IDEAS home Printed from https://ideas.repec.org/a/inm/ororsc/v29y2018i5p912-930.html
   My bibliography  Save this article

Homophily and Individual Performance

Author

Listed:
  • Gokhan Ertug

    (Lee Kong Chian School of Business, Singapore Management University, Singapore 178899)

  • Martin Gargiulo

    (INSEAD (Asia Campus), Singapore 138676)

  • Charles Galunic

    (INSEAD (Europe Campus), 77305 Fontainebleau, France)

  • Tengjian Zou

    (Lee Kong Chian School of Business, Singapore Management University, Singapore 178899)

Abstract

We study the relationship between choice homophily in instrumental relationships and individual performance in knowledge-intensive organizations. Although homophily should make it easier for people to get access to some colleagues, it may also lead to neglecting relationships with other colleagues, reducing the diversity of information people access through their network. Using data on instrumental ties between bonus-eligible employees in the equity sales and trading division of a global investment bank, we show that the relationship between an employee’s choice of similar colleagues and the employee’s performance is contingent on the position this employee occupies in the formal and informal hierarchy of the bank. More specifically, homophily is negatively associated with performance for bankers in the higher levels of the formal and informal hierarchy whereas the association is either positive or nonexistent for lower hierarchical levels.

Suggested Citation

  • Gokhan Ertug & Martin Gargiulo & Charles Galunic & Tengjian Zou, 2018. "Homophily and Individual Performance," Organization Science, INFORMS, vol. 29(5), pages 912-930, October.
    • Handle: RePEc:inm:ororsc:v:29:y:2018:i:5:p:912-930
    DOI: 10.1287/orsc.2018.1208
    as

