Lexington, KY - Job satisfaction, sales opportunities, work flow and power bases all have one thing in common - their success or failure can be tied to networks.
That finding is among the many business and other applications from a new study by a team from the University of Kentucky's Gatton College of Business and Economics published last month in the prestigious SCIENCE journal.
"I think it is a very timely study, in that there has been a great deal of interest in network analysis," said Ajay Mehra, one of the authors of the study. "For businesses, social networking as a trend is here to stay."
Lead author Steve Borgatti, Chellgren Endowed Chair, led the study along with Ajay Mehra, associate professor; Daniel Brass, J. Henning Hilliard Endowed Chair; and Joe Labianca, Gatton Endowed Associate Professor. All are members of Gatton's LINKS, the International Center for the Study of Social Networks in Business. Brass is director of the center that hosts the international Intra-Organizational Networks (ION) Conference.
While the paper, "Network Analysis in the Social Sciences," is a scientific study detailing networking in social and physical sciences, the applications for business are easily evident, Mehra said.
"As a company you must recognize the power of social networking," he said. "You may put out a product and immediately there is a conversation on the Internet started about it. Many companies now recognize that this is an important new trend - customers are connecting with each other. Companies must make certain they are managing these networks or they could be managed in a negative way."
Companies can use networks to not only mitigate risks, but to identify opportunities, he said. Networks will become even more important in the future, he added.
This accounts for the growing number of networking studies and highlights the importance of the research at the Gatton School. According to the UK study, "Network research is hot today, with the number of articles Ö on the topic of social networks nearly tripling in the past decade."
A social network is made of individuals or organizations that are tied by one or more common characteristics, such as values, financial exchange or friendship. Research has shown that social networks operate on many levels, from families, corporations, up to the level of nations. Social networks are critical in determining the way problems are solved, organizations are run, and how individuals succeed in achieving their goals.
Facebook currently claims to be the world's largest online social network, with 175 million members. Of those, 54.4 million are in the United States. Facebook adds a million new members each week in the United States and five million around the world.
Even smaller networks have had a major impact, Mehra said. Twitter, for example, "has revolutionized social networks," he said. The free social messaging network allows for text-based posts of up to 140 characters in length. During the Mumbai hostage crisis in November 2008, Twitter was used to relay news of what was occurring with the terrorist attack, Mehra said.
There are also a growing number of social networks catering to businesses and professionals, including CompanyLoop, Blogtronix, Doostang, and LinkedIn, to name a few.
"We've all been surprised at how fast technology has allowed for online communities," Mehra said. "Without a doubt this is a growth area all over the world. Being able to make commercial gains as a function of these communities is very important for businesses."
According to the UK study, "Network theory also provides explanations for a myriad of social phenomena from individual creativity to corporate profitability."
This can include helping businesses in establishing and understanding teamwork, sales, strategies and leadership, Mehra said.
"There has been an interest in trying to understand what leads people to connect behind a leader," he said. "How leaders are related to networks is very important. Network analysis helps companies to know what type of executive development they need."
Network analysis can also have major influence on sales, Mehra said.
"An example would be an insurance company that has a number of sales teams in the field," he said. "Network analysis can help the company better understand how to make the field teams do better. You look at both the formal and actual patterns of communication. Then you are better able to make decisions to increase sales and help with customer retention."
The Gatton School's International LINKS Center currently works with a number of organizations in Kentucky, said Mehra, who declined to give names due to confidentiality. The Center works with civic, business and non-profit organizations to provide research on social networks. Issues have ranged from supply chains, corporate culture and venture capital to how social networks can be leveraged to deliver better health care.
The Center is becoming recognized as one of the best of its kind in the country and has put together a team that includes the best-known people in the field of social network research, Mehra said.