Information Exchange in User Communities: A Study of Individual Level Determinants and Firm Level Effects in the U.S. Snowsports Industry Public Dissertation Defense by Thomas Langenberg August 31, 2007
Let me introduce to you Bob, the R&D manager, and Frank, an engineer. Both are enthusiastic about skiing and work for Rossignol Skis on a technology project. Bob, R&D Manager Frank, Engineer INTRODUCTION Bob & Frank, a social network Bob and Frank have been assigned to work together on a new powder ski project. They work in a team of five (1 Bob and many Franks). signals information flow in one direction only Information Exchange in Social Networks The Franks and Bob actively exchange information about potential aspects of this project. signals information flow in two directions
It is interesting to look at Bob and Frank’s social network, because the academic literature shows increasing interest in the comparison of structural network configurations and their effects on information exchange (IE) INTRODUCTION The network could look like this .. Structural Configuration Effects on IE Frank is dependent on Bob’s input Bob can actively control what Frank knows information exchange it could also look like that vs Both Bob and Frank are sharing the same information Frank is totally independent from Frank
Over the last years, Rossignol observed that changing the set-up of its engineering teams also alters its ability to innovate. myRESEARCH INTRODUCTION different set-ups of engineering teams More research is required to understand how a firm’s ability to transform ideas into innovations depends on the structure of its intrafirm social networks Research Gap Research Question: How does the set-up of Bob and Frank’s engineering team influence Rossignol’s ability to innovate?
Cohen, W. M. & Levinthal, D. A. 1990. Absorptive Capacity: A New Perspective on Learning and Innovation . Administrative Science Quarterly, 35 (Special Issue: Technology, Organizations, and Innovation): 128-152
Lane, P. J. & Lubatkin, M. 1998. Relative Absorptive Capacity and Interorganizational Learning . Strategic Management Journal, 19(5): 461-477
Literature new idea input Rossignol innovative product no product output
Based on an intensive literature review, I find that Rossignol’s ability to innovate is among other things a result of Bob’s position in the engineering team’s set-up myRESEARCH FINDINGS Set-ups of Engineering Team Bob, R&D Manager Frank, Engineer Bob’s position : decentral Network Structure : sparse Ability to Innovate : low Explanation : Bob has no control over or access to information and communication flows. no product Effect on Rossignol’s Innovativeness Bob’s position : central Network Structure : dense Ability to Innovate : high Explanation : Bob has access to information and communication flows. Also, team members are always informed about what is going on. innovative product
U.S. alpine skiing is an interesting subfield of U.S. Snowsports due to its contradicting developments: decreasing sales & participation and increasing firm creation activities source: leisuretrends.com source: SIA Report 2005 myRESEARCH INTRODUCTION Participation & Equipment Sales are Decreasing Entrepreneurial Wave in U.S. Alpine Skiing 30% of the currently competing ski firms in U.S. alpine skiing have been founded during the last 6 years. All of them are in the freestyle skiing segment.
For companies operating in U.S. alpine skiing, there are basically two technical dimension along which they can differentiate themselves from competitors (2) Differentiation along core design & construction principles source: www.skibuilders.com (1) Differentiation along ski geometry/design parameters source: www.fischer-ski.com myRESEARCH INTRODUCTION Ski length Running length Camber Tip and tail width Waist width
I collected data through qualitative methods to arrive at a better understanding of how the industry works, especially with respect to freestyle skiing.
(In)Formal Interviews, Archival Data Analysis & Trade Magazine Research
I conducted 20+ interviews with industry representatives (CEO, product managers, resort managers, industry analysts etc.) during the annual industry trade show
Average length of the interview 30minutes
Interviews were voice recorded
I conducted 20+ in depth interviews with managers, founders, veterans, and analysts of the local Colorado/Utah ski industry
Average length of the interview was 60+ minutes
Interviews were voice recorded
Better understanding of how the industry works: start-ups are challenging established firms myRESEARCH DATA COLLECTION “ These up-start companies are sick. They support the skiing sports and push the industry forward. ” Newschoolers.com community member about the freestyle skiing movement “ Our products are going back to the roots of skiing. We want to change the industry from the inside. We are not big and corporate, but our company is rider owned and rider operated. ” CEO of a freestyle ski start-up company “ These small start-up firms that are popping up all over Colorado, California, and the East Coast now are exactly what we need. They attract a new generation of skiers that might support the sport for a long period of time .” Product Manager Incumbent Ski Firm
During my interviews, I learned that newschoolers.com is a highly referred to and influential online community of freestyle ski enthusiasts Demographics of the User Community
The community is the largest community of freestyle skiers in U.S. alpine skiing
Newschoolers.com is said to be the most influential community when it comes to setting trends, creating opinions, or initiating collective action in U.S. freestyle skiing
Newschoolers.com is actively driving the freestyle skiing sport
Bob and Frank are members of various communities, such as newschoolers.com or skibuilders.com. In all of them, they are perceived as very important. Why? myRESEARCH INTRODUCTION Creative individuals often use online communities to share ideas Research Question: Why are Bob and Frank indispensable for information exchange, while others are not? It is not yet clear how one can identify members that are more relevant to informaiton exchange in a user community than others Research Gap
First, one reason why Bob and Frank are perceived as more important might be because they are more actively exchanging information with other members
Lakhani, K. R. & von Hippel, E. 2002. How open source software works: “free” user-to-user assistance . Research Policy, 1451: 1–21
Franke, N. & Shah, S. 2003. How communities support innovative activities: an exploration of assistance and sharing among end-users . Research Policy, 32: 157-178
Shah, S. K. 2006. Motivation, Governance and the Viability of Hybrid Forms in Open Source Software Development . Management Science, 52(7): 1000-1014
Supporting Literature ** adopted from Lakhani, K. R. & von Hippel, E. 2002. How open source software works: “free” user-to-user assistance . Research Policy, 1451: 1–21, p.9 The “theory” of information exchange in user communities myRESEARCH HYPOTHESIS BUILDING Participation in information exchange Frank Rest of Community Low High Bob
Second, Bob and Frank are extremely enthusiastic about skiing and fully committed to building skis.
