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PSPGEN067 Establish and Maintain Strategic Networks
PSPGEN067 Establish and Maintain Strategic Networks
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Growth and popularity of social media in recent times has created a new medium in strategic networking with people forming interest groups, alumni groups, professional groups and collaborative learning spaces through a number of web-based platforms. When managers begin the delicate transition from functional manager to business leader, they must start to concern themselves with broad strategic issues. The present study deals with the type of network as well as its key features. Stakeholders and their profile related to business, strategic values and advantages for stakeholders as well as its advantages for organizations is explained in the present study.

Type of network and key features

Networking is a socioeconomic business activity by which businesspeople and entrepreneurs meet to form business relationships and to recognize, create, or act upon business opportunities, share information and seek potential partners for ventures.

In the second half of the twentieth century, the concept of networking was promoted to help businesspeople to build their social capital (Gawer & Cusumano, 2014). In the US, workplace equity advocates encouraged business networking by members of marginalized groups (e.g., women, African-Americans, etc.) to identify and address the challenges barring them from professional success. Mainstream business literature subsequently adopted the terms and concepts, promoting them as pathways to success for all career climbers. Since the closing decades of the twentieth century, "networking" has become an accepted term and concept in American society (Johanson & Mattsson, 2015). In the 2000s, "networking" has expanded beyond its roots as a business practice to the point that parents meeting to share child-rearing tips to scientists meeting research colleagues are described as engaging in "networking". There are 3 types of strategic networks in business such as operational, personal and strategic.

Operational networks

Operational networks include direct reports, superiors, people with the power to block or support a project, and key outsiders such as suppliers, distributors and customers. All managers need to build good working relationships with the people who can help them do their jobs. The number and breadth of people involved can be impressive—such operational networks include not only direct reports and superiors but also peer within an operational unit, other internal players with the power to block or support a project, and key outsiders such as suppliers, distributors, and customers (Semrau & Werner, 2014). The purpose of this type of networking is to ensure coordination and cooperation among people who have to know and trust one another in order to accomplish their immediate tasks.

On the basis of a close study of 30 emerging leaders, Ibarra and Hunter found that operational networking was geared toward doing one’s assigned tasks more effectively. It involves cultivating stronger relationships with colleagues whose membership in the network is clear; their roles define them as stakeholders (Forsgren & Johanson, 2014). The previous quote provides with a good working definition of operational network. That is, anyone who satisfies this criterion should be considered part of r operational network.

Personal networks

Personal networks can provide important referrals, and people who can offer information and often developmental support, such as coaching and mentoring. “Personal networks are largely external, made up of discretionary links to people outside the workplace with whom having something in common (Kleymann  & Seristö, 2017). As a result, what makes a personal network powerful is its referral potential. According to the famous six degrees of separation principle, our personal contacts are valuable to the extent that they help us reach, in as few connections as possible, the far-off person who has the information that need.

Personal networking engages kindred spirits from outside an organization in an individual’s efforts to learn and find opportunities for personal advancement. Personal networks are one’s circle of casual acquaintances, typically composed of people outside of the company work for (Tunca et al. 2014). Before have a job in a particular company, many of r network ties are personal, oriented toward current interests and future potential interests. Key contacts are typically discretionary—that is, it is not always clear who is most relevant.

Most personal networks are highly clustered—that is, r friends are likely to be friends with one another as well. And, if made those friends by introducing self to them (as opposed to being introduced by a mutual acquaintance), the chances are high that their experiences and perspectives echo own (Griths et al. 2014). Ideas generated within a personal network typically circulate among the same people with shared views. This creates the risk that a potential winning idea can go unexploited if no one in the group has what it takes to bring that idea to fruition.

That connection, formed by an information broker, can expose r idea to a new world, filled with fresh opportunities for success. Diversity and breadth, that is, reaching out to contacts that can make referrals, makes the difference (DePoy & Gitlin, 2015). Through professional associations, alumni groups, clubs, and personal interest communities, managers gain new perspectives that allow them to advance in their careers. This is what is meant by personal networking.

While personal networks are important, particularly to the extent that they provide with valuable resources and access to needed resources, the challenge is to convert them into network resources that also help with operational and strategic needs (Gil, 2013). Too often, however, those individuals in the personal network just aren’t the right types of ties to be beneficial operationally or strategically, which is why need to look at broadening r network to address operating and strategic needs.

Strategic networks

Strategic networks provide opportunities to look at the bigger picture through mentoring, or simply give a different perspective on r organization.  Making a successful leadership transition requires a shift from the confines of a clearly defined operational network…It is a challenge to make the leap from a lifetime of functional contributions and hands-on control to the ambiguous process of building and working through networks (Wimmer, 2013). Leaders must accept that networking is one of the most important requirements of their new leadership roles and continue to allocate enough time and effort to see it pay off. Whereas an operational network is fairly narrowly focused, with the locus of contacts formed around specific objectives, a strategic network necessarily involves lateral and vertical ties to stakeholders inside and outside of the firm.

