South Asian Journal of Business and Management Cases

http://bmc.sagepub.com/ Social Capital for Strategic Sensitivity in Global Business

Hanna Lehtimki and Katja Karintaus South Asian Journal of Business and Management Cases 2012 1: 91 DOI: 10.1177/2277977912459443 The online version of this article can be found at: http://bmc.sagepub.com/content/1/2/91

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Case

Social Capital for Strategic Sensitivity in Global Business

Hanna Lehtimki Katja Karintaus

South Asian Journal of Business and Management Cases 1(2) 91104 2012 Birla Institute of Management Technology SAGE Publications Los Angeles, London, New Delhi, Singapore, Washington DC DOI: 10.1177/2277977912459443 http://bmc.sagepub.com

Abstract The purpose of this case study is to increase our understanding of building strategic sensitivity and the ways by which internal social relationships contribute to it. Applying insights from social capital and social networks theories, the case explores the role of social relations in implementing a strategic initiative. The case study was conducted in close collaboration with the case firm to ensure the applicability of the research findings in an empirical setting. Strategic sensitivity is embedded in social interaction. Exploring both the structural and relational dimensions of social capital allows for understanding the role of social relationships in constraining and enhancing strategic sensitivity. The structural dimension gives information on the efficiency and vulnerability of the social relations, while, the relational dimension shows the motivation for interacting and sharing information and knowledge. Identification of the company as a social entity with humane values manifested in communication is important to the members of the globally operating organization. The case provides empirical evidence on the functioning of social capital and gives an insight to the importance of understanding social connections between the members of the organization. Keywords Social capital, social networks, engaged scholarship

Introduction
This study examines social connections within a globally operating manufacturing company. The purpose is to increase our understanding about the ways by which internal social relationships contribute to building strategic sensitivity. Doz and Kosonen (2008) studied large multinational companies and showed how companies operating globally face the need to build and maintain strategic sensitivity. It means, on the one hand, that a company has to be adaptable to changes in the local market needs, and on the other hand, that a company has to be capable of acting upon the changes. It also means that more emphasis is put on making sense of current situations as they develop than creating foresight and
This case has been developed solely as a basis for class discussion and for education purposes. It is not intended to illustrate either effective or ineffective handling of an administrative situation or decision-making, or represent or endorse the views of management about the topic of the case.

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strategic plans (Doz & Kosonen, 2008, p. 35). This requires connections and rich networks both to the outside world and internally within the company. Such connectivity is not, however, easy to build as the flow of knowledge and information depends on the willingness and capability of each individual to communicate and to share knowledge and communication. In this study, we examine how social networks of knowledge sharing contribute to building strategic sensitivity. We examine social networks of a Services segment in a globally operating manufacturer of glass-processing equipment, Glaston Corporation. The top management of the Services segment of the company had made a strategic decision to put emphasis on customer interaction and the customer information flow to increase sales. In order to accomplish this, a strategic initiative was set to increase the efficiency of customer knowledge transfer within the firm. This included a call for service and maintenance personnel in all countries to proactively recommend spare parts and pick up leads for upgrade and new machinery sales when visiting customers. Also, a requirement to have everyone in the organization to share customer and market information more efficiently across the different functions of the organization was set in place. The enhancement in the efficiency of customer knowledge transfer was expected to help the company to focus on sales efforts in different global regions and steer its R&D to correspond with the market needs. In spite of the strategic initiative in place, the top management in the Services segment was concerned that there was substantial lack of sharing of customer information between the different parts of the organization. In the interviews, the managers expressed their concern over losing significant sales potential due to the fact that local information about customer needs and sales prospects obtained by the maintenance personnel visiting customers sites did not reach the top management who makes globally effective decisions. Also, the concern was that strategic initiatives set at the headquarters were not effectively implemented in the regional offices. Drawing on social capital theory (Burt, 1992, 2009; Nahapiet, 2009; Nahapiet & Ghoshal, 1998), we set out to study the coordinated activities and social relationships between individuals and the customer knowledge and knowing that emerges from the interaction. In our study, attention is paid to information exchange that occurs in such connections between the members of an organization that are not visible in the organizational charts and prescribed processes. Examining social networks between individuals is expected to allow for understanding the social constraints and opportunities for individual behaviour in relation to implementing the strategic initiative (Borgatti & Foster, 2003, p. 1000). The social network structure is expected to account for differences in attitudes towards change and conceptions on what is considered as desirable activity in the future (Brass, Galaskiewicz, Greve & Tsai, 2004; Ibarra, 1993; Ibarra, Kilduff & Tsai, 2005; Tsai & Ghoshal, 1998). Social capital research addresses the growing importance of cooperation between the members of an organization in accomplishing strategy initiatives and in creating strategic sensitivity (Nahapiet, 2009). In addition to mapping the contacts between people, social capital research calls for a deeper understanding of the interactions that constitute the structure of social networks. Attention to the context of the relationships (Uhl-Bien, 2006) and interaction (Nahapiet, 2009) is expected to provide a deeper understanding about the everyday social dynamics, the informal organization, that constitute strategically important outcomes. We, thus, study not only the social structure but also the values and norms inherent in knowledge sharing and seek to understand how they play into the dynamics of exchange of information and knowledge creation (Dachler & Hosking, 1995; Nahapiet, Gratton & Rocha, 2005).

