Cooperation Network Structure and Individual Effectiveness in Knowledge-Intensive Organizations 1

This paper argues that an individual's ability to add value in knowledge-intensive organizations depends on the structure of the networks in which the individual (ego) enacts her roles in the value creation process within the firm. The effects of network structure, however, vary across the two roles ego enact in that process: a producer role that links her to alters who provide inputs for her work, and a supplier role in which she interfaces with alters who demand her inputs for their work. A key differentiating element between the two roles is the need for alters' cooperation. While cooperation can enhance ego's effectiveness in the producer role, it is inconsequential in the supplier role. Consistent with this analysis, we show that the benefits of cooperation can initially offset the costs of information redundancy in the producer role, causing an inverted u-shaped relationship with the density of contacts among alters in that role. Effectiveness in the supplier role, however, is mostly affected by redundancy costs and thus it decreases linearly with the network density. Evidence comes from studying the effects of network structure on role effectiveness among a large sample of top employees working for the Equities division of a global securities firm.