Frank is a true engineer
Frank loves tinkering with materials and process technologies. Finding new ways of doing certain things is a core competence of Frank.
Frank’s regularly meets with friends to chat about the latest projects and mechanical challenges he is currently facing.
Bob is obsessed by the idea of developing a radically new ski
Getting in touch with other people in order to exchange tips & tricks regarding ski technology is an important concern of Bob.
Bob is very enthusiastic about the ski project and thus wants to understand every piece of information he can get a hold of.
myRESEARCH HYPOTHESIS BUILDING Hence, such emotional commitment can be another reason why Bob and Frank are being perceived as more important than others.
According to my analysis Frank and Bob indeed outperform most of the members with respect to participation in information exchange and emotional commitment Descriptive Statistics & Pairwise Correlation Regression Results myRESEARCH FINDINGS
A user community depends on the participation in information exchange and emotional commitment of a few selected individuals that are “most central” to the community
User communities react very sensitively to taking out key members
“ Vibrant” user communities draw on a “common glue” (shared norms and beliefs) which keeps information exchange alive and the user community together
User communities can be “accessed” and understood by observing/getting in touch with the most “central” members
myRESEARCH IMPLICATIONS Implications The communication network on newschoolers.com Bob Frank
Pam & Jim, friends of Bob and Frank, have been skiing for all their lives. Just one year ago, they started to get into freestyle skiing. Research Question: What happened? Why did they change their opinion? myRESEARCH INTRODUCTION Jim Pam One Year Ago
Here is what they think
“ Rossignol is a traditional ski racing firm .”
“ They have got nothing to do with freestyle skiing ”
Today Jim Pam
Here is what they think today
“ Rossignol is sick & drives freestyle skiing .”
“ Start-up firms are great, but Rossignol has the resources to innovate ”
On the slopes they get to know Bob and Frank who invites them to join newschoolers.com Also, Jim and Pam are getting into the ski press in order to find new insights into new “tricks and moves”
The literature argues that the media are an important determinant of how a firm is perceived in the public. Little attention has been paid though to the effects of social influence. myRESEARCH HYPOTHESIS BUILDING
Moscovici, S. & Zavalloni, M. 1969. The Group as a Polarizer of Attitudes. Journal of Personality and Social Psychology, 12(2): 125-135.
Rindova, V. P., Pollock, T. G., & Hayward, M. L. A. 2006. Celebrity firms: The social construction of market popularity . Academy of Management Review, 31(1): 50-71.
Katz, E. 1957. The Two-Step Flow of Communication: An Up-To-Date Report on an Hypothesis . The Public Opinion Quarterly, 21(1): 61-78.
My Hypothesis: Besides the media, exposure to information exchange in user communities can also alter an individual’s emotional response toward a selected firm Supporting Literature Media Reporting
Established ski firms (e.g. Rossignol) are pushing ski technology
Start-up ski firms base their success on a marketing hype
Technology is the main industry driver
“ Prevailing Opinion” Social Influence
Start-up firms are the founding fathers of U.S. freestyle skiing
Start-up firms challenge European incumbent firms successfully
Start-up ski firms take skiing back to its natural roots
“ Prevailing Opinion”
Being active members in the newschoolers.com community strengthens Jim & Pam’s opinion about Rossignol as being not very credible in U.S. freestyle skiing Perceived Credibility of Rossignol Low Exposure to newschoolers.com High Exposure to newschoolers.com myRESEARCH Low FINDINGS Low Case 1: Low Exposure to Media < Perceived Credibility of Rossignol of Perceived Credibility of Rossignol of Explanation Jim is influenced by the “prevailing opinion” of newschoolers.com members High Exposure to Media Pam Pam Jim Jim
Actively sourcing additional information from the media helps Jim & Pam to improve their perception of Rossignol’s credibility in U.S. freestyle skiing Exposure to Media Low Exposure to newschoolers.com High Exposure to newschoolers.com Case 2: High Exposure to Media High Low High Perceived Credibility of Rossignol > Perceived Credibility of Rossignol of Perceived Credibility of Rossignol of Explanation Jim learns in the media that Rossignol is quite active when it comes to driving freestyle skiing myRESEARCH FINDINGS Pam Jim Pam Jim
When marketing products to Jim and Pam, Rossignol needs to take advantage of both the user community (case 1) as well as the media (case 2) Exposure to Media Low Exposure to User Community High Exposure to User Community myRESEARCH IMPLICATIONS Insights
The “social” media has gained importance
Interaction among users can influence a customer’s perception of a firm’s performance within an industry
User communities provide access to current thoughts, perceptions, and opinions with respect to industry developments, firm activities and products
High Low High Perceived Credibility of Rossignol Case 1 Case 2 Pam Jim Pam Jim
What am I going to do next? Good question, because there are so many options and opportunities … myFUTURE (Semi) Professional Triathlete Iron Ore Mining & Steel Making Expert
… in any case, as many of you might already know, I think I will continue to ride waves! e-governance open source software technolgical innovation online social networking Aerospace Engineering IT Consultancy & System Integration Academic Program Manager & Researcher Researcher Social Sciences Professional Triathlete technology & operations management myFUTURE http:// thomaslangenberg.com