    Download full text from publisher

    File URL: https://doi.org/10.1287/orsc.2018.1208
    Download Restriction: no
    File URL: https://libkey.io/10.1287/orsc.2018.1208?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Gompers, Paul A. & Mukharlyamov, Vladimir & Xuan, Yuhai, 2016. "The cost of friendship," Journal of Financial Economics, Elsevier, vol. 119(3), pages 626-644.
    2. Simon Rodan & Charles Galunic, 2004. "More than network structure: how knowledge heterogeneity influences managerial performance and innovativeness," Strategic Management Journal, Wiley Blackwell, vol. 25(6), pages 541-562, June.
    3. Ray Reagans, 2005. "Preferences, Identity, and Competition: Predicting Tie Strength from Demographic Data," Management Science, INFORMS, vol. 51(9), pages 1374-1383, September.
    4. Martin Gargiulo & Mario Benassi, 2000. "Trapped in Your Own Net? Network Cohesion, Structural Holes, and the Adaptation of Social Capital," Organization Science, INFORMS, vol. 11(2), pages 183-196, April.
    5. Marschan-Piekkari, Rebecca & Welch, Denice & Welch, Lawrence, 1999. "In the shadow: the impact of language on structure, power and communication in the multinational," International Business Review, Elsevier, vol. 8(4), pages 421-440, August.
    6. Makela, Kristiina & Kalla, Hanna K. & Piekkari, Rebecca, 2007. "Interpersonal similarity as a driver of knowledge sharing within multinational corporations," International Business Review, Elsevier, vol. 16(1), pages 1-22, February.
    7. Deepak Hegde & Justin Tumlinson, 2014. "Does Social Proximity Enhance Business Partnerships? Theory and Evidence from Ethnicity's Role in U.S. Venture Capital," Management Science, INFORMS, vol. 60(9), pages 2355-2380, September.
    8. Joshi, Aparna & Labianca, Giuseppe & Caligiuri, Paula M., 2002. "Getting along long distance: understanding conflict in a multinational team through network analysis," Journal of World Business, Elsevier, vol. 37(4), pages 277-284, January.
    9. Ray Reagans, 2011. "Close Encounters: Analyzing How Social Similarity and Propinquity Contribute to Strong Network Connections," Organization Science, INFORMS, vol. 22(4), pages 835-849, August.
    10. Kelly A. Mollica & Barbara Gray & Linda K. Treviño, 2003. "Racial Homophily and Its Persistence in Newcomers' Social Networks," Organization Science, INFORMS, vol. 14(2), pages 123-136, April.
    11. Tjur, Tue, 2009. "Coefficients of Determination in Logistic Regression Models—A New Proposal: The Coefficient of Discrimination," The American Statistician, American Statistical Association, vol. 63(4), pages 366-372.
    12. Jone L. Pearce & Qiumei Jane Xu, 2012. "Rating Performance or Contesting Status: Evidence Against the Homophily Explanation for Supervisor Demographic Skew in Performance Ratings," Organization Science, INFORMS, vol. 23(2), pages 373-385, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lianren Wu & Jinjie Li & Jiayin Qi & Deli Kong & Xu Li, 2021. "The Role of Opinion Leaders in the Sustainable Development of Corporate-Led Consumer Advice Networks: Evidence from a Chinese Travel Content Community," Sustainability, MDPI, vol. 13(19), pages 1-20, October.
    2. Ilya R. P. Cuypers & Charmi Patel & Gokhan Ertug & Jiatao Li & Youtha Cuypers, 2022. "Top management teams in international business research: A review and suggestions for future research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(3), pages 481-515, April.
    3. Giorgio, Luca & Mascia, Daniele & Cicchetti, Americo, 2021. "Hospital reorganization and its effects on physicians’ network churn: The role of past ties," Social Science & Medicine, Elsevier, vol. 286(C).
    4. Rajat Khanna & Isin Guler, 2022. "Degree assortativity in collaboration networks and invention performance," Strategic Management Journal, Wiley Blackwell, vol. 43(7), pages 1402-1430, July.
    5. Zhang, Yi & Chen, Kaihua, 2022. "Network growth dynamics: The simultaneous interaction between network positions and research performance of collaborative organisations," Technovation, Elsevier, vol. 115(C).
    6. Ilya R. P. Cuypers & Gokhan Ertug & John Cantwell & Akbar Zaheer & Martin Kilduff, 2020. "Making connections: Social networks in international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(5), pages 714-736, July.
    7. Ilya R. P. Cuypers & Gokhan Ertug & John Cantwell & Akbar Zaheer & Martin Kilduff, 0. "Making connections: Social networks in international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 0, pages 1-23.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mary M. Maloney & Priti Pradhan Shah & Mary Zellmer-Bruhn & Stephen L. Jones, 2019. "The Lasting Benefits of Teams: Tie Vitality After Teams Disband," Organization Science, INFORMS, vol. 30(2), pages 260-279, March.
    2. Manuel E. Sosa, 2011. "Where Do Creative Interactions Come From? The Role of Tie Content and Social Networks," Organization Science, INFORMS, vol. 22(1), pages 1-21, February.
    3. Downar, Benedikt & Ernstberger, Jürgen & Koch, Christopher, 2021. "Determinants and consequences of auditor dyad formation at the top level of audit teams," Accounting, Organizations and Society, Elsevier, vol. 89(C).
    4. Mäkelä, Kristiina & Björkman, Ingmar & Ehrnrooth, Mats, 2010. "How do MNCs establish their talent pools? Influences on individuals' likelihood of being labeled as talent," Journal of World Business, Elsevier, vol. 45(2), pages 134-142, April.
    5. Florence Villesèche & Evis Sinani, 2023. "From Presence to Influence: Gender, Nationality and Network Centrality of Corporate Directors," Work, Employment & Society, British Sociological Association, vol. 37(2), pages 486-504, April.
    6. Marco Tortoriello & Ray Reagans & Bill McEvily, 2012. "Bridging the Knowledge Gap: The Influence of Strong Ties, Network Cohesion, and Network Range on the Transfer of Knowledge Between Organizational Units," Organization Science, INFORMS, vol. 23(4), pages 1024-1039, August.
    7. Pekkala Kerr, Sari & Kerr, William, 2020. "Immigrant entrepreneurship in America: Evidence from the survey of business owners 2007 & 2012," Research Policy, Elsevier, vol. 49(3).
    8. Rajat Khanna & Isin Guler, 2022. "Degree assortativity in collaboration networks and invention performance," Strategic Management Journal, Wiley Blackwell, vol. 43(7), pages 1402-1430, July.
    9. Zou, Xi & Ingram, Paul, 2013. "Bonds and boundaries: Network structure, organizational boundaries, and job performance," Organizational Behavior and Human Decision Processes, Elsevier, vol. 120(1), pages 98-109.
    10. Ray Reagans, 2011. "Close Encounters: Analyzing How Social Similarity and Propinquity Contribute to Strong Network Connections," Organization Science, INFORMS, vol. 22(4), pages 835-849, August.
    11. Alfred M. Jaeger & Sung Soo Kim & Arif N. Butt, 2016. "Leveraging Values Diversity: The Emergence and Implications of a Global Managerial Culture in Global Organizations," Management International Review, Springer, vol. 56(2), pages 227-254, April.
    12. Helene Tenzer & Siri Terjesen & Anne-Wil Harzing, 2017. "Language in International Business: A Review and Agenda for Future Research," Management International Review, Springer, vol. 57(6), pages 815-854, December.
    13. Jesse Karjalainen & Aku Valtakoski & Ilkka Kauranen, 2021. "Interfirm network structure and firm resources: Towards a unifying concept," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 17(3), pages 227-264.
    14. Ambos, Tina C. & Ambos, Björn & Eich, Katharina J. & Puck, Jonas, 2016. "Imbalance and Isolation: How Team Configurations Affect Global Knowledge Sharing," Journal of International Management, Elsevier, vol. 22(4), pages 316-332.
    15. Ma, Danni & Fee, Anthony & Grabowski, Simone & Scerri, Moira, 2022. "Dual Organizational Identification in Multinational Enterprises and Interpersonal Horizontal Knowledge Sharing: A Conceptual Model," Journal of International Management, Elsevier, vol. 28(1).
    16. Tracy L. Dumas & Katherine W. Phillips & Nancy P. Rothbard, 2013. "Getting Closer at the Company Party: Integration Experiences, Racial Dissimilarity, and Workplace Relationships," Organization Science, INFORMS, vol. 24(5), pages 1377-1401, October.
    17. Arjun Bhardwaj & Sushanta Kumar Mishra & Israr Qureshi & Kunal Kamal Kumar & Alison M. Konrad & Marc‐David L. Seidel & Babita Bhatt, 2021. "Bridging Caste Divides: Middle‐Status Ambivalence, Elite Closure, and Lower‐Status Social Withdrawal," Journal of Management Studies, Wiley Blackwell, vol. 58(8), pages 2111-2136, December.
    18. Saad Alnahedh & Bader Alhashel, 2021. "Political ideology in M&A," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 48(9-10), pages 1711-1746, October.
    19. Adam M. Kleinbaum & Toby E. Stuart & Michael L. Tushman, 2013. "Discretion Within Constraint: Homophily and Structure in a Formal Organization," Organization Science, INFORMS, vol. 24(5), pages 1316-1336, October.
    20. Sonal Pandya & David Leblang, 2017. "Risky business: Institutions vs. social networks in FDI," Economics and Politics, Wiley Blackwell, vol. 29(2), pages 91-117, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ororsc:v:29:y:2018:i:5:p:912-930. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.