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In the following sections, we will, first, introduce the strategically important challenge faced by the top management of the Services segment of Glaston Ltd. Second, we will introduce the methodological background of the study, and third, present and discuss the findings of the study. Finally, in the discussion section, we will argue that strategic sensitivity is embedded in social relations at all levels of the organization. Building and maintaining strategic sensitivity calls for attention to both the structure of relationships and the values that construct the relationship.

Services Segment in Glaston Ltd: Strategic Initiative for Proactive Sales

Glaston Ltd is an internationally operating corporation with headquarters in Finland. The company has operations in Europe, Asia, North America, South America, Australia and South Asia. In 2009, due to the global economic crisis, there was a dramatic decline in sales and operating result which led to adjusting the production capacity, optimizing the product range and streamlining the structure of sales organization. The number of employees was reduced by 20 per cent between 2008 and 2009. The top management of the corporation had a pressing need to reinforce strategic sensitivity of the firm in all global markets. The challenge was taken up by the top management of the Services segment, one of the three segments of the corporation. The other two segments are Machines and Software Solutions. The Services segment is the second largest with net sales of 48.1 M (2009). The largest is the Machines segment with net sales of 82.2 M, while the Software Solutions is the smallest with net sales of 23.9 M in 2009. The corporate level demand for increasing strategic sensitivity touched upon the Services segment in particular, because the maintenance personnel visit customers sites regularly. The Services segment provides customers with preventative maintenance and servicing of the customers machines, and also, it sells machine spare parts, machine modernization and accessories, tools, remote monitoring and diagnostics, consulting and training. The Services segments strategic goal for 2010 was to recover from the severe effects of cost cutting by increasing sales through maintenance. The main emphasis was put on what was called proactive sales. With this, the goal was to have the maintenance personnel, who were working in the customer interface, recognize sales opportunities more efficiently, actively inform the customer about the forthcoming improvement needs, and forcefully bring back and spread the market information across different functions within the Services segment. The service and maintenance personnel were considered as a valuable and yet, an under-utilized sales channel. The service personnel were the ones to visit the customers premises regularly, and thus, capable of building a trustful relationship with the customer. Now, they were asked to carry the sales information from the company to customers, and also, to inform colleagues within the company about the emerging sales opportunities and new signals from the market. The strategic initiative of proactive sales by the service and maintenance personnel was expected to result in the maintenance personnels increased capability and willingness to discuss sales matters with customers while solving technical problems for the customer. The strategic initiative set by the top management was not, however, easily adapted among the maintenance personnel. The change entailed a requirement for new skills and novel mental frames towards what is expected of oneself as a service and maintenance professional. Furthermore, the strategic initiative of proactive sales did not only touch upon

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the service and maintenance personnel but also called for a change in the collaboration and communication practices among the managers of the global organization. In support of the initiative, the top management had already changed the organizational structure by appointing specialists whose duties included collecting customer information from a broad geographical area and providing sales support to maintenance personnel visiting customer locations. In addition, an e-tool had been launched from the headquarters in Finland to support collecting and sharing information on customers machines and other customer information. In spite of these actions, the top management was disappointed with the results. They felt they needed a deeper understanding of the individual level communication patterns within the firm to better understand what supports and what prevents the flow of customer information. Thus, analyses on the social network structure and knowledge-sharing relationships were conducted. The key focus is on seeking to better understand how does the pattern of social connections either contribute or restrict strategic sensitivity. Attention was directed to the following questions: 1. How does the social structure of knowledge-sharing relationships within the globally operating company look like? 2. How do interests and values constitute knowledge-sharing relationships with the company?

