop trust. We will seek to establish execution strategies that minimize these tradeoffs and help you achieve numerous goals simultaneously. To this end, we undertake
analyses of networks within firms to understand the dynamics of conflict and consensus as
well as the distribution of power among individuals within a network. We will examine
interorganizational networks, which involve market transactions and other exchanges that
span organizational boundaries.
In the third section of the course, we shift the focus of analysis from a manager attempting
to get things done in an organization to an organizational architect. Here, we examine the
interplay between organizational design and formation of social networks. Focusing
specifically on businesses that rely on social networks as the critical aspect of their
functioning, we will examine elements of organizational design that are likely to facilitate or
impede proper functioning of such organizations. In the final section, we move beyond
organizational design and focus on strategy. We analyze business models of recent start-ups,
such as Friendster or LinkedIn that seek to utilize network principles to derive new business
models.
Course Requirements
There are three requirements for this class. First, you should come prepared to every session
and effectively participate in the discussion. In preparation for the discussion, you should
read the assigned case ( ). In some instances, the case is accompanied by supporting
materials ( ) or academic papers ( ). Most of the time the supporting materials are
optional, in some cases they are not. Although this is not a formal requirement, you may
also find it useful to meet in a study group prior to the class. Some of the cases take a lot of
preparation and are subject to a number of interpretations – meeting with a study group will
therefore be an integral part of your learning. Second, you will be required to prepare two
out of five possible cross-case analyses during the course. The exact cases to be compared,
questions to be addressed and the deadlines for submitting the analyses are indicated in the
syllabus. These four to five page papers will help you in integrating the material across cases.
A sample of such a cross-case comparison will be posted on the website. Third, as your final
project, you should submit a field study by 10am on Monday, June 7th 2004.
Your final grade will be calculated as follows:
•
•
•
class participation
cross-case analyses
field study
40%
15%
45%
More details on the project
You have the choice of analyzing (i) a network around a manager, (ii) a network within an
organizational unit or team, (iii) an interorganizational network. You choose a case you find
interesting—a former employer, a competitor or customer, or any person, group or
organization you feel would make an interesting study. The projects should be done in
groups of 3 – 4 people. In most respects, the project is yours to define. Past successful
projects included an insightful analysis of a young manager’s struggles managing the informal
structure of his organization; an analysis of the role networks played in a case of
organizational conflict; and a study of how a successful venture capitalist uses networks.
For the project to be successful, you should apply the tools and concepts presented in the
course to come to a deeper understanding of the social forces that both help and hinder
their effectiveness. The basic template consists of the following elements: (a) an
introduction to give appropriate context to the analysis; (b) a sociogram summarizing the
network under study; (c) an analysis of the structural features critical to understanding
relevant social dynamics; and (d) an appendix in which you describe the data on which your
analysis is based. In general, your analysis should use the concepts and tools from the course
in illuminating the manager or group you choose to study. I do not like to give out length
guidelines. The important thing is quality, not length. My guess, however, is that this
project cannot be done well in under 15 pages.
Page 2
To do this right, anticipate spending time with the manager or group as well as relevant
others. If possible, attend staff meetings or other arenas where it is possible to understand
the nature of interaction among relevant parties. It may be very useful to make these
observations in pairs so you can compare notes with one another. Finally, it may be very
useful though it is not required to build the analysis around a particular event or crisis in
which the network becomes mobilized. If so, background to this event will be an important
part of your report. Also, you will want to begin initial legwork on the project very soon.
Please feel free to contact me with any questions you have. If your chosen subjects have
questions about the project, I’ll be glad to explain the purposes of the project if they call or
email me.
Session 18 has been set aside as a time in which we discuss our projects. This is not
designed as a graded endeavor, but as a way to give everyone a chance to hear what others
have been up to and to get help with our own projects in the weeks leading up to the due
date.
Other Administrative Details
1. You are required to attend every class and no unexcused absences are allowed. You are
expected to be present throughout the duration of the class.
2. In the event that you cannot attend a particular class for some unavoidable reason,
please submit written responses to the questions in the syllabus and e-mail them to me
by 8am on the day of the class. Late submissions will not be accepted.
3. The class starts at 10am or 3.20pm sharp. Please do not be late – this is very
inconsiderate of your classmates.
4. You are welcome to bring something to drink at the start of the class. However, there
should be no reason to bring food to the class.
