Although any manager would recognize the importance of “networking” in finding, developing, and retaining employees, human resource management traditionally has focused on individuals. In this chapter, the authors point out that core HR processes such as recruitment and hiring, training and development, performance management, and retention all depend on networks. They consider the importance of weak ties in matching employees with jobs and “structural holes” in promoting creativity. They urge managers to make the shift from an atomized view to a network view of human resources--from focusing on the “trees” to understanding the “forest.” They show that networks can boost efficiency and productivity by facilitating information sharing, attracting talent, and strengthening employees’ commitment to the firm. But networks may also pose risks such as “lift-outs,” in which a departing employee takes other workers in his or her network. The authors explore how managers need to understand the impact of networks and how to “manage” them.

Zott and Amit explore the role of business models in creating value through networks. They review earlier, firm-centric views of value creation, including Porter’s value chain, the resource-based view, and the transaction costs approach. They point out that business models go well beyond classic views of network theory (e.g., topography and structure) and include notions of purpose, acceptance, fairness, coherence, and viability. Based on their earlier framework for e-business models, they explore the role of four major interlinked value drivers: efficiency, complementarities, lock-in, and novelty. They argue that the focal firm’s business model acts as both an engine for value-creation and an invaluable construct for understanding the firm’s role in relation to other business model participants in the networks in which it is embedded.

Information about life-and-death matters such as ways to attain good health or prevent disease is often diffused through informal social networks. Network-based strategies and competencies are probably even more important in poor societies with limited means of communication and less effective formal structures than in developed economies. In this chapter, the authors explore the nature of and impacts of informal social networks in reducing fertility and HIV infection in Kenya and Malawi, using longitudinal quantitative and qualitative data that they and their collaborators have been collecting and analyzing for more than a decade. They find that social networks and informal interactions are relevant for many different health domains in developing countries. Their research shows that network effects may be nonlinear, that there may be multiple equilibria, and that networks may either reinforce the status quo or help diffuse new options and behaviors. They show that both the context (e.g., the degree of market development) and the density of networks matter (possibly interactively), as well as the endogeneity of network partners. Their work demonstrates that multiple approaches, including both qualitative and quantitative analyses, can be informative in providing greater understanding of what networks do and how they function.

As manufacturing supply chains have moved from vertically integrated factories to diffused networks, manufacturers need to manage complex, global webs of suppliers. In this chapter, Netessine examines supply networks in two industries in particular: automobiles, and aerospace and defense. He explores how different strategies and technologies have helped companies manage, organize, and capitalize on their networks of suppliers. He discusses how Japanese automakers have used partnerships to outperform their U.S. rivals, who have taken a more adversarial approach to their suppliers. He also considers how companies such as Airbus and Boeing have used technology to coordinate and integrate far-flung networks. While Netessine notes that the formal study of network-based supply chains is just emerging, he offers insights from research and practice on the growing importance of supply networks and strategies for managing them successfully.

Social networks and word-of-mouth marketing are increasingly important, yet few current practices are based on a deep understanding of how the structure of networks can affect customer behavior and marketing outcomes. This chapter offers some critical observations on current word-of-mouth marketing practices and identifies four key questions that managers need to ask themselves before engaging in campaigns designed to leverage customer networks: Can we be confident that interpersonal influence or social contagion is really important? Why exactly would social contagion occur? Should we target key influentials? Can we identify and target those influentials? The answers to these questions cannot be taken for granted.

Biology remains the most extensive and complex information network on the planet. This chapter examines the nature of biological networks, including their inherent stability and risks to their resilience. After a general introduction exploring networks and biological systems, this chapter reviews (1) the evolution of biological networks; (2) principles that govern biological networks; and (3) measures of stability, productivity, and efficiency in biological networks. The authors use examples from food (energy) transfer in rainforests and coral reefs, as well as the creation of a biological network through colonization in Darwin’s Finches of the Galapagos Islands. Research shows that while large biological networks are inherently unstable, some are more stable than others.

What can we learn about networks from ants, honeybees, and other animals with evolved social structures? The impact of information and communications strategies on network dynamics did not arrive with the emergence of computers, cell phones, and the Internet. This chapter describes communication networks selected from among many that have been studied in communities of nonhuman organisms. It explores the extent to which communication linkages have controlled the development of those networks. In some of those networks, developmental histories are manifest as evolved body plans and gender roles not represented in human communities. Many of those networks are founded on efficient exchange of information via pathways of which humans are almost fully oblivious.

This chapter provides an overview of social networks, the basic discipline from which ideas and terminology are drawn when characterizing popular phenomena such as “social networking” Internet sites like Facebook. The authors offer the reader a flavor of the theoretical and empirical research conducted by social network scholars since the 1930s. They explore how researchers have used social networks to generate and test economic, sociological, and organizational theories. They also examine broad insights from this research, as well as management implications in areas such as advertising, brands, loyalty, authenticity, and segmentation. The overriding message is that as power shifts from firms to social networks, companies have less control over their own destinies and need to pay more attention to networks.

In an environment of rapid and discontinuous change, managers have turned to alliances to access the resources they need. But research on alliances shows that more than half fail, demonstrating the difficulty of managing these relationships. Based on their extensive research on alliances, the authors explore the relational capabilities needed for building and managing successful alliances. Using the case of Royal Philips, they explore the role of strategy, structure, systems, people, and culture in alliance success. They also discuss the need for ongoing adaptation and renewal of relational capabilities as the business and its environment change.

Human knowledge and traditions can persist long after their relevance disappears, particularly in an environment of rapid change. Organizational routines often continue in force long after memory of their purpose has been lost. But memory is rarely lost entirely. It usually lingers, in distributed fragments, in an organization’s social networks and can, when needed, be reassembled. This chapter examines the role of such networks in the process of memory loss and recovery.