THE SOCIAL NETWORK APPROACH IN STRATEGY RESEARCH: THEORETICAL CHALLENGES AND METHODOLOGICAL ISSUES

In recent years, the network perspective has become highly influential in the strategy research. A number of strategic phenomena and outcomes have been studied successfully by adopting the methodology of social network analysis and taking a relational perspective on firm behavior and outcomes. However, while the social network methodology provides a powerful research tool for strategy researchers, it is fraught with both theoretical and methodological challenges. In this paper, we argue that many of the issues related to using the social network approach in strategy research derive from the use of an essentially individual level methodology being applied to the level of the organization. Organizations being large, complex, and nested entities, the social processes that are implied in network research at the level of the individual are often questionable at the interorganizational level. We identify ten specific issues, grouped under three major heads: issues relating to network structure, to network ties, and to network actors and action. We discuss the theoretical and methodological challenges associated with each issue and conclude with some suggestions for using the network perspective in strategy research.