Students with documented disabilities
Students who have a physical, psychological, or mental impairment that may necessitate an
academic accommodation or the use of auxiliary aids and services in class must initiate the
request with the Student Disability Resource Center (SDRC). The SDRC will evaluate the
request along with the required documentation, recommend appropriate accommodations,
and prepare a verification letter dated in the current academic term in which the request is
being made. Please contact the SDRC as soon as possible; timely notice is needed to arrange
for appropriate accommodations. The SDRC is located at 563 Salvatierra Walk and can be
reached by calling 723-1066 or 725-1067 TTY.
Page 3
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
1
Wednesday, March 31, 2004
Principles of exchange in organizations
Building Relations in Organizations
Required readings:
Erik Peterson (A) (9-494-005)
Erik Peterson (B) (9-494-006)
Optional readings:
Cohen, A.R. and D. L. Bradford. 1989. Influence without Authority: The Use of
Alliances, Reciprocity and Exchange to Accomplish Work. Organizational Dynamics.
17:3, pp. 5-17.
Krackhardt, David and Jeffrey R. Hanson 1993 “Informal Networks: The
Company Behind the Chart” Harvard Business Review 93406.
Case description:
Arriving at CelluComm’s fledging Green Mountain site, Erik Peterson, a new MBA, had no
experience in the cellular phone industry, but was a conscientious, hardworking, mature, and
eager to pursue an entrepreneurial opportunity. The highly competitive nature of the
business and the lack of structure, systems and resources made it imperative for Peterson to
speedily demonstrate skill both as a general manager and a leader. Yet, Peterson fails to rise
to the challenge. During the class we will analyze what went wrong and why.
Assignment Questions
1. Draw a map of work dependencies between actors in the case. To what is
this map helpful to understanding problems are facing Erik Peterson?
2. Overlay a map of social relationships between actors involved in the case. To
what extent does this map allow you to understand the underlying causes of
Erik’s problems?
3. What actions, if any, should Peterson take to turn the situation around and
prepare for his meeting with Chip Knight?
Page 4
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
2
Friday, April 2, 2004
Principles of exchange in organizations
Building relations in organizations
Required readings:
These readings are not in the reader. They will be distributed after Session 1:
Erik Peterson (C) (9-494-007)
Erik Peterson (D) (9-494-008)
Erik Peterson (E) (9-494-009)
Richard Jenkins (9-494-113)
Optional readings:
Kollock, Peter. 1994. "The Emergence of Exchange Structures." American
Journal of Sociology 100:313-345.
Molm, Linda D., Noboyuki Takahashi, and Gretchen Peterson. 2000. "Risk
and Trust in Social Exchange: An Experimental Test of a Classical
Proposition." American Journal of Sociology 105:1396-1427.
Case description:
This case illustrates events subsequent to Erik Peterson (A) (B). The discussion in this class
allows us to gain a deeper understanding of the underlying causes of Peterson’s failures.
Assignment Questions
1. What is your assessment of the events described in Erik Peterson (C), (D) and (E)?
2. What, if anything, should Peterson have done differently?
3. Could you have succeeded in Erik Peterson’s situation? Why or why not?
4. What should Peterson do next? Why?
5. What lessons, if any, do you take away from Peterson’s experience?
Please start completing your sociometric questionnaire.
Detailed directions are available on the class website.
Page 5
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
3
Tuesday, April 6, 2004
Principles of exchange in organizations
Building relations in different network contexts
Required readings:
Textile Corporation of America (9-470-044)
Case description:
This is the classic case of a manager who starts his first job with a large corporation in the
1960s, where he is given a great deal of responsibility, but little authority or supervision. In
contrast to the first two sessions, this case illustrates conditions under which establishment
of ties to others may actually impede one’s effectiveness.
Assignment Questions
1. How important is an individual’s network to his or her authority and access to
information at Texcorp?
2. To what degree do personal networks at Texcorp seem to be the product of
conscious design and to what degree do they to emerge passively?
3. How important are social networks to understanding the unofficial reorganization of
Tercorp in 1968 (see Chart 2)?
4. Mitchell is very taken with the ‘lack of objectivity’ at Texcorp? What makes Mitchell
think that he can be so objective?
5. Is Mitchell’s situation beyond his control or do you think that he is capable of
improving his situation? How? Be specific.