Methodology
Building on the tradition of intrinsic cases studies (Eriksson & Kovalainen, 2008; Stake, 2000; Yin, 2003), the aim of this study is to create an empirically grounded description of the phenomenon under the study and thereby generate contextually informed insight into the relationship between social networks and implementation of strategic initiative. Following Van de Ven (2007), the planning, execution and utilization of the results of the study were carried out in close collaboration with the participating companies. The data comprise focus group discussions, interview data, social networks questionnaire data and answers to open-ended questions. Meetings with two focus groups of the top management team and five interviews of the directors were conducted as part of the data collection. Both focus group meetings and interviews were recorded and transcribed. The focus group meetings lasted two to three hours and each interview lasted about one hour. Together they resulted in 67 pages of transcribed material. The data collection was conducted in the spring of 2010 and in the fall of 2011. The preliminary discussions with the company were held in 2009 and the actual data collection was started in March 2010. First, a workshop with top management team of the Services segment was organized to discuss the past and current business situation and the future strategic initiatives and goals of the company, and the Services segment, in particular. The workshop lasted for two hours, and the issues covered were corporate structure, sales and marketing, communication and cooperation culture and business strategy issues and initiatives. Second, five directors in different locations were individually interviewed to deepen the understanding on key issues in strategic relationship management. The main interest was to discuss collaboration practices between the distant sales companies and the headquarters. The interviews were conducted either face-to-face or over a videoconference depending on the location of the director. South Asian Journal of Business and Management Cases, 1, 2 (2012): 91104
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Third, the target groups for the social network analysis were selected. The aim was to find the connections in technical and sales information communication. The social network surveys were directed to regions that were expected to have connections between each other. However, the regions participating in the surveys were different. In the first social network survey, a total of 83 people were chosen to participate in an Internet-based survey. Half of them were working in regional offices in four different countries in Europe, North America and South America, and the other half was working at the headquarters in Finland. In the second survey, the target group consisted of 68 individuals, who were located in Finland, Southern Europe, China and South-east Asia. The target group was asked to fill in a questionnaire, where each respondent was asked to choose from a list of colleagues: With whom do you communicate in your work? With whom do you talk about sales opportunities or leads? With whom do you talk about technical problems, features or details? In addition to the social network questions, the respondents were asked to answer open-ended questions, which were related to their cooperation preferences, customer and sales information, and company-wide collaboration and guidance, and proactivity in sales. In both the surveys, the respondents had one week to answer the questions. Two reminder e-mails were sent after the initial request to fill the questionnaire. The answers were treated confidentially. For the first questionnaire, the response rate was 76 per cent, from altogether 63 respondents. For the second questionnaire, the response rate was 79 per cent, from altogether 54 respondents. Based on the surveys, visual models of the network structure were calculated. The network modelling was conducted with multidimensional scaling (MDS) non-metric algorithm in UCINET software. Social Network Analysis Tool Spindel (www.spindel.fi) was used in visualization (Palonen, 2006). The visualization shows the structure and intensity of communication in the network. In addition to the modelling of the network, the density and centralization parameters were calculated. The focus was on intra- and inter-departmental connections. The functional, hierarchical and geographical locations were depicted as independent variables. The analysis was focused on examining the patterns of connections, identifying the central actors, and studying the positional structures of the networks (cf. Marin & Wellman, 2010). Power of individual actors in the network was measured with degree centrality. A thematic content analysis of answers to open-ended questions was performed to get a deeper understanding of the content and quality of network relationships. Fourth, the network visualizations and the results of the open-ended questions were discussed with HR manager, who was the primary contact person in organizing the study in the case company. Also, the results of both studies were discussed in focus groups of top management team of the Services segment. The discussions lasted for three hours. The managers learned about the social networks method and reflected their own thoughts and experiences on communication and relationships within the company. All these discussions deepened the analysis and provided the managers of the company with ideas on how to utilize the results. Two researchers have been involved in designing the study, collecting the data and analyzing the data. In addition, a network analysis specialist has provided her interpretation of the network data without having access to the interview data or the company data in general. South Asian Journal of Business and Management Cases, 1, 2 (2012): 91104
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Results of the Network Analysis

