Information Sharing in Social Networks: PhD Thesis Thomas Langenberg

Information Exchange in User Communities: A Study of Individual Level Determinants and Firm Level Effects in the U.S. Snowsports Industry Private Dissertation Defense by Thomas Langenberg June 14, 2007

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Among scholars, a structural perspective on social networks has become a popular perspective to understand information processing within & outside firms RESEARCH OBJECTIVE & RESEARCH QUESTIONS Information Processing between Firms and Clients ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Information Processing in Intrafirm Social Networks My Research Objective Understand the relationship between a social network’s structural set-up and information exchange that takes place among its members

In my first research paper, I examine the determinants of firm level absorptive capacity and try to understand what social integration mechanisms are RESEARCH OBJECTIVE & RESEARCH QUESTIONS Despite extensive conceptual and empirical work on this construct little is known about the nature of social integration mechanism Research Gap Research Question: What exactly are social integration mechanisms? Absorptive capacity describes a firm’s ability to turn external information into commercially attractive outcomes ,[object Object],[object Object],[object Object],Zahra & George (2002) have introduced the notion of social integration mechanisms to account for a firm’s ability to assimilate and transform novel knowledge source: Zahra, S. A. & George, G. 2002. Absorptive Capacity: A Review, Reconceptualization, and Extension. The Academy of Management Review, 27(2): 185-203

The second research paper takes the notion of social networks on a more applied level and studies information exchange in user communities RESEARCH OBJECTIVE & RESEARCH QUESTIONS Product technology users or creative individuals gather in user communities to share information and create knowledge or novel products ,[object Object],[object Object],[object Object],[object Object],Among other things, scholars found that such communities often dependon the contributions of a few selected individuals Less work has been done to develop characteristics that can be applied to identify the individuals that are indispensable for information exchange in user communities Research Gap Research Question: Why are some individuals indispensable for information exchange while others are not?

The third research paper attempts to understand how information exchange in user communities influences a community member’s perception of firm activities Little work has been done to understand how exposure to different information sources inside and outside such user communities influences a community member’s perception of a firm’s activities Research Gap RESEARCH OBJECTIVE & RESEARCH QUESTIONS Among others, online communities help individuals to find information about products and services which eventually influences personal opinions and purchase decisions ,[object Object],[object Object],[object Object],[object Object],Scholars argue that customers can influence a firm’s ability to access rent generating opportunities (for instance by gathering in communities of product technology or service users can influence a firm’s ability to establish popular products or brands) Research Question: How does exposure to information influence an individual’s perception of a firm’s activities?

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A firm’s ability to build absorptive capacity is - in parts - determined by its social integration mechanisms, but it is not yet known what they are A CONCEPTUAL ANALYSIS OF ABSORPTIVE CAPACITY AND SOCIAL INTEGRATION MECHANISMS: RESEARCH DESIGN source: Zahra, S. A. & George, G. 2002. Absorptive Capacity: A Review, Reconceptualization, and Extension. The Academy of Management Review, 27(2): 185-203 Firms differ in their ability to acquire, assimilate, transform, and exploit novel information because they have different degrees of absorptive capacity (Cohen & Levinthal 1990) Despite extensive conceptual and empirical work on this construct little is known about the nature of social integration mechanism: what are they ? how or by what are they determined ?

I reviewed 23 articles from the past five years that addressed Zahra & George’s (2002) model in their work ISI Web of Knowledge and Google Scholar ,[object Object],[object Object],[object Object],[object Object],[object Object],Results ,[object Object],[object Object],A CONCEPTUAL ANALYSIS OF ABSORPTIVE CAPACITY AND SOCIAL INTEGRATION MECHANISMS: RESEARCH DESIGN

