The Effect of Employer Networks on Workplace Innovation and Training

Abstract

If innovative work practices improve performance, why does the intensity of their adoption vary substantially across establishments? Following a lead suggested by some sociological studies, the authors empirically investigate the role of social networks (ties to other organizations) in the organizational learning associated with diffusion of innovative work practices. Using establishment data on formal affiliation and other network measures, they find that managerial participation in networks—specifically, in industry and cross-industry associations, civic organizations, and the internal networks of multi-unit firms—positively affected both the probability that high-performance work practices and employee training programs would be adopted and, where they were adopted, the intensity of their adoption. Furthermore, multiple affiliations raised the likelihood that an establishment would pursue an intensive approach to work reorganization and training.