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How Intra-Firm Networks Create Value and Liabilities in Micro-Level Processes of Global Virtual Teams

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How Intra-Firm Networks Create Value and Liabilities in Micro-Level Processes of Global Virtual Teams How Intra-firm Networks Create Value and Liabilities in Micro-level Processes of Global Virtual Teams By Pekka Vahtera PhD Candidate Leeds University Business School Centre for International Business University of Leeds (CIBUL) University of Leeds Supervised by: Professor Peter Buckley Professor Jeremy Clegg Mr. Adam Cross Submitted in accordance with the requirements for the degree of Doctor of Philosophy Submitted for examination on September 2013 The candidate confirms that the work submitted is his/her own and that appropriate credit has been given where reference has been made to the work of others. This copy has been supplied on the understanding that it is copyright material and that no quotation from the thesis may be published without proper acknowledgement. © 2013The University of Leeds and Pekka Johannes Vahtera II Acknowledgements This thesis has been completed with the help and support of many people. My first acknowledgement goes to Jonna, my loving fiancée. She has supported me throughout my academic studies in Finland, Australia, and United Kingdom unconditionally for a long time. Her love, support, and encouragement have been my greatest assets in making this dissertation possible. I would also like to extend my warmest thanks to my family. My Mom has always supported me in every way possible, and encouraged me to further pursue my academic studies. Her advice and assistance have formed the very basis upon which this dissertation is built on. I am also grateful to my sister, who has always been proud of my achievements and highly supportive of my studies. People in CIBUL have had a remarkable impact on my studies throughout. I have been very proud to be supervised by Peter, Jeremy, and Adam, who have formed an excellent supervisory team. From the day one, I have been very impressed with the amount of time and dedication these academics place into supervising their PhD students. The help and guidance I have received from them has been immensely valuable. Moreover, it has been an absolute pleasure to work with other wonderful people in CIBUL, especially: Mario Kafouros, Hanna Gajewska-De Mattos, Hinrich Voss, Surender Munjal, Liz Mason, Hayley Smith, and Janet Wood. I would also like to thank the Finnish Cultural Foundation as well as the Foundation for Economic Education (Finland) for their financial support. Scholarships obtained from these foundations have covered the main expenditures involved in crafting this dissertation and therefore made this study possible. Finally, I would like to thank my colleagues and friends who have made my studies and my life in Leeds in general a fantastic experience. Especially, I would like to extend my gratitude to Conor McDonald, Charlotte Coleman, Jane Stoate, Adam Clenton, Ger Duff, Lucy McVay, Janja Trstenjak, Liang Chen, and Le Thai Phong. Pekka Vahtera Leeds, March 2014 III Abstract Research on organisational networks is abundant, yet understanding about the positive and negative effects of networks in global business settings remains relatively limited. This dissertation analyses the network mechanisms that add value to global virtual teams (GVTs). More specifically, it examines the role of (i) network structure, (ii) individuals’ network position, and (iii) the types of relationships which people share as both value-adding mechanisms as well as sources of potential liabilities. Added value in this study refers to interpersonal benefits which may help GVTs realise their full potential, meaning an increased knowledge flow, decreased levels of conflict and a higher degree of integration among diverse team members, amongst other things. The theoretical underpinning of this study lies within the intersection of network theory, international business, and virtual team management. The empirical analysis is conducted within a social network data set collected from 160 GVT members from three multinational companies working in a high technology sector. Statistical analyses of these data suggest that network mechanisms such as the types of ties people share (i.e. friendship), reciprocity (i.e. two-way interaction), the structure of ties (i.e. cliques), and an individual’s network positions (i.e. brokerage over structural holes) have important effects on knowledge sharing and potential for conflict. Surprisingly, the GVTs are found to show little tendency for homophily (tendency for similar others) and no support is found for the argument that cultural dissimilarities or geographical distance would negatively affect interpersonal interactions. It is concluded that network-based theories need to be more rigorously tested in global contexts in order to truly evaluate their generalisability for international business. IV Table of Contents Acknowledgements ................................................................................................................... II Abstract .................................................................................................................................... III List of tables ............................................................................................................................. IX List of figures ........................................................................................................................... IX Glossary of terms and abbreviations ........................................................................................ XI 1. Introduction to the dissertation .......................................................................................... 1 1.1 Formal and informal networks in organisations .......................................................... 2 1.2 Defining global virtual teams ...................................................................................... 4 1.3 Social networks in global business environments ....................................................... 7 1.4 Positioning of the present study .................................................................................. 9 1.5 Research objectives ................................................................................................... 16 1.6 Research setting......................................................................................................... 18 2.1 Methodological underpinning: methodological individualism ................................. 19 1.7 Contribution to theory and practice ........................................................................... 21 1.8 Structure of the dissertation....................................................................................... 23 2 Previous research and context of the dissertation ............................................................ 27 2.2 Complexity of the global business environment ....................................................... 27 2.3 Key benefits of virtuality and technology in GVTs .................................................. 29 2.4 Key challenges of virtuality and technology in GVTs .............................................. 31 2.5 Key benefits of diversity in GVTs ............................................................................ 35 2.6 Key challenges induced by diversity ......................................................................... 38 2.7 Managing diversity .................................................................................................... 41 2.8 The effect of group size for GVTs ............................................................................ 43 2.9 Structure of a GVT: hierarchy and centralisation of decision-making ..................... 43 3 Overview of network theory ............................................................................................ 48 3.1 Network theory and social network analysis............................................................. 49 3.1.1 What is a network?............................................................................................. 49 V 3.1.2 A Brief history of social network analysis ......................................................... 49 3.1.3 What makes social network analysis a distinctive approach? ........................... 51 3.2 Introduction to key social network concepts ............................................................. 52 3.3 Key benefits of networks........................................................................................... 56 3.3.1 Social Capital ..................................................................................................... 56 3.3.2 Key benefits at the level of individual, group, and organisation ....................... 57 3.3.3 Benefits of networks in GVTs ........................................................................... 59 3.4 Costs and trade-offs in network formation ................................................................ 60 3.4.1 Network size ...................................................................................................... 61 3.4.2 Overly cohesive networks .................................................................................. 62 3.4.3 Overreliance on network partners ...................................................................... 64 3.4.4 Access to information and resources ................................................................. 65 3.5 Main criticisms of network theory and ways forward............................................... 67 4 Research methods ...........................................................................................................
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