Questions for written cross-case comparison #1
(Upload to class website by 10pm on Monday, April 5th)
1. What are the critical differences between Peterson’s and Mitchell’s ability to build
ties?
2. What characteristics of the network structure at TexCorp and Mitchell’s position in it
made him successful? Contrast these characteristics with the network in CelluComm
and Peterson’s position in it.
3. What are the critical differences in the nature of work dependencies facing Peterson
and Mitchell? Do these explain differences in the success between the protagonists?
In other words, would Peterson succeed at Texcorp? Would Mitchell fail in
CelluComm?
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OB 382: Managing Organizational Networks
Session
Date
Module
Topic
4
Friday, April 9th, 2004
Principles of exchange in organizations
Mentors: Building portfolios of supporters
Required readings:
Donna Dubinsky and Apple Computer (A) (9-486-083)
Debi Coleman and Apple Computer (9-488-024)
Distributed in class:
Donna Dubinsky and Apple Computer (B) (9-486-084)
Donna Dubinsky and Apple Computer (C) (9-486-085)
Optional readings:
Beyond the Myth of the Perfect Mentor (9-491-096)
Burt, Ronald S. 1992. Structural holes: the social structure of competition. Cambridge, MA:
Harvard University Press. Chapter 4 only.
Burt, Ronald S. 2001. "Structural Holes versus Network Closure as Social Capital."
Pp. 31-56 in Social Capital: Theory and Research, edited by Nan Lin, Karen S. Cook, and
Ronald S. Burt. Hawthorne:NY: Aldine de Gruyter.
Video
Interview with Donna Dubinsky (9-887-521)
Case description:
The case describes the effects of a proposed major change in Apple’s distribution strategy as
seen through they eyes of the distribution manager, Donna Dubinsky. Seemingly out of the
blue, Steve Jobs, Apple’s co-founder and chairman, takes issue distribution’s methods and
costs, and proposes a strategy which, among other things, would shift that function away
from Dubinsky’s group and integrate it instead into the manufacturing function. The case
traces Dubinsky’s reactions to Jobs’ proposal.
Assignment questions:
1. Using the data from the case sketch Dubinsky’s ego-centric network. To what
extent did Dubinsky’s network allowed here to be initially so successful at Apple?
2. What were the principal causes of Dubinsky’s reaction to the JIT proposal? To what
extent does the ego-centric network of Dubinsky help you understand the sources of
her reactions.
3. What do you think she should have done differently? Be specific.
Page 7
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
5
Tuesday, April 13th, 2004
Principles of exchange in organizations
Mentors: Building portfolios of supporters
Required readings:
Joline Godfrey at the Polaroid Corporation (A) (9-492-037)
Distributed in class:
Joline Godfrey at the Polaroid Corporation (B) (9-492-038)
Video
Interview with Joline Godfrey (9-497-504)
Case description:
While working toward her master’s degree in social work, Joline Godfrey began at Polaroid
in 1975 as an intern in the company’s employee assistance program. Ten years later, she was
about to become entrepreneur. For the previous three years, Polaroid had provided
Godfrey with the resources to nurture her idea of using photography as the basis for creative
corporate training programs. Now, Joline is preparing to spin off the venture and leave
Polaroid. The case describes the evolution of Godfrey’s career and the path at Polaroid that
eventually led her to embark on an entrepreneurial venture.
Assignment questions:
1. Describe the evolution of Godfrey’s relationship with Sudbey. What did each party
gain from the relationship?
2. How did Godfrey go about creating Odysseum? What obstacles did she face? What
sources of power and what influence strategies did she use? What mistakes did she
make?
3. How is her strategy within Polaroid similar to Dubinsky’s strategy with Apple? How
is it different? What are the implications of these similarities and differences?
Questions for written assignment #2
(Upload to class website by 10pm on Monday, April 12th)
1. Mentors often provide the main source of advice, help interpret organizational reality
and provide buy-in in organizations. What does the comparison between the
mentors of Dubinsky’s and Godfrey teach us about the importance of mentors’
network structure? What network structure would you want your mentor to have?
2. What are the costs and benefits of having more than one mentor? If you would like
to choose more than one mentor, what types of relationships should exist between
these mentors? What network structures should each of them have?