First, from a social network structure point of view, an intrafirm social network’s cohesiveness is an important determinant of a firm’s ability to assimilate information Cohesive social networks foster information diffusion ,[object Object],[object Object],Hence, a firm’s ability to assimilate novel information depends on the intrafirm social network’s degree of cohesiveness firm level knowledge assimilation capability cohesiveness of intrafirm social networks + ,[object Object],[object Object],[object Object],[object Object],A CONCEPTUAL ANALYSIS OF ABSORPTIVE CAPACITY AND SOCIAL INTEGRATION MECHANISMS: FINDINGS

Second, again from a social network structure point of view, central positions within intrafirm social networks provide individuals with control over information flows Central positions within social networks foster information brokering ,[object Object],[object Object],Hence, a firm’s ability to transform existing information into novel knowledge can also be determined by organizational decisions makers’ control over information flows firm level knowledge transformation capability Centrality of Management (  intraorganizational decision makers ) + ,[object Object],[object Object],[object Object],[object Object],A CONCEPTUAL ANALYSIS OF ABSORPTIVE CAPACITY AND SOCIAL INTEGRATION MECHANISMS: FINDINGS

Hence, different configurations of intrafirm social networks support different types of knowledge integration Firm Knowledge Assimilation Capabilities Firm Knowledge Transformation Capabilities A CONCEPTUAL ANALYSIS OF ABSORPTIVE CAPACITY AND SOCIAL INTEGRATION MECHANISMS: FINDINGS ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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Alpine skiing is a particularly interesting subfield of U.S. Snowsports because of decreasing sales & participation but increasing firm creation activities Participation & Equipment Sales are Decreasing source: leisuretrends.com source: SIA Report 2005 Entrepreneurial wave in U.S. alpine skiing 30% of the currently competing ski firms in U.S. alpine skiing have been founded during the last 6 years. THE INDUSTRY CONTEXT: U.S. ALPINE SKIING

Skiing technology is relatively low-tech and thus makes it difficult for firms to differentiate themselves from competitors Differentiation along core design & construction principles source: www.skibuilders.com Differentiation along ski geometry/design parameters source: www.fischer-ski.com THE INDUSTRY CONTEXT: U.S. ALPINE SKIING Ski length Running length Camber Tip and tail width Waist width

I collected data through qualitative and semi-structured interviews to arrive at a better (exploratory) understanding of how the industry works ,[object Object],THE RESEARCH METHODOLOGY ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Results from Interviewing: New start-up firms are gaining ground “ These up-start companies are sick. They support the skiing sports and push the industry forward. ” Newschoolers.com community member about the freestyle skiing movement “ Our products are going back to the roots of skiing. We want to change the industry from the inside. We are not big and corporate, but our company is rider owned and rider operated. ” CEO of a freestyle ski start-up company “ These small start-up firms that are popping up all over Colorado, California, and the East Coast now are exactly what we need. They attract a new generation of skiers that might support the sport for a long period of time .” Product Manager Incumbent Ski Firm

During my interviews, I learned that newschoolers.com is a highly referred to and influential online community of freestyle ski enthusiasts in U.S. alpine skiing Demographics of the User Community Information Processing in Social Networks: the Newschoolers.com Case ,[object Object],[object Object],THE RESEARCH METHODOLOGY

For hypothesis testing, I administered an online survey instrument in the newschoolers.com community Quantitative Data: Results** ,[object Object],[object Object],[object Object],Quantitative Data: Sampling Rules ,[object Object],[object Object],[object Object],*** I tested for survey non-response, item non-response and common method bias, but did not find any evidence for bias THE RESEARCH METHODOLOGY

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Being more active in a user community makes individuals more indispensable for information exchange in the user community EMPIRICAL FINDINGS: INDIVIDUAL LEVEL DETERMINANTS OF USER COMMUNITY INFORMATION EXCHANGE Hypothesis 1: Participation in information exchange has a positive effect on the extent to which an individual is perceived as relevant to the user community by other community members It is the “vibrant” information exchange which makes user communities an interesting place for both members and non-members ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Supporting Literature ** adopted from Lakhani, K. R. & von Hippel, E. 2002. How open source software works: “free” user-to-user assistance . Research Policy, 1451: 1–21, p.9 The nature of information exchange in user communities

