In the ever-changing business landscape, understanding the invisible forces that shape competitive behaviours can provide a significant advantage. A key driver often overlooked in this arena is social networks within and between competing organisations. These networks, comprised of interconnections and relationships, can have a profound influence on strategic decisions and competitive behaviours.

The concept of social networks within organisations is not new. It’s been recognised that individuals within an organisation are not isolated entities but part of a complex web of relationships. These relationships can be formal, such as hierarchical reporting lines, or informal, like friendships or shared interests. These connections can significantly influence an individual’s behaviour, decisions, and ultimately, their performance within the organisation.

Expanding this concept beyond an individual organisation’s boundaries, we can see that organisations themselves are part of a larger network. These inter-organisational networks can be comprised of various relationships, such as strategic alliances, supplier-customer relationships, or shared industry associations. These connections can significantly influence an organisation’s strategic decisions and competitive behaviours.

The influence of these networks is not always visible on the surface. It often operates in the background, subtly shaping behaviours and decisions. For example, a positive relationship with a key supplier might lead to preferential treatment, such as early access to new products or services. This can provide a competitive advantage over other organisations. Similarly, being part of a well-connected industry association might provide valuable insights into emerging trends and opportunities, influencing strategic decisions.

To truly understand the influence of these networks, we must delve deeper into their structure and dynamics. The structure of a network refers to how the entities within it are connected. For instance, in a highly centralised network, a few key entities hold most of the connections, while in a decentralised network, connections are more evenly distributed. The dynamics of a network refer to how connections change over time. For instance, how do new connections form, or old ones dissolve? Understanding these aspects can provide insights into how information and influence flow within the network, which in turn can impact competitive behaviours.

The influence of social networks extends beyond the immediate connections. The concept of ‘network effect’ suggests that the value of a product or service increases with the number of users or participants. In the context of social networks within and between organisations, this implies that the more connected an organisation is, the greater its influence and competitive advantage could be.

This brings us to the crux of our exploration. Understanding and leveraging the power of social networks can be a potent tool for shaping competitive behaviours. By recognising the influence of these networks and strategically nurturing beneficial relationships, organisations can gain a competitive edge. This approach goes beyond traditional competitive analysis, incorporating a deeper understanding of the hidden influences that shape competitive behaviours.

To harness the power of social networks, organisations need to actively engage in building and nurturing relationships, both internally and externally. This might involve fostering a collaborative culture, investing in strategic alliances, or actively participating in industry associations. While the specific actions will vary depending on the context, the underlying principle remains the same – relationships matter.

In the final analysis, the invisible web of connections that permeates our organisations has a significant influence on competitive behaviours. By recognising and leveraging these connections, we can navigate the complexities of the competitive landscape with greater insight and confidence.

Reference List:
Borgatti, S.P. & Halgin, D.S. (2011). On Network Theory. Organisation Science, 22(5), pp.1168-1181.