Social Network Analysis: Emergent Versus Prescribed Patterns in Organizatizational Buying Behavior

ABSTRACT - Adopting a social network perspective, this paper argues that insights into organizational buying behavior can be secured by examining the work flow and communication network operative during ongoing purchasing activities in the firm. Social network analysis provides a method for studying the structural dimensions of individual influence within an organizational context. By focusing on recurring patterns of behavior, the present conceptualization represents a departure from past organizational buying center studies which explore the influence and communication patterns surrounding a particular purchasing decision.

Citation:

Michael D. Hutt and Peter H. Reingen (1987) ,"Social Network Analysis: Emergent Versus Prescribed Patterns in Organizatizational Buying Behavior", in NA - Advances in Consumer Research Volume 14, eds. Melanie Wallendorf and Paul Anderson, Provo, UT : Association for Consumer Research, Pages: 259-263.

Advances in Consumer Research Volume 14, 1987      Pages 259-263

SOCIAL NETWORK ANALYSIS: EMERGENT VERSUS PRESCRIBED PATTERNS IN ORGANIZATIZATIONAL BUYING BEHAVIOR

Michael D. Hutt, Arizona State University

Peter H. Reingen, Arizona State University

ABSTRACT -

Adopting a social network perspective, this paper argues that insights into organizational buying behavior can be secured by examining the work flow and communication network operative during ongoing purchasing activities in the firm. Social network analysis provides a method for studying the structural dimensions of individual influence within an organizational context. By focusing on recurring patterns of behavior, the present conceptualization represents a departure from past organizational buying center studies which explore the influence and communication patterns surrounding a particular purchasing decision.

INTRODUCTION

Network analysis has been employed by anthropologists to study kinship and community ties (e.g., boissevain 1974), by social psychologists as an approach to analyze communication patterns in small groups (e.g., Leavitt 1951), by sociologists to study opinion leadership and diffusion of innovation (e.g., Coleman, Katz and Menzel 1957), and by consumer behavior researchers to examine brand congruence in interpersonal relations (e.g., Reingen et. al 1984). Recently, network analysis has been offered as a method for examining the emergent social structure in organizations (Tichy 1981). This paper advocates network analysis as a method for exploring the structure of influence patterns during ongoing organizational purchasing processes.

The discussion is diwided into three parts. First, a review of alternative conceptual approaches to the study of organizational buying behavior is provided. Also included is a summary of findings from past research studies that examined individual influence in the organizational buying process. Second, a network perspective of organizational buying behavior is advocated. This conceptualization argues that a social network view is especially appropriate in exploring the structural dimensions of intraorganizational influence during organizational purchasing processes in the firm. Third, selected propositions issuing from this formulation are highlighted.

CONCEPTUAL PERSPECTIVES OF ORGANIZATIONAL BUYING BEHAVIOR

Anderson and Chambers (1985) advocated a reward/measurement model of organizational buying behavior. The central assertion of this model is that organizational buying behavior is best understood as work behavior. Since organizational members are rewarded for contributing to organizational goals, the model rests on the proposition that the behavior of organizational members is determined largely by the way in which their activities are measured and rewarded. Thus, the approach emphasizes the role of reward and measurement systems in motivating purchase process participants.

The model also includes a group consensus component, which delineates a process of group interaction and consensus formation. The focus here is on exploring the particular mechanisms which function to override the reward/measurement systems and social influence processes of the primary work units. Within the buying center, such mechanisms may include social influence, group rewards, coalition formation, and hierarchical decision making.

Following a contingency-related model, Spekman (1977, 1978) conceived the buying center as a "decision unit" whose members are involved in making procurement-related decisions. Thus, the structural properties of the buying center can be explored by examining the relations of each buying center member with some or all of the other members. Thus, the buying center exists as a communication network which may not necessarily derive its structural configuration from the formal organization but rather from the regularized patterning of interpersonal communications chat typify the industrial buying decision process. The structural configuration of the buying center serves to define its decision-making potential. Likewise, particular structural dimensions of an organization, such as its size or degree of centralization, would presumably influence the concentration of authority the nature of the work flow, and communications among buying center members.