Page 8
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
6
Friday, April 16th, 2004
Principles of exchange in organizations
Your Network
Session description:
During this session we will examine the structure of your own network on the basis of the
report you will receive via e-mail. Specifically, we will examine the extent to which you are
able to act as a broker in your network. Furthermore, will analyze the extent of your
dependencies in the network to assess the extent to which other wield power over you and
you are able to wield power over others. We will discuss the implications of your network
structure for your career opportunities and examine strategies for potential changes in the
network.
Page 9
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
7
Tuesday, April 20th, 2004
Executing network strategies
What makes for a broker?
Required readings:
Jerry Sanders (9-498-021)
Case description:
The Jerry Sanders case recounts how an entrepreneur in the medical devices industry rapidly
transformed a technology concept into a virtual company, X-Cardia. The dilemma posed by
the case is whether Sanders’ success with X-Cardia can be replicated with another company
San Francisco Science.
Visitor:
Jerry Sanders
Assignment questions:
1. What was Sanders trying to accomplish?
2. What was his strategy for building a network of relationships? To what extent were
these important to building his business?
3. What were specific strategies that make Jerry Sanders such a great broker? Are there
any aspects of his execution strategy that he should still work on?
Page 10
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
8
Friday, April 23rd, 2004
Executing network strategies
Managing trade-off between brokerage & power across organizations
Required readings:
Basil “Buzz” Hargrove and De Havilland, Inc. (A) (9-899-138)
Gould, Roger V. and Roberto M. Fernandez. 1989. "Structures of Mediation: A
Formal Approach to Brokerage in Transaction Networks." Sociological Methodology pp.
89-126.
Optional readings:
Piskorski, Mikołaj Jan and Tiziana Casciaro. 2003. "When More Power Makes You
Worse Off: Turning a Profit in the American Economy." Working Paper. Graduate
School of Business.
Distributed in class:
Basil “Buzz” Hargrove and De Havilland, Inc. (B) (9-899-176)
Video:
Excerpts from “The Negotiator”
Case description:
This case describes the efforts of Basil “Buzz” Hargrove, president of the Canadian Auto
Workers and veteran negotiator, to avoid a strike with de Havilland, Inc., a manufacturer of
airline parts. During the class we will watch video footage of the entire process to
understand why Hargrove found it difficult to deal with Merv Gray, the head of the union’s
bargaining committee. During the course of the case discussion we will examine what
Hargrove should do next.
Assignment questions:
1. Why was Hargrove unable to convince Gray and the rest of the bargaining
committee to support the agreement?
2. What type of broker is Hargrove in Gould and Fernandez’s classification scheme?
3. Given your answer to question 2, develop an action plan for Hargrove to get the
agreement accepted.
Page 11
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
9
Tuesday, April 27th, 2004
Executing network strategies
Managing trade-off between brokerage & power inside organizations
Please note that this class will meet in
Training Room in the MBA Computer Lab
Required readings:
The Union Vote at Silicon Systems
Data for analysis
Available on the website
Case description:
This case describes unionization drive at a small entrepreneurial Silicon Valley firm, here
called Silicon Systems. The National Labor Relations Board informs the company that it
was granting a petition by a national union to hold a certification election at Silicon Systems.
Despite the support for the unionization drive, in the end, the union was defeated in the
certification election by a vote of 12 to 3. In class, we will seek to understand the how
network structures of perception and reputation led to the defeat.
Assignment questions
1. Why was the union drive popular initially?
2. Explain Chris’ ambivalence. What might have driven him to resign from his job
before the vote? To what extent do the differences between Chris’s perception of the
network in the firm and the actual network explain his resignation?
3. Why did the union drive ultimately fail? To what extent does the structure of
relationships between actors explain this outcome?
Page 12
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
10
Friday, April 30th, 2004
Executing network strategies
Dealing with powerful and prestigious across organizations
Required readings:
Abelli and Sviotti at Banca Commerciale Italiana (A) (9-402-043)
Piskorski, Mikolaj Jan, and Bharat N. Anand. 2003. "Power, Brokerage and Prestige:
Formation of Structural Advantages in Exchange Networks." Working Paper, Graduate
School of Business, Stanford University. Stanford, CA.
Distributed in Class:
Abelli and Sviotti at Banca Commerciale Italiana (B) (9-402-044)
Data for analysis:
Available on the website
Case description:
The case takes place in Italy in 1999 and 2000. The network structure of the Italian banking
industry was in flux, due to changes in the political and economic structure of the country.
