Mobility of Top Marketing and Sales Executives in Business-To-Business Markets: A Social Network Perspective

Link: https://doi.org/10.1509%2Fjmr.14.0124

Top executives have considerable influence over organizational strategy, structure, and culture in business-to-business markets. Critical organizational outcomes, such as firm growth and profitability, depend on top executives’ values and cognitions, and these develop over the course of executives’ work lives, often across multiple firms.

Executives’ affiliations with past employers provide them with social ties across organizations. These social ties, emanating from both the prior work affiliations of current top marketing and sales executives (TMSEs) and the current affiliations of prior TMSEs who have left, could provide opportunities for firms to acquire external business knowledge through the social capital that results from such relationships.

Which leads to the question: “Do the social ties of TMSEs created through their prior work affiliations actually result in improved firm
performance?”

In a paper published in 2017, researchers turned to social network theory to construct TMSE mobility networks, which reflected the experience records of all TMSEs in the chosen semiconductor industry. They considered two firms to be connected if a current TMSE of a firm worked at the other firm in the past. By generalizing this pattern to the entire semiconductor industry, they could derive a social network based on TMSE mobility.

From the 108 firms in their sample, the researchers identified 142 current TMSEs, because firms used both joint and separate TMSE positions for marketing and sales. Taking in the work experience records for all 142 TSMEs, they created the mobility network for each. For example, for the experience record, they assigned a value of 1 to the executives who had links between Zicor, Altera, Analog Devices, and National Semiconductor to ONNN. They applied the same procedure for all the TMSEs and thereby obtained a complete 108 * 108 symmetric matrix of movement by TMSEs across firms within the semiconductor industry.

The results from the analysis show that information reach and richness that emanate from centrality and brokerage positions of a firm in a TMSE mobility network, combined with motivation and ability, improve firm market valuations by anywhere from $6 million to $39 million (here the average firm valuation was $3 billion).

The study offered several strategic insights for Chief Sales Officers:

1. TMSE tenure and firm market orientation are essential for absorbing the benefits of managerial social capital.
2. Firms should work to hire TMSEs with the appropriate mix of prior work affiliations in order to benefit from the social ties of these newly hired TMSEs.
3. Firms should help newly hired TMSEs integrate into their firm, so that they can absorb, assimilate, and use the information that emanates from the social ties.
4. Market-oriented firms that give their TMSEs time to integrate would benefit from investing in hiring TMSEs with high managerial social capital.