Network Dynamics and Cooperation in Organizations A Signaling Perspective

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› Rafael Wittek ICS/Department of Sociology

A Plea for a Signaling Approach

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Standard network theory is ill-equipped to model network dynamics and cooperation, in particular for organizational settings

Signaling Theory is way more powerful.

Outline ① Relational Signaling in Organizations ② Standard Network Theory vs. Signaling Theory ③ Two Illustrative Empirical Analyses ④ Conclusion

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Relational Signaling in Organizations

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Relational Signaling in Organizations 1. Formal organization creates interdependence

• Workflow (task, outcome), authority • Negative (damage potential) and positive externalities (surplus

potential), e.g. career tournaments 2. Interdependence creates regulatory interest (“joint

production motivation”) • Individuals will primarily be concerned to manage their inter-

dependencies (avoid damages, generate surplus) 3. Regulatory interest breeds relational signaling

• Individuals constantly assess the actions of others for underlying signaling implications

• Individuals anticipate on signaling effects of their own actions

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Standard Network Theory vs. Relational Signaling Theory

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Attributes Compatibilities and complementarities between attributes (Assortativity)

Relevant only if they have signaling value (Honesty) • Quality (types of journal) • Productivity (no. of publications)

Ties Pipes for exchange of goods and services (Connectionism)

Prisms framing obligations and expectations (Framing) • Cooperativeness (coauthor)

Positions Affect behavior through creating structural constraints (Structuralism)

Affect behavior through reputation value (Reputation) • Visibility (# co-authors)

Network Theory vs. Signaling Theory

Theory Wide variety of psychological mechanisms (Ecclecticism)

Joint production motivation (Social Rationality) • Interdependence

Standard Theory Signaling Theory

Two Illustrative Empirical Applications

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Two Illustrative Research Questions

› Where do informal power reputations in organizations come from?

› Is interpersonal trust a cause or a consequence of third party gossip?

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Research Design: LIONS › Longitudinal Intra-Organizational Network Studies

• Roster method • Dyadic outcomes

• Informal Power • Gossip • Friendship

› German Paper Factory • Private, n=22 Engineers, 4 waves (1995-1997)

› Dutch Youth Care Organization • Public, n=33 Pedagogues, 3 waves (2008-2010) • Ongoing collaborative field study

Informal Power 10/24/2012 | 11

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Informal Power

› Power attribution network: How much influence does each colleague have on the state of affairs in the site?

› 0 = none, 10=very much

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10.511

9.498

7.683

7.5

7.415

6.746

6.222

5.597

4.433

3.544

3.466

2.882

2.674

2.635

2.413

1.865

1.855

1.732

1.656

1.461

1.153

1.059

0.977

0.938

0.907

0.635

0.612

0.512

0

10.511

9.498

7.683

7.5

7.415

6.746

6.222

5.597

4.433

3.544

3.466

2.882

2.674

2.635

2.413

1.865

1.855

1.732

1.656

1.461

1.153

1.059

0.977

0.938

0.907

0.635

0.612

0.512

0

A

B

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0

1

2

3

4

5

6

78

9

1011

12

13

14

15

1617

18

19

20

21

22

2324

25

26

27

28

29

30

31

32

Power through “ties” › Contact frequency:

How often did you talk to each colleague at the site?

› 1 = none, 6=eight or more times a weak

Power through “agency” › Influence tactics › Compliance gaining

strategies › Power strategies

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Standard Theory › Positions

• Structural advantage breeds influence

› Attributes • Strategy breeds

influence only in combination with structural advantage

Signaling Theory › Positions

• Structure breeds influence only if position is visible

› Attributes • Strategy breeds

influence indepen-dently of structural advantage

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Power Strategies Paper Factory “There are many ways how people deal with cooperation problems. How appropriate do you, personally, consider each of the following behaviors?”

1. resignation 2. retaliation 3. bilateral arguing 4. public negotiation 5. asking opinion of others 6. complaining to a superior

›Rating: -100 per cent “inappropriate” to +100 per cent “appropriate”

Youth Care Organization “How likely is it that you use each of the strategies to influence others (colleagues and manager) at work?”

1. socializing selectively (“Knowing the right people”)

2. coalition formation / upward appeal (“Trying to obtain the informal support of higher-ups”)

3. positive manipulation / ingratiation (“Having a feeling for when and how you can bring up certain issues”)

›7-point Likert scale (1=very unlikely, 7 very likely), Cronbach’s α = .72 ›Adapted from Kyl-Heku and Buss (1996) and Kipnis, Schmidt and Wilkinson (1980)

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Informal power through time. Valued ties analyses, Paper Factory

Source: Labun, Wittek, Steglich, Wielers (2011). Power networks: The effects of reputation, social embeddedness and power strategies. Manuscript.

Those who complain to superiors are perceived as less influential

Direct influence strategies have no effect on perceived influence

Power Reputation

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Source: Labun, Wittek, Steglich, Wielers (2011) Pathways to Power Reputation: The Interplay between Structural and Visibility Mechanisms. Manuscript.

Influence: Exponential Random Graph Model (Youth Care Organization)

Those who have many ties are perceived as more influential

Those who experience much structural constraint perceive any others as more influential

Power Reputation

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Source: Labun, Wittek, Steglich, Wielers (2011) Pathways to Power Reputation: The Interplay between Structural and Visibility Mechanisms. Manuscript.

Influence: Exponential Random Graph Model (Youth Care Organization)

Those who exhibit strategic influence behavior are perceived as more influential

No interaction effects between structure and strategy use

Gossip 10/24/2012 | 21

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Sociometric Question: Gossip “Thinking back to the past three months, which colleagues have regularly talked to you informally about colleagues in your Department?” ›Maximum of 10 choices allowed ›Answer category: yes/no

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Gossip in Youth Care Organization

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Standard Theory › Ties: Friendship

breeds Gossip Rationale: Trust reduces risk of being sanctioned for gossiping

Signaling Theory › Ties: Gossip breeds

Friendship Rationale: Gossip as costly signal: signaler reveals part of her social capital, making herself vulnerable

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Gossip and Friendship: Co-Occurrence

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Ego considering alter a friend at t1 does not increase the chance that alter gossips to ego at t1+n

If ego considers alter a friend at t1, ego is likely to gossip with alter at t1+n

Gossip is not the result of frequent contact, but of functional interdependence

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Friendship is not the result of frequent contact, but of functional interdependence

Ego gossiping with many alters at t1 decreases ego’s popularity as a friend at t1+n.

If ego gossips to alter at t1, alter is likely to consider ego a friend at t1+n

If ego gossips to alter at t1, ego is likely to consider alter a friend at t1+n.

Conclusion 10/24/2012 | 29

Signaling in Social Networks: Towards a Research Agenda

› Promising approach for the study of network evolution and cooperation

› Has more to say about which attributes matter › Ties are more than pipes for resource exchange › Generates better predictions for wide variety of

problems (Costly Punishment, Representative Voice, Knowledge Sharing, …)

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