In the past, strong personal and familial ties had determined the outcomes of such deals as
described in the case. But now, Alberto Abelli and Pierfrancesco Saviottin, joint-CEOs of
Banca Commerciale Italiana, argue that the new order calls for decisions that maximize
shareholder wealth. They must use their power to counteract the influence of those who
would sacrifice shareholder wealth for relational ties.
Assignment questions for the case:
1. Consider the networks of the overlapping organizational relationships in the Italian
banking industry, presented in the figures at the end of the case. What do these
maps tell you about the situation confronting Abelli and Saviotti?
2. What are Abelli and Saviotti’s main sources of power during the takeover attempts?
How can they use this power to affect the outcome of the struggle?
3. Why do Abelli and Saviotti remain so tightly aligned? Is this stable? Would one (or
both) of them be better off aligning with someone else? Who?
4. Develop an action plan for Abelli and Saviotti to help them maximize shareholder
wealth and keep their jobs at the top of BCI.
Page 13
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
11
Tuesday, May 4th, 2004
Executing network strategies
Dealing with powerful and prestigious inside organizations
Required readings:
Zuckerman, E. and D. Phillips. An incident in the cell room of the XYZ Mining Co.
(available on class website)
Blau, Peter M. 1963. “Consultation Among Colleagues” and “Unofficial Norms”
The Dynamics of Bureaucracy. Chicago, IL, University of Chicago Press
Data for analysis
Available on the website
Case description:
The case focuses on competition between two normative orders in an organization. The
case documents the victory of one norm over another. During the case discussion, we will
examine on network structures that allowed the norm to have won.
Assignment questions:
1. Why was Abraham the accuser and not his work partner, Benson?
2. Why was Donald accused, rather than Donald’s work partner, Abel?
3. Why was Donald deserted by the workers in the Unit?
4. Why did Jackson not offer some support to Donald?
5. Why had Soft acted as he did and why did Abraham recede into the background?
6. Could Smithson do something to gain some control over the Cell Room?
see the following page for written assignment questions
Page 14
OB 382: Managing Organizational Networks
Questions for assignment #3
(Upload to class website by noon on Friday, May 7th)
On 7-10 pages please answer the following questions.
Use network analysis to assess the implications of Donald’s departure from the Cell
Room. To make the analysis as straightforward as possible, assume that Donald’s
replacement is an isolate in the Cell Room (i.e., he has ties to no one in the Cell
Room). In effect, you should remove Donald’s row and column from the matrix
that we analyzed in the class example. Discuss the implications of Donald’s
departure for other workers in the Cell Room. Whose network position improved
by virtue of Donald’s departure; whose network position was hurt by Donald’s
departure? Is it possible to speculate on the implications of his departure for the
norms in the Cell Room? If it is not possible to speculate on the implications of his
departure for the norms in the Cell Room, what additional information would you
need in order to make such speculations?
Using network analysis, consider this hypothetical follow-up to the Cell Room case:
Smithson decides that upon Donald’s departure, he will remove a second Stripper
rather than replace Donald (Remember Strippers work in pairs.). He is concerned
about two issues. First, he wants to remove the worker whose departure will lead to
the greatest enhancement in Jackson’s influence. Second, he wants to avoid
removing a worker who will be receptive to an enhanced emphasis on productivity
within the Cell Room. Whom should he remove?
Page 15
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
12
Friday, May 7th, 2004
Social networks and organizational design
Trust and cohesion to elicit learning and motivation
Required readings:
Business Networks (Stanford GSB: ON-1)
Uehara, Edwina. 1990. "Dual Exchange Theory, Social Networks, and
Informal Social Support." American Journal of Sociology 96:521–557.
Case description:
The case describes the efforts of Les Cunningham, the CEO of Business Networks, to
create business networks in the residential remodeling industry. The case examines his
strategy in building and developing these networks and examines his ability to retain
members involved in these associations. During class we will discuss how network insights
can help Cunningham in his quest.
Visitor:
Les Cunningham
Assignment questions:
1. What are the key principles of operation of Business Networks? What are the
sources of value it provides to its clients?
2. What are the costs of belonging to Business Networks? What strategies can Business
Networks use to reduce these costs? What specific recommendations would you
give to Cunningham?
3. If Cunningham wanted to expand this model to another industries, what industries
should he go into and which should he avoid? Are there other business models that
are derived from the same principles of network analysis that Cunningham could
consider?
