Knowledge Acquisition for Innovation: Networks of Top Managers in the European Fashion Industry

• Author: Alexander Fliaster,Sonja Sperber
• Date: 01 June 2020
• DOI: http://doi.org/10.1111/emre.12373
• Published date: 01 June 2020

Knowledge Acquisition for Innovation:

Networks of Top Managers in the European

Fashion Industry

ALEXANDER FLIASTER

1

and SONJA SPERBER

2

1

Chair in Innovation Management; Faculty ofSocial Sciences, Economics, and Business Administration, Otto-Friedrich-

University Bamberg, Kärntenstraße 7, 96052, Bamberg

2

ISM International School of Management, Campus Frankfurt; Global Brand & Fashion Management, Mörfelder Landstraße55,

60598, Frankfurt/Main, Germany

Past research revealedthat social networks play a decisive rolefor the receipt of new knowledge by engineers and

middle-levelmanagers and, thus, essentiallycontribute to innovation. However,the question of by which network ties

top managers–that is, the key organizational decision-makers –acquirewhich kind of innovation-related knowledge

resourceshas not yet been explored systematically. Our paper addressesthis research gap by empirically analyzing

knowledge ties of top executives in the European fashion and accessories industry. We draw on the concept of

relational embeddedness and focus on knowledge providers and knowledge ties of top managers. Based on this

theoretical framework, we conducted 22 semi-structured interviews with top executives from 11 leading European

companies within this industry. We present the main results of this explorative study and identify its important

implications from both research and managerial perspective.

Keywords: Innovation; knowledge networks; knowledge management; top management; fashion and accessories

industry; upper echelons

Introduction

The burgeoning volume of social network research in

management and organization studies has shown that

networks essentially contribute to the creation of

intellectual capital and innovation, particularly the

development and implementation of new and useful

products, services, and processes (Nahapiet and Ghoshal,

1998; Borgattiand Foster, 2003;Kilduff and Brass, 2010).

In innovation-related activities, work performance

particularly depends on informal collaboration, for

example, obtain ing knowledge that contri butes to problem

solving (Krackhardt and Hanson, 1993; Cross and

Cummings, 2004; Fliaster and Schloderer, 2010).

Informal social network mechanisms have been found to

serve as ‘an effective medium for acquiring and encoding

timely, current, and soft information’(Tushman and

Scanlan, 1981, p. 290) and, thus, foster creativity and

innovation (Moran, 2005).

While previous innovation studies (Tushman and

Scanlan, 1981; Moran, 2005; Perry-Smith, 2006;

Tortoriello and Krackhardt, 2010; Gardet and Mothe,

2011) have focused primarily on networks among R&D

scientists, engineers, business consultants and middle

managers, less attention has been dedicatedto knowledge

networks of other key innovation actors –the ‘upper

echelons’(Hambrick and Mason, 1984). This gap is

particularly remarkable as upper echelons that is, the

chief executive officers, other senior managers, and top

management teams (TMT) (Bromiley and Rau,

2016) have been found to strongly affect many

organizational areas, including the innovation activities

(Bantel and Jackson, 1989; Smith and Tushman, 2005).

Empirical studies have revealed, for instance, that top

managers (TMs) contribute to a broad range of

innovations, such as product-market innovations and

organizational innovations that transform organizational

structures and processes (e.g., Elenkov et al., 2005;

Elenkov and Manev, 2005).

Correspondence: SonjaSperber, ISM International Schoolof Management;

Campus Frankfurt; Global Brand & Fashion Management; Mörfelder

Landstraße 55, 60598 Frankfurt/Main, Germany, E-mail sonja.

sperber@ism.de

European Management Review, Vol. 17, 467–483, (2020)

DOI: 10.1111/emre.12373

© 2019 The Authors. European Management Review published by John Wiley & Sons Ltd on behalf of European

Academy of Management (EURAM)

This is an open accessarticle under the terms of the Creative Commons Attribution-NonCommercial-NoDerivsLicense,

which permitsuse and distribution in any medium,provided the originalwork is properlycited, the use is non-commercial

and no modifications or adaptations are made.