Spekman and Stern (1979) examined the relationship between various structural dimensions of the buying center and environmental uncertainty. Drawn from organizational theory and macrosociology, the structural dimensions included centralization, rules and procedures, participation in decision making, and division of labor. The results indicated that increased environmental uncertainty appeared to lead to an increase in the level of participation in decision making. In turn, the relative influence of the purchasing agent rose as the level of environmental uncertainty increased. Illustrative findings from other studies which have examined involvement and influence in the buying center are presented in Table l.

TABLE 1

INVOLVEMENT AND INFLUENCE IN BUYING CENTER: ILLUSTRATIVE FINDINGS

Johnston and Bonoma (1981) examined the buying center, operationalized as a communications network, against four organizational structural variables (size, centralization, formalization, complexity) and three purchase situation attributes (novelty, complexity, importance). The specific communication network properties explored in the study included: (l) vertical involvement (how many levels of the organizational hierarchy exerted influence on the purchase); (2) lateral involvement (how many different departments and divisions exerted influence on the purchase); (3) extensivity (how many individuals were involved in the purchase decision process); (4) connectedness (the degree to which the participants in the purchasing process were linked with each other by communication flows); and (5) centrality (the sum of the purchasing manager's sent and received communications, weighted by the number of buying center members). The results indicated that capital equipment decisions involved more levels of corporate management, more departments on the same level, more individuals, and less communication than industrial services. The purchasing manager's centrality did not differ significantly between the two types of purchases: goods versus services. Overall, this research suggested that both the structure of the organization and the specific purchase situation affected the buying center's dimensions. The importance of the purchase situation and the degree of organizational formalization had the most significant effects.

Calder (1977) proposed that insights into organizational buying behavior could be secured by drawing upon role theory. Structural role theory considers three elements: the individuals, the positions that people occupy in the organization, and the tasks that constitute the operational units of workflow through the organization. Using digraphs (directional graphs), Calder presented the results of an exploratory study which traced the procurement of office equipment within a financial institution. The analysis generated a pictorial representation of persons, positions, and tasks involved in the purchase, and revealed information concerning workflow, assignment of persons to positions, and relationships between the position and task elements. Johnston (1981) notes that structural role analysis provides ". . .a useful conceptual framework for capturing the micro-level relationships which lie at the core of the buying center concept" (p. 85).

Bristor (1985) argues that the concept of a network represents significant potential for modeling various marketing phenomena, including organizational buying processes. The asserts that the buying center concept implies a group level of analysis which is inappropriate for the study of organizational buying behavior. For example, individuals in the buying center may not interact with every other buying center member or may not perceive themselves as belonging to a group. By contrast, the network perspective formally accounts for the fact that the individual is embedded in a social system of dyadic relationships. The buying network is offered as an alternative to the buying center concept. Bristor (1985) defines a buying network as ". . .the set of individuals involved in a purchase process, over a specified time frame, and the set of one or more relations that link (or fail to link) each dyad" (p. 221).

A NETWORK PERSPECTIVE OF ORGANIZATIONAL BUYING BEHAVIOR

Emerging perspectives of organizational buying behavior emphasize the importance of examining the complex communication and workflow patterns that encircle the purchasing process. Webster and Wind (1972) note that the communication system or network within the organization ". . . influences the behavior of members of the buying center by performing the functions of informing, commanding and instructing, persuading and influencing, and integrating the performance of individual actors" (p. 57). In essence, all organizations are communication networks held together by the flow of information (Zaltman, Duncan and Holbek 1973).