Two network figures were drawn on the company. The first network figure (Figure 1) depicts the social networks between people working in Finland, USA, Italy, Brazil and Mexico. This network is called Network A. The second network depicts the social networks between people working in Finland, Australia, China, India, Korea and Singapore (Figure 2). This network is called Network B. In the network figures, the spheres are individuals and the connecting lines between spheres indicate relationships the informants have defined in the questionnaire as persons with whom they communicate. The size of the sphere in the network figure indicates the centrality of the person; the larger the sphere, the more central the person. The figures show that the connections are patterned in accordance with the regional boundaries. In Figure 1, the lower right corner represents headquarters, the lower left corner represents Italian office, and two clusters in upper right corner and up in the middle represent two product lines in North America. Upper left corner represents South American office. The figure shows a vertical gap between the left part

Figure 1. Network of Communication inside and between Countries, Network A

Source: Research conducted by the authors.

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Figure 2. Network of Communication inside and between Countries, Network B

Source: Research conducted by the authors.

and right part of the network, indicating two lines of machinery that are still serviced and maintained by different groups of people. The lack of communication between the offices cannot be explained only as a matter of spatial distance but also as a result of separate histories. Before a company merger nine (2003) years ago, the offices belonged to two different competing companies which had different products. The division visible in the communication connections follows the old company structure before the merger. The network in the Italian office is very dense. However, this regional office is quite distant from the headquarters. The network of the Brazilian office, in turn, is very sparse and also the connections between the headquarters and the South American operations are loose. Managers feel that both the time difference and the lack of common language are experienced as barriers to communication. Seven out of nine most central people work at the headquarters (large spheres). They are either senior managers or senior specialists in technical matters. The two other most central persons are located in a North American office. Network B, as illustrated in Figure 2, covers offices in Finland, Italy, China, India, Korea and Australia. Gray spheres in the right part of the model represent the Finnish office. Black spheres in the middle represent a delivery centre in China. Gray spheres in upper left corner represent a delivery centre in Italy. Light gray spheres in lower left corner and black spheres in the background represent Asian regional offices. Similar to Network A, the connections in Network B follow the regional boundaries. The Italian delivery centre, which is in charge of providing spare parts to Asian market, communicates a lot with Asian delivery centre located in China. The communication is denser and the communication interface South Asian Journal of Business and Management Cases, 1, 2 (2012): 91104
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Table 1. Densities of Communication, Technical Speech and Sales Information, Networks A and B % Communication Technics Sales Network A (at least sometimes) 25 15 15 Often 11 7 6 Network B (at least sometimes) 34 18 18 Often 15 7 8

Source: Research conducted by the authors.

is wider between delivery centres than between either of the delivery centres and Finnish headquarters. The Chinese delivery centre is in the middle of the network, and the model indicates that most of the communication in this particular network flows through it. The Chinese delivery centre is also quite closely tied with all Asian regional offices. The overall density of both networks is low (Table 1). In Network A, the proportion of ties in communication relative to all possible ties is 25 per cent. The density of ties in communication on both technical and sales matters is only 15 per cent. For Network B, the overall density is also quite low; however, it is higher than in Network A. The density of communication ties for Network B is 34 per cent, and for both technical and sales matters, the density is 18 per cent. For both networks, the connections are primarily patterned following regional boundaries (see Figures 1 and 2). The density within regional offices is higher than between them. This indicates that there is more communication within the regional office than between the offices. Studies on network structure suggest that high levels of network activity indicate lively exchange of resources and information among respondents, which is shown to transfer into attitudes and behaviour of interacting individuals (Burt, 1978). Previous studies have shown that densely tied networks efficiently create norms that affect the behaviour of network members. In seeking to make sense of what is right or wrong or what is good or bad, people turn to each other to reflect their own opinions and attitudes (Brass et al., 2004; Erickson, 1988). Individuals who have cohesive ties are likely to develop similar attitudes and behaviour because cohesive ties often involve frequent and empathetic ties (Burt, 1987). The low density of both networks in Glaston Services segment seems to imply, on the one hand, that instead of supporting the creation of globally agreed upon attitudes and norms, the social network structures sustain locally based attitudes and opinions. On the other hand, a structure patterned according to regional boundaries may imply a regional efficiency. It has been shown that organizational units that had more dense networks achieved a higher level of productivity than those with sparse networks (Reagans & Zuckerman, 2001), and that organizational units with higher internal density and larger external range finished projects more quickly (Reagans, Zuckerman & McEvily, 2004). The centralization of Network A is higher than the centralization of Network B (Table 2). For communication in general, the centralization was 65 per cent, for sales matters 76 per cent, and for technical issues as high as 79 per cent. The centralization indicates the extent to which some nodes in the network dominate the connections in the network. In Network A, headquarters dominate the communication, as 12 out of 20 most centralized individuals are located at headquarters. However, among the 20 most centralized individuals, there were people from every regional unit. For Network B, the centralization is on a moderate level (Table 2). For general communication, the centralization was 38 per cent. For more expert issues, the centralization was slightly higher; the centralization of technical communication