In this context, past studies found that the TMs’impact

on innovation is related to their individual characteristics,

such as personality, demographic attributes, individual

skills and intraorganizational tenure (e.g., Liu et al.,

2012; Balsmeierand Buchwald, 2015). On theother hand,

however, network scholars increasingly argue that

‘leadership requires the management of social

relationships’(Balkundi and Kilduff, 2005, p. 956), and

thus more attention has to be paid to the role of leaders’

social networks (Bono and Anderson, 2005), particularly

with regard to innovation (Fliaster and Golly, 2014). In

this context, Bono and Anderson (2005) for example,

found that managers who exhibit transformational (that

is, more innovation-friendly) leadership behaviors tend

to hold more central positions in the organization’s

informal advice and influence networks. Other studies

have shown that in innovative medium-sized companies,

senior executives create strong ties with a small number

of blue-collar workers to acquire novel product ideas

and market insights (Fliaster and Golly, 2014). Previous

research also beganto address TMs’knowledge networks

that cross the organizational boundaries. For instance,

Collins and Clark (2003) found that strong and diverse

top managerial external networks increase both sales

growth and stock price. Furthermore,the study conducted

by Peng and Luo (2000) within the context of transition

economy revealed that interpersonal ties of Chinese

managers with top executives at other firms and with

government officials help improve the firms’

performance.

Despite these valuable insights, a number of important

issues still remain under-investigated. First, prior studies

have primarily addressed the structure of top managers’

networks (e.g., Cao et al., 2015) and paid less attention

to the distinctive f eatures of network ties t hat are

particularly deployed by TMs to acquire innovation-

related knowledge. Second, whereas innovation studies

found that for successful innovations various kinds of

knowledge (such as market-related and technological

knowledge) are needed (Sammarra and Biggiero, 2008),

the insights about which kinds of innovation-related

knowledgeare actually acquired by TMs throughdifferent

types of networkties are still very sparse.Third, while past

network studies have mainly addressed TMs’work-

related contacts, less is known about the role of private,

non-work-related contacts (e.g., family and friends) as

well as contacts to former colleagues specifically

regarding the acquisition of innovation-related

knowledge. Addressing these three research gaps is an

important and necessary step, since TMs are the key

innovation actors in organizations (e.g., Elenkov and

Manev, 2005) and because these gaps concern three very

fundamental network facets –network nodes, ties, and

knowledge flow (Borgatti and Halgin, 2011; Phelps

et al., 2012).

In what follows, we explore these under-investigated

research questions theoretically and empirically and

analyze, through which types of network ties to which

types of network contacts do senior executives in the

European fashion and accessories industry acquire which

types of knowledge that they consider as relevant for

innovation. In doing so, we aim to extend the innovation

and social networks literatures and enrich the

understanding of innovation -related social activities of

TMs. In doing so, we answer recent calls in innovation

research for paying more emphasis to the social aspects

of TM involvement in innovation, that is, for exploring

the contacts between top managers and other people that

are conducive to new product development (e.g.,

Felekoglu and Moultrie, 2014). To deliver this

contribution to the literature, we draw on the concept of

relational embeddedness (Granovetter, 1985, 1992) and

focus on knowledgeproviders (alters) and knowledge ties

of TMs (e.g., Uzzi, 1997; Gabbay and Leenders, 2001).

Based on this theoretical framework, we collect and

analyze data on ego networks of top executives from

leading companies within the European fashion and

accessories industry. Finally, we present the main results

of this explorative study and identifyits implications from

both research and managerial perspective.

Knowledge networks at the individual

level

The relational embeddedness

As the aim of our study is to explore by which dyadic ties

TMs acquire knowledge that is relevant for their

innovation endeavors, we define a TM’s knowledge

network as a set of nodes –that is, the given TM (ego)

and his/her direct contacts (alters) –that serve as

repositories of distinctive knowledge (Phelps et al.,

2012). In doing so, we draw on probably the most

fundamental un derlying idea for explaining consequences

of social networks (Borgatti et al., 2009; Borgatti and

Halgin, 2011) –the direct flow of resources from node

to node. According to this conception, the work success

of a manager is dependent on resources that he or she

receives from alters (Borgatti and Foster, 2003). While

the ties can act as ‘pipes’for various kinds of resources,

we focus on one specific flow –the knowledge that is

relevant for the actor’s innovation efforts.

The organizational resea rch on social networ ks has

been strongly inspired by Granovetter’s(1985,p.487)

fundamental argument that the actions of social actors

are ‘embedded in concrete, ongoing systems of social

relations’. The embeddedness principle is currently seen

as a core idea that discerns network studies from other

research streams (Kilduff and Brass, 2010). More

468 A. Fliaster and S. Sperber

© 2019 The Authors. European Management Review published by John Wiley & Sons Ltd on behalf of European

Academy of Management (EURAM)