This paper suggests that particular insights into organizational buying behavior can be gained by exploring the structure of the purchasing or procurement process from a social network perspective. Consistent with this perspective, the analysis centers on the workflow and communication network operative during ongoing purchasing activities in the firm. Thus, the focus is on the stream of information and resource flows that characterize ongoing purchasing processes in the organization. Such a perspective of organizational buying behavior is consistent with Weick's contention (1969) that organizations consist of patterned, repeated interactions among social actors. By focusing on recurring patterns of behavior, the present conceptualization represents a departure from past organizational buying center studies which explored the influence and communicative patterns surrounding a particular purchasing decision.

Organizational Buying Structure

The structure of an organizational component, such as the purchasing function, is found in the program that it adopts to govern the behavior of its members (March and Simon 1958). The development and maintenance of relationships within and between organizational components are exhibited in the flows of information and resources (work, money) among positions. Thus, an assessment of the resource and information flows provides an important process perspective of the transactions that occur between organizational components and individuals involved in the organizational buying process. Network analysis can be used to assess these relationships and distinguish four types of relations in organizational contexts: (l) exchanges of goods or services; (2) exchanges of affect (liking, friendship); (3) exchanges of influence (power); and (4) exchanges of information (Tichy 1981).

A network view is especially instrumental in exploring the structural dimensions of intraorganizational influence. Organizational structure can be defined ". . . as the enduring characteristics of an organization reflected by the distribution of units and positions within an organization and their systematic relationships to each other" (James and Jones 1976, p. 76). In turn, the specific work that organizations diwide among subunits is further diwided among individuals, and some individual positions will clearly be more powerful than others (Brass 1984).

Consistent with a network perspective, organizational structure may result from formally prescribed positions or from emergent patterns of behavior. To illustrate, an organizational buyer may engage in information exchanges that do not conform to formal communication channels or may informally modify the prescribed workflow in accomplishing a particular purchasing task. As these informal interactions become recurring patterns of behavior, a further element of structure is added to the organization.

In advancing a structural perspective on intraorganizational influence, Brass (1984) notes: "An employee's structural position within the organization is the result of the particular combination or interaction of both formal and emergent interdependencies. Thus, the organization can be conceptualized as networks of interrelated structural positions, with individual employees occupying these relational positions" (p. 519). A number of theorists (Kanter 1979, Perrow 1970, Pfeffer 1981) have concluded that power or influence is basically a structural phenomenon.

Exploring Individual Influence

Network theory holds that relative power and influence can be derived from patterns of social relations (Burt 1977, Galaskiewicz 1979). This perspective is compatible with power conceptualized in relational terms. For example, A's influence over B is related to B's dependency on A for needed resources (Emerson 1962, Wrong 1979). Additionally, individuals or groups that control needed resources create dependencies from others (Crozier 1964, Hickson et al. 1971, Thompson 1967). Relatedly, research supports the proposition that structural centrality is related to influence (Leavitt 1951, Mulder 1960). Moreover, research suggests that individuals who are centrally located in a network display high degrees of cohesiveness and low degrees of dependency (Alba and Moore 1978, Kadushin 1968, Turk 1977).

Empirical results from two recent intraorganizational influence studies support the linkages between social network structural relationships and individual influence levels. First, Blau and Alba (1982) found that individuals are empowered by unit participation in organization-wide communication networks. Also, to a lesser degree, individuals were found to be more powerful if they developed contacts external to the organization. Second, Brass (1984) observed that relative positions of employees within workflow, communication, and friendship networks strongly related to influence as perceived by both supervisors and nonsupervisors.

Organizational Buying Networks and Individual Influence

The structural perspective of intraorganizational influence advanced by brass (1984) provides a framework for: (l) exploring individual influence patterns during recurring organizational buying-related activities; and (2) describing buying processes in terms of the relational and structural properties of social networks. Key components of this framework are highlighted in Figure l.