Typically, voluntary communities of interest are promoted and developed by a few individuals that are actively interested in shaping the community’s collective norms and shared beliefs EMPIRICAL FINDINGS: INDIVIDUAL LEVEL DETERMINANTS OF USER COMMUNITY INFORMATION EXCHANGE Hypothesis 2: Emotional commitment has a positive effect on the extent to which an individual is perceived as relevant to a user community by other community members In each user community, there are individuals that are actively shaping the norms and beliefs inside the community and without such individuals communities would loose some of their characteristics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Finding: Emotional Commitment and Participation have a Positive Effect on an Individual’s Perceived Relevance to Information Exchange Descriptive Statistics & Pairwise Correlation Regression Results EMPIRICAL FINDINGS: INDIVIDUAL LEVEL DETERMINANTS OF USER COMMUNITY INFORMATION EXCHANGE

Implications: the attractiveness of a user community depends on the participation and emotional commitment of a few selected individuals that are “most central” to the user community’s information exchange The conceptual model is supported by my empirical results Emotional Commitment Perceived Relevance to User Community Information Exchange + Participation in Information Exchange ,[object Object],[object Object],[object Object],+ EMPIRICAL FINDINGS: INDIVIDUAL LEVEL DETERMINANTS OF USER COMMUNITY INFORMATION EXCHANGE

Firms that receive more large scale public attention and more positive emotional responses have a higher celebrity status than other firms (Rindova, Pollock & Hayward 2006) EMPIRICAL FINDINGS: USER COMMUNITY INFORMATION EXCHANGE & FIRM LEVEL EFFECTS ,[object Object],[object Object],[object Object],My Hypothesis: Besides the media, exposure to information exchange in user communities can also alter an individual’s emotional response toward a selected firm Literature: exposure to information can influence an individual’s opinions about firms ** adopted from Rindova, V. P., Pollock, T. G., & Hayward, M. L. A. 2006. Celebrity firms: The social construction of market popularity. Academy of Management Review, 31(1): 50-71, p65 ,[object Object],[object Object],[object Object]

Results: There is a statistically significant interaction effect between exposure to industry information and exposure to user community information exchange EMPIRICAL FINDINGS: USER COMMUNITY INFORMATION EXCHANGE & FIRM LEVEL EFFECTS

Increasing exposure to information exchange in a user community significantly alters an individual’s perception of a firm’s credibility in freestyle skiing ,[object Object],[object Object],[object Object],Interpretation of findings (for incumbent ski firm product users) EMPIRICAL FINDINGS: USER COMMUNITY INFORMATION EXCHANGE & FIRM LEVEL EFFECTS Exposure to Industry Information Perceived Credibility Low Exposure to User Community High Exposure to User Community ,[object Object],[object Object]

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In summary, my dissertation addresses my research objective with three findings about the relationship between a social network’s structural set-up and the information exchange that takes place among its members SUMMARY & CONCLUSIONS ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Understanding Information Exchange in User Communities ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Firm Level Absorptive Capacity ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Understanding the Sources of Firm Celebrity Status

My results have important implications for managerial practice and further research. The following table outlines a few avenues. Information Exchange in User Communities Social Integration Mechanisms Firm Celebrity Status SUMMARY & CONCLUSIONS Managerial Practice Further Research ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Operationalization of Variables: Emotional Commitment (p.82)

Operationalization of Variables: Perceived Credibility (p.104)

Operationalization of Variables: Exposure to Information (p. 105)

Descriptive Statistics and Regression Results Firm Celebrity Status (p.110/111) Descriptive Statistics & Pairwise Correlation Regression Results

Information Sharing in Social Networks: PhD Thesis Thomas Langenberg

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