• ISSN: 2155-7950
  • Journal of Business and Economics

It’s the Network—Stupid!

Ursula Schinzel 
(United Business Institute Luxembourg)
Abstract: This research, based on Nahapiet and Ghoshal (1998), investigates why networks, a shared language and storytelling help organizational advantage in microfoundations in international environments, especially in Strategic Human Resource Management (SHRM). The first part of this paper is dedicated to an in-depth literature review. In the second part, the research method is explained: survey questionnaires were developed based on Nahapiet and Ghoshal (1998), translated from English to French and German and distributed. The questionnaire consisted of 28 closed questions on a five-point Likert scale and two open questions regarding networks in person or digital networks, producing many direct quotes from the respondents. A total of 253 questionnaires were collected, out of which 246 were usable. One interview was conducted for the purpose of this research, with the objective to validate the results from the questionnaires, but it was not included into this paper. Further research could focus on qualitative research methods, as well as the influence of new media and age. In the third part, the findings of this research are presented: Networks provide access to information, are easily accessible, flexible and efficient, diverse, they are fast, cheap, “Who you know” determines “What you know”, there are obligations, norms, and expectations within a network, and there are issues with trust and confidentiality in networks. Some HR managers have a preference for networks in person compared to digital networks; their respective arguments are presented. A shared language is used as identifier as it defines the in-group and distinguishes from the out-group, is important in social relations, enables people to discuss and exchange information, to ask questions, to conduct business, creates group-specific communication codes, enables the combining of information, the development of new concepts and the creation of new knowledge, and influences our perception. If people do not speak the language, they are kept apart and have restricted or no access to
information. Storytelling is used to show and transmit values, norms, and culture, to share knowledge and understanding, it is useful in education and training, it helps to communicate quickly, naturally, clearly; with storytelling one can focus on a vision and plan the future, solve problems and conflicts, inspire continuous innovation, manage change, and make decisions. It is proposed that networking, in person and in digital form, a shared language as identifier and storytelling are capabilities for shaping the future and success of microfoundations in international environments. Conclusion and discussion, limitations, further research, and references follow.
Key words: Strategic Human Resource Management (SHRM); networks; storytelling; language as identifier;
international entrepreneurship; microfoundations
JEL codes: F


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