As Ibarra and Hunter found in their research, strategic networking is the ability to marshal information, support, and resources from one sector of a network to achieve results in another (Stam, Arzlanian & Elfring, 2014). Pushed to its logical limit, the basis of this difference is that effective leaders are highly dependent on others to get things done. The irony here is that the individuals in r network, who are the lifeline for building up the big picture, are also individuals who are likely to be outside of r immediate control. While this may seem obvious, it is often difficult to transition from a purely operational network to a strategic one, either due to simple time constraints (strategic networking takes time, often without immediate or obvious benefits) or because of negative personal attitudes toward strategic networking.

All types of networking overlap, but strategic networking will provide the most immediate impact on r organization (McCormack & Johnson, 2016).  What makes a social network so powerful is its referral potential, which can expand r network. These networks, their purpose, and how to build network membership, are summarized in “Personal, Operational, and Strategic Networks.” Most importantly, Ibarra’s work suggests that leaders need to possess all three types of networks, and not just one or two. Let’s take a look at each one of these networks.


The purpose of this network is to…

If want to find network members, try…

Personal network

exchange important referrals and needed outside information; develop professional skills through coaching and mentoring

participating in alumni groups, clubs, professional associations, and personal interest communities.

Operational network

get work done, and get it done efficiently.

Identifying individuals who can block or support a project.

Strategic network

Figure out future priorities and challenges; get stakeholder support for them.

Identifying lateral and vertical relationships with other functional and business unit managers—people outside r immediate control—who can help determine how r role and contribution fit into the overall picture.

Table 1:  Personal, Operational, and Strategic Networks

(Source: Ross, 2015, p.221)

Stakeholders and their profile

A stakeholder profile describes in detail the characteristics of a stakeholder group or organization. It is a useful reference for staff to draw on when planning for a program or project. The characteristics included will depend on the type of stakeholder but may include: ? Demographic or socio-economic information (if the group is a sector of the community) ? Structure (eg, if the group is an organization) ? Major sub groups ? Key functions and responsibilities, priorities, key issues or concerns ? r relationship with them - why they are important to , how they may be currently involved, any formal agreements that may be in place, and who in r organization may have an existing relationship ? The relationships between this group and others - for example who is a key influence on their action or behaviors, and what groups or sectors they may influence ? Description of any drivers or barriers for change.

Stakeholder profiles that are developed utilizing the knowledge and experience of a cross section of staff and board members can ensure that the information is comprehensive. A detailed step by step guide is provided below (Vernuccio, 2014). Stakeholders might be organizations (eg Government departments, industry organisations or non-government organisations) or sub-sectors of the community (eg rural residential landholders, dairy farmers). It may be that, during the development of the profiles, it is realized that there are major sub-groups or perhaps different roles or relationships of a stakeholder (Grant, 2016). If this is the case, it is recommended that additional profiles be developed for each sub-group, so that the information is comprehensive. It may be that insufficient information is available to complete the profile. Additional sources of information may be obtained through desktop reviews (eg websites, published documents or statements, socio-economic data), holding discussions (eg key informant interviews) with the stakeholder (or a third party), or conducting surveys or focus groups to ascertain information.

Profiling is an essential aspect of managing relations with stakeholders. In the financial industry, banks are encouraged and even mandated to know who their customers are (KYC). Business Analysts in turn, should know exactly who their stakeholders are, and what they're dealing with at every point in time (Seyfang & Longhurst, 2013). Analysts should never assume that they already have a thorough understanding of stakeholders. Profiling becomes even more critical if’re an analyst dealing with stakeholders from different parts of the world.

Identifying stakeholders is one thing; profiling them is a different thing altogether. Profiling stakeholders involves an appraisal of their characteristics, attitudes and behaviors.

There are 2 aspects to profiling:

Demographics: This has to do with understanding that the stakeholders are by considering their age, gender, location, marital status, education level, nationality and the like.

Psychographics: This involves describing why r stakeholders act the way they do by considering their values, interests, lifestyle, attitudes, aspirations and other psychological criteria. For example, profiling might reveal that have stakeholders who are price-sensitive and do not believe in spending large amounts of money on software solutions or may find that are surrounded by technology laggards who are slow to adopt technology (Seyfang & Longhurst, 2013). Having such knowledge beforehand is key to preparing a pitch that will help sell recommendations to the business.

Strategic values and advantages for stakeholders

Strategic networks could be a valuable source of information, expertise and competitive advantage for organizations, offering access to resources that might not be otherwise available within the organization. Networks enable and enhance flow of information between stakeholders and may lead to important strategic partnerships and collaboration.

Today's organizational context is rapidly becoming more complex and turbulent and often unexpectedly so; Value Management (VM) is ideally suited to support the organization's need to become more responsive to both stakeholders’ needs and a continually changing market and competition.

VM was initially developed at General Electric (GE) in the late 40s as value engineering and value analysis, a product improvement methodology known today as “hard” value management (Seyfang & Longhurst, 2013). Since then, it has evolved into, first “soft” VM, which focuses on achieving stakeholders’ needs and expectations with the least possible resources and more recently into a strategic methodology to help organizations stay competitive.

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