Mostafa Sayyadi, Author, Leading Between the Lines
Competitive advantage is sought by many executives, for instance, Grant concentrates on knowledge application, and argues that firms are entities that must apply the knowledge that their employee’s possess in order to enhance competitive advantage. An example of this is when Jamie Diamond left Citigroup to head up J.P. Morgan in the 2013, he was paid 20 million dollars to not take any people with him to J. P. Morgan for three years. Thus, knowledge creation and application manifest themselves in people, organizations, systems, and processes and should be guarded like gold in the Federal Reserve Bank. In this article, I place a new emphasis on inter-companies social networks, because its strategic importance in exploiting knowledge and enhancing effectiveness at all levels of the organizations.
The question arises whether inter-companies social networks themselves can be a source of effectiveness for CEOs. This basic question remained unexplored since the inception of the business literature to date. Based upon this gap in research to date, I pose that inter-companies social networks may expose organizations to missed opportunities and lack of using leadership opportunities to their benefit given the existing opportunities in international and domestic markets, and how this lack of judgment may concern stakeholders.In addition, the lack of effective inter-companies social networks may lead to human assets to be ineffective. My final assumption addressed in this article is that the crucial role of knowledge management activities may be underestimated and underutilized.
Executives can develop relationships and interactions to provide valuable resources for the organization as a whole. In doing this, they can design inter-companies social networksto efficiently and effectively upgrade organizational capabilities and interact with their environment more effectively. In particular, executives design inter-companies social networks to deploy organizational capabilities and interact with both the internal and the external environment. Executives, therefore, apply inter-companies social networks to manage knowledge assets to create new ideas and knowledge aimed at achieving organizational objectives. First and foremost, just as one organization is holding knowledge back from competitors they are following suit. Knowledge could be the most important component of success in this ever changing technological environment of today. Thus, inter-companies social networks are internal resources affecting knowledge and in most cases, knowledge is the most strategic factor of competitive advantage.
Inter-companies social networks also improve the effectiveness of CEOs in developing a more innovative climate. Inter-companies social networks positively impact on CEOs’ views, and motivate them in expanding relationships with their subordinates. Inter-companies social networks can also enable CEOs to develop relationships between CEOs and subordinates. Furthermore, inter-companies social networks can positively contribute to the effectiveness of CEOs related to employees’ empowerment. This argument could be justified by stressing this fact that firms linked together by using inter-companies social networks are more capable in the effectiveness of learning.
In addition, inter-companies social networks enhance knowledge acquisition, and knowledge transference among companies. Additionally, the process of knowledge storing is highly dependent on the extent to which knowledge is transferred by these inter-companies social networks. This transference of knowledge itself can improve knowledge utilization and creation within organizations.
In conclusion, I offer practical contributions for managers at all levels of the organization. This article raises vital questions as to how inter-companies social networks can successfully contribute to the effectiveness of CEOs and subsequently improve performance at all levels of the organization. In addition, I suggest that a firm’s ability to enhance knowledge management and also organizational performance can be highly affected when executives adopt inter-companies social networks as the primary form of managing people, resources, and profitability. Many organizations still implement knowledge management initiatives without sufficient consideration of their inter-companies social networks. When executives ensure the effectiveness of inter-companies social networksthey, in fact, increase control and lesson operational risk.
Grant, R.M. (1996). Toward a knowledge-based theory of the firm. Strategic Management Journal, 17, 109-122.