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Table 2. Centralization in Communication, Networks A and B % Communication Technics Sales Network A (at least sometimes) 67 79 81 Often 65 79 76 Network B (at least sometimes) 38 45 53 Often 52 54 62

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Source: Research conducted by the authors.

was 45 per cent and for sales communication, 53 per cent. For Network B, the communication is not dominated by headquarters, but it is more evenly spread following the operational flows between delivery centres and regional offices. Studies on positions in social networks have shown that a central position provides an individual with benefits, such as prestige, power and access to information (Brass & Burkhardt, 1993; Burt, 1992; Freeman, 1978/1979). Also, a central position allows for influencing attitudes and behaviour of others (Brass, 1992, pp. 307311). A position in the network shows a persons potential to get or deliver information or other resources and a capacity to control or interrupt the flow of information or other resources in a network (Marsden, 1990, p. 454). A gatekeeper, a person who has connections to parts of the network that is not otherwise connected, has access to more differentiated, richer source of information compared to those whose contacts are local and redundant (Krackhardt, 1990). Based on the previous studies, it could be concluded that the role of the centralized individuals in knowledge sharing is important in implementing the strategic initiative. As many of the centralized individuals are located at the headquarters, they have an important role in the transfer of information and in creating connections between globally located units and the headquarters. Both networks show that the communication is patterned primarily according to regional boundaries. The patterns of communication were not as clear when looked at the communication between functional departments. For Network A (Table 3), belonging to the different functional departments was not very significant in shaping the communication flow. Communication between individuals belonging to the same functional department was only slightly higher than between different departments. However, for Network B (Table 4), the division to functional departments was more significant. For both Services department and for Technical Support and Projects department, the amount of communication ties was even 100 per cent. The individuals in Network B communicate with both the people in the vicinity, and also a lot with people belonging to the same functional department. This indicates a matrix type of organization: both geographical location and belonging to a certain functional department shape the communication practices of the individuals. Previous research has shown that strong ties between units facilitate the transfer of complex knowledge and weak ties facilitate for transfer of less complex knowledge (Hansen, 1999).

Relational Aspects of Social Ties

The respondents were asked to describe a colleague with whom the respondent prefers to work with and to illustrate what makes collaboration with colleagues within the firm successful. Table 5 summarizes the

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Table 3. Communication Ties inside and between Departments, Network A % Services (N = 38) Technical support (N = 11) Regions (N = 34)
Source: Research conducted by the authors.

Services 45 36 11

Technical Support 33 40 13

Regions 14 26 24

Table 4. Communication Ties inside and between Departments, Network B % Spares (15) Services (6) Tech support and projects (5) Service and spares (13) DC (5) Region (24) Spares 70 87 85 3 29 12 Services 54 100 60 22 33 27 Tech Support Service and and Projects Spares 61 80 100 0 16 23 6 21 6 79 48 23 Delivery Centre 37 60 44 45 85 33 Region 18 44 33 25 47 40

Source: Research conducted by the authors.

thematization of the responses. First, the expressions in the questionnaire were grouped together under similar topics that formed a classification of the expressions. The classifications were then grouped together to form three themes that express relational values inherent in communication. The three themes express the values inherent in communicating with each other, and thus, show the aspects of relating with each other. First, the theme understanding of and commitment to the business goals shows a strong task orientation inherent in the communication within the case company. Personnel in different countries share the value of doing business well and staying competitive as a company. Second, the theme personal communication skills emphasizes the importance of being professionally reliable both in terms of skills and manner of giving advice. Also, the basic skills of communication are important in getting things done and issues solved within the company.
Table 5. Relational Values Inherent in Communication Theme Understanding of and commitment to business goals Classification Shared purpose Expressions in the Questionnaire Shared vision Common goals Serving customer Meeting expectations Same duties Passion Proactive Showing commitment Adopting to new (Table 5 Continued)

Personal leadership

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(Table 5 Continued) Theme Personal communication capabilities Classification Reliability based on competence Expressions in the Questionnaire

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Professionalism in giving advice

Communication skills

Community-building aptitude

Sense of belonging

Competence in technical issues Competence in customer issues Fixing problems Providing solutions Knowledge Capability to tell so that the information is easy to understand Quick response to questions Reliable Taking responsibility Capable of making decisions Professionalism in response Sense of duty Communication Fluency Using all available media Being available Willingness to dialogue Mutual understanding Feeling of togetherness Personal relationship with trust and support Willingness to help Willingness to go the extra mile Respect Humbleness Friendliness Positive attitude Responsibility

Humane values in communication

Source: Research conducted by the authors.

