Understanding network picture complexity: an empirical analysis of contextual factors

Abstract

There has recently been increasing interest in the relationship between managers' perceptions of their surroundings and their interactions with other actors. This sense-making issue is linked to the development of the concept of network pictures. Our paper investigates a hitherto neglected aspect of network pictures: their complexity. In several bodies of literature, complexity has been found to affect firms' action and performance. We theoretically derive a model of network picture complexity, which is then used to analyze forty-seven network pictures collected in seventeen companies from two distinct networks. Complexity is assessed on a number of dimensions at the individual, and organizational levels. We show the relationship between complexity and an individual manager's characteristics (number of years in a company, as well as experience in internally or externally oriented functions). We also provide evidence for a relationship between cognitive complexity and the number of years a company has been established in business, and the complexity of companies' internal structures. In doing so, this article contributes to a better understanding of the contextual factors that drive sense-making in business networks.