Value of Friendship: Instrumental and Sentimental Motivations for Corporate Executives' Networking Behavior

Abstract

Research on corporate executives social networks has primarily focused on the consequences of interpersonal ties between corporate executives. Relatively little attention has been paid to the motivation of executives in forming and retaining interpersonal ties. The present study addresses this research gap by showing how executives evaluate the potential economic value of interpersonal tie with another executive and decide to build ties based on that evaluation. Drawing on social exchange theory, we argue that corporate executives have instrumental and sentimental dimensions of networking motivations in building and retaining friendship and advice ties with other executives. Our results show that higher (lower) distance along instrumental (sentimental) motivations of networking between executives increases the likelihood of friendship seeking tie since corporate executives evaluate different dimensions of benefits from interpersonal ties. Furthermore, our findings show that corporate executives seek advice from more competent executives, conditional on the executive being a friend. Over time, the sentimental dimension of motivation loses influence on friendship tie but the instrumental dimension of motivation continues to impact corporate executives networking behavior. Our empirical study utilizing social network data among Korean corporate executives from 2 time periods provides strong support for our theoretical contribution.