Page 16
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
13
Tuesday, May 11th, 2004
Social networks and organizational design
Designing organizations for self-managing professionals
Required readings:
Eccles, R. G. & Crane, D. B. (1988) Systems for Control. Doing Deals: Investment
Bankers at Work. Boston: Harvard Business School Press, 147-161.
Eccles, R. G. & Crane, D. B. (1988) The Bonus Determination Process. Doing
Deals: Investment Bankers at Work. Boston: Harvard Business School Press, 163178.
Chicago Bond Sales Department (9-488-020)
Optional Readings:
Eccles, R. G. & Crane, D. B. (1988) The Self-Designing Organization. Doing Deals:
Investment Bankers at Work. Boston: Harvard Business School Press, 119-46.
Case description:
The Chicago Bond Sales Department was an extremely effective group of 29 people. Its
sales volume had grown rapidly between 1981 and 1987, as had its contribution to the
company’s profitability. Several factors have contributed to the group’s success: market
growth, management systems, leadership, organizational culture and hiring practices.
However, two significant changes were introduced and their impact on the group was under
assessment. One change involved the client-driven shift toward specialization among the
bond sales staff. The other change was a new evaluation system which formalized multipleconstituency inputs and increased the emphasis on subjective measurement criteria. During
the case discussion, we will discuss how these changes affected the networks in the
department and consequently its performance.
Assignment Questions
1. What do investment banks do? What do bond salespeople do?
2. Why has the Chicago Bond Sales Department been so successful?
3. How do the changes affect the operation of the department? Pay specific attention
to the allocation of individuals to specialist and generalist sales positions, to the
compensation scheme which exists for specialists and generalists, and to the link
between spatial location and communication patterns.
4. If you were Ed Powers, would you change any of these features of the sales
department? Which? Why?
Page 17
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
14
Friday, May 14th, 2004
Social networks and organizational design
Designing interorganizational alliances
Required readings:
The HP-Cisco Alliance (A) (9-403-120)
Distributed after class:
The HP-Cisco Alliance (B) (9-404-040)
Case description:
In 2002, Hewlett-Packard and Cisco Systems strive to develop their long-standing
partnership into a more impactful strategic alliance. In spite of the solid strategic rationale
for the partnership, the alliance has stalled for several months. Critical components of
successful alliance implementation emerge from the narration of the events. Specifically, the
case illuminates the link between alliance strategy, formal design of alliance structure and
processes, and informal management of interpersonal dynamics where trust, perceptions and
emotions can both create and overcome formidable obstacles to effective inter-firm
relationships.
Visitor:
TBA
Assignment Questions:
1. What are the challenges facing Jim Heal and Mike Thomas?
2. What are Heal’s and Thomas’s bases of power? What influence tactics are available
to them?
3. If you were appointed to an alliance manager position at HP or Cisco, what would
your action plan be?
4. If you were Steinhibler or Russell, what kinds intervention would you pursue to
enable help the alliance work effectively?
Questions for written cross-case comparison #4 are available on the website
(Upload to class website by 10pm on Monday, May 10th)
Page 18
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
15
Tuesday, May 18th, 2004
Business models based on social network principles
Trust and cohesion to elicit motivation and creativity
Required readings:
The Almodóvar Brothers Firm Factory: Unbinding Art through Tight Relationships
(IESE DG-1331-E)
Rodley, Chris “Lynch on Lynch” Chapters 3, 4 and 5. Faber and Faber, London,
UK.
Video
Excerpts from Almodóvar and Lynch’s movies
Case descriptions:
The first case depicts the journey to personal and professional maturity of Pedro Almodóvar
– self-taught Spanish maverick of the European cinema. The network strategy of
Almodóvar allows him to gain creative freedom and control over his movies. His brother's
dedication to his vision and work together with a very committed production team cushions
him from the industry's volatility and allows him develop a distinctive artistic identity
recognizable by the audience. The excerpt from the book documents the career beginnings
of an American cinema maverick – David Lynch. By comparing the different strategies and
their effectiveness in different contexts, we will seek to provide recommendations to
Almodóvar on how he should go about developing his career in Hollywood.
Assignment questions:
1. What network strategies did Almódovar use to gain his position and identity in the
Spanish film industry? Be specific in outlining the mechanisms at work here.
2. How do these strategies compare to those of Lynch? To what extent is the
competitive context important to understanding the differences between Lynch’s and
Almodóvr’s strategies?