Influence is defined as the ability to affect purchasing-related decisions in a direction favorable to the perceived interests of an individual. Workflow networks are the paths that provide for the exchange of task goods or services while communication networks transmit job-related information. Within this formulation, departmental membership is considered an individual attribute that affects perceived influence. Likewise, the structural position that an individual occupies within the social networks may contribute to and be indicative of that organizational member's influence during recurring buying decision processes. Observe from Figure l that consideration is given to three structural network dimensions:

(1) centrality is the number of direct paths between an individual and the other participants within the network;

(2) reachability is the number of alternate direct or indirect paths between an individual and the other participants within the network;

(3) connectedness is the average number of relationships that an individual forms with others within the network (Knoke and Kuklinski 1982).

FIGURE 1

ORGANIZATIONAL BUYING BEHAVIOR: A STRUCTURAL PERSPECTIVE OF INDIVIDUAL INFLUENCE

Linking these network properties to organizational buying influence patterns suggests a number or research propositions.

Centrality

P1 Centrality in the organizational buying workflow network is positively associated with influence.

P2 Centrality in the organizational buying communication network is positively associated with influence.

Brass (1984) found that access to and control of work flows and work-related communications in the work unit, department, and organization are related to individual influence. In addition, Fombrun (1983) found that the network centrality of an individual is a significant determinant of perceived power in an R&D department.

Reachability

P3 Greater criticality of the position occupied by an individual within the organizational buying network is positively associated with influence.

Criticality has been found to be positively associated with influence among organizational subunits (Hinings et al. 1974). Pfeffer (1981) and Mechanic (1962) also proposed that irreplaceability can be a source of power. Brass (1984) found that individuals who occupied positions vital to the continued exchange of task goods or services were perceived influential. Since organizational buying involves individuals representing different functional units, occupying a position that lies on the only reachable path for work exchanges empowers the individual relative to other network members. For example, if an engineer has sole product approval authority, clearly that network position bestows that individual with influence during continued work exchanges with a buyer.

P4 A larger number of transaction alternatives available to an individual within the organizational buying network is positively associated with influence.

An individual whose network position allows for several alternative paths for his/her outputs obviously has minimal dependence on any one path. Indeed, Brass (1984) found that the number of alternatives available to an individual was positively associated wish influence.

Connectedness

P5 Connectedness in the organizational buying communication network is positively associated with influence.

Connectedness refers to the average number of relationships that an individual forms with others within the network. The ability of an individual or unit to coordinate and integrate (that is, connect) is related to intraorganizational influence. Blau and Alba (1982) found that the integration of a work unit within organization-wide communication networks was the basis of individual power. Likewise, Bacharach and Aiken (1976) found support for their hypothesis that greater participation in the communication network provides an individual with greater influence during decision making.

P6 Access to the dominant reference groups in the organization is positively associated with influence.

Individuals who interact with the most influential members of the firm would be perceived as having an impact on key decisions. Access to this particular group may provide an individual with valuable information, resources or support. Indeed, Brass (1984) identified a dominant group based on (l) their personal interaction patterns and (2) their high influence ratings. His results indicated that criticality, transaction alternatives, and access to their dominant group showed significant positive relationships with perceived influence.

A CONCLUDING NOTE

By analyzing organizational buying influence during ongoing and recurring purchasing processes, the realities of organizational decision making within a firm can be explored. This perspective considers organizational buying activities to be generally interrelated and inseparable. Organizational members representing different functional departments are investigated by exploring their purchasing-related workflow and communication patterns. Such an approach is consistent with the organizational buying behavior research tradition. Several organizational buying behavior studies have revealed that (l) the buying center can be considered a communications network (Johnston 1979, Spekman and Stern 1979), and (2) graphs can be utilized to depict the sequence of purchasing tasks and formal and informal relationships among members of the purchasing process (Calder 1977). Network analysis provides a tool for extending the buying center concept and isolating influence patterns embedded in the prescribed and emergent structure of the organization.

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