Third, the theme community-building aptitude expresses the value of positive and respectful feeling and atmosphere in communication. It can be concluded that in the globally operating case company where communication occurs across geographical and cultural boundaries, the sense of us is considered as important. The sense of us is built through strong business orientation, professionalism and sharing the value of community-building in communication practices. These three themes provide insight into the quality of relationships and into the values and norms inherent in knowledge sharing. The themes show that knowledge sharing within the firm is both a question of efficiency in information transfer and sociability in interaction. The members of Glaston Services segment consider both business orientation and community building as values in communication. This finding is in line with the argument made in the social capital literature that in order to understand the dynamics and structures of cooperative relationships, research should avoid the assumption that people are primarily motivated by economic self-interest. Sociability, approval and pleasure from interaction South Asian Journal of Business and Management Cases, 1, 2 (2012): 91104
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are goals that are as important as status and power (Nahapiet et al., 2005). The results on the quality of relationships imply that members of Glaston Services segment interact not only to receive instrumental assets, such as information power, but also to receive acceptance and social support.

Discussion
When viewing the results of the social network analysis, the top management of the Glaston Services segment engaged in a lively discussion on the current situation of knowledge sharing within the firm and on the future actions to be taken. The top management paid close attention to the differences in the densities of social networks in different regional units. The low densities of communication within the different functions raised a discussion on the role of individual interaction versus the use of e-tool in collecting and utilizing customer information. The management realized that it had relied too much on the use of e-tool in fostering customer information flow. The maintenance personnel did not, however, efficiently use the e-tool, and what the management found as concerning was that the density of communication was not at a level that would indicate proactive sharing of the customer information across the functional and regional boundaries. Also, realizing the dominance of the headquarters in communication flows helped the top management to realize that they tend to push information from the headquarters to the regional units rather than seeking to actively listen to the local personnel. In the results on centralization, the managers found support for further strengthening the role of the specialists who clearly operated in powerful positions as information collectors and knowledge brokers between the local units operating close to customers and the global management working at the headquarters. Analysis of the values and norms of knowledge sharing showed that in spite of the sparse network structure, the importance of identification to one global Glaston community is firmly expressed. This was interpreted as a solid ground for further developing internal social connections to support strategic sensitivity and knowledge sharing within the company. This was also viewed as a reassuring result after the difficult times of cost cutting and lay-offs that had taken place in the near past. Motivation for communication was largely built on trusting each others technical competence, professionalism in communication and basic communication skills. This was interpreted as an indication of a culture that highly values engineering competence. This study provides empirical evidence on the functioning of social capital in relation to strategy. The study contributes to the literature on strategic sensitivity by making social networks, the hidden part of organizational reality, visible (cf. Doz & Kosonen, 2008, p. 185). Analysis of both the structure and quality of social relationships show that a companys strategic sensitivity is embedded in social interaction. Attention to the social networks and relationships allows for understanding the social distance between the headquarters and the regional units, the power of individual actors as knowledge brokers, the resilience of inherent values in organizational communication and the motives of interacting individuals for choosing with whom to communicate. Detailed analysis of the social networks allows for further scrutinizing the construction of collective commitment, organizational flexibility and social integration mechanisms, the elements of strategic sensitivity and collaborative advantage. References
Borgatti, S.P. & Foster, P.C. (2003). The network paradigm in organizational research: A review and typology. Journal of Management, 29(6), 9911013.

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Hanna Lehtimki is Professor of Innovation Cultures at the Department of Business, University of Eastern Finland. Her research interests include relational approaches in strategic management, networks and social capital, universitybusiness collaboration, and constructionist research methodology. Katja Karintaus is a PhD student at the School of Management, University of Tampere. She has an extensive background as an entrepreneur. Her research interests cover social networks, social capital and multinational companies.

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