3. Given your answer to Q2, should Almodóvar go to Hollywood? What would you
recommend to Almodóvar in terms of developing his network strategy?
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OB 382: Managing Organizational Networks
Session
Date
Module
Topic
16
Friday, May 21st, 2004
Business models based on social network principles
Formalizing networks to improve information access and search
Required readings:
LinkedIn.Com (available on the class website)
Case description:
LinkedIn.Com is a local start-up company which utilizes web technology to improve social
networking for business people. The company made a couple of strategic choices how their
users can form networks. A particular user's connections are not visible to others by looking
at his or her profile. After users create profiles listing their professional experience and invite
real-world contacts to join their contact list, they can use a search tool to find people within
four degrees of separation to be referred to for employment or business needs. To ask to be
referred to a particular search result, a user writes a note that first must pass through and get
approved (or endorsed) by all mutual contacts before arriving at the intended person. In
November 2003, LinkedIn.com secured $4.7m of first round financing from Sequoia
Capital. During the case discussion, we will examine the business model underlying
LinkedIn.com and discuss the challenges lying ahead.
Visitors:
Konstantin Guericke and Reid Hoffman
Assignment questions:
1. What is LinkedIn’s business model? What are the sources of value added? What is
the firm’s ability to extract that value from customers?
2. Who or what is the biggest competitor of LinkedIn.com? Are there any features of
the company’s business model that deem it incapable of beating the competition?
3. What particular features of LinkedIn.com’s website allow it to deliver value to the
customers? Which ones need further development?
4. Given your analysis in Q1-Q3, what recommendations would you give to Konstantin
in terms of developing his venture.
Page 20
OB 382: Managing Organizational Networks
Session
Date
Module
Topic
17
Tuesday, May 25th, 2004
Business models based on social network principles
Formalizing networks to improve information access and search
Required readings:
Friendster.com (available on the class website)
Case description:
Friendster.Com is a website that allows people to explicitly articulate their social network,
present themselves through a profile including picture, interests and demographics, post
public testimonials about one another, and browse a network of people. Friendster.com is
built on the assumption that friends-of-friends are more likely to refer you to better matches,
terms of potential dating or activity partners. Friendster.com launched its public beta in the
fall of 2002. In late 2003, the company secured $13m from Kleiner Perkins and Benchmark.
As of January 2004, the site is still in beta and has amassed over 5 million registered users.
During the case discussion, we will examine the business model underlying Friendster.com
and discuss the challenges lying ahead.
Visitor:
Visitor from Friendster.Com
Assignment questions:
1. What is Friendster’s business model? What are the sources of value added? What is
the firm’s ability to extract that value from customers?
2. Who or what is the biggest competitor of Friendster.com? Are there any features of
the company’s business model that deem it incapable of beating the competition?
3. What particular features of Friendster.com’s website allow it to deliver value to the
customers? Which ones need further development?
4. Given your analysis in Q1-Q3, what recommendations would you give to Jonathan
in terms of developing his venture.
Questions for written cross-case comparison #5
(Upload to class website by 10pm on Monday, May 25th)
1. Compare and contrast Friendster’s and LinkedIn.com business model. To what
extent are the network principles they use similar and/or different?
2. As you look back over the network principles we have examined in this course, are
there any network principles that they have missed? What are the implications of this
omission?
3. Is there another set of network principles that can be invoked to develop a new
business model?
Page 21
OB 382: Managing Organizational Networks
Session
Date
Topic
18
Friday, May 28th, 2004
Presentations of group projects
Session description:
There are no reading assignments for this session. Instead, we will survey projects you on
which you are working. The main objective of this session is to receive feedback on your
analysis which you will be able to incorporate into the final draft of your project.
Assignments:
1. Prepare a twenty-minute presentation of your project. The presentation should
follow the outline of your project. Therefore, you should give a brief introduction of
the context, a sociogram summarizing the network under study and the analysis of the
structural features critical to understanding relevant social dynamics.
2. In order to benefit from the session fully, you should also include questions with
which you are still wrestling and issues that you think can benefit from critical
analysis of others.
Page 22
OB 382: Managing Organizational Networks
Session
Date
Topic
19
Tuesday, June 1st, 2004
Wrap-up
Session description:
There are no reading assignments for this session. Instead, I will provide an overview of the
most important themes of the course and answer any remaining questions you might have.
Page 23