The Role of Individuals in Shaping Organizational Strategic Similarity

Organizations assimilate or differentiate their strategy to compete. While we know that individuals play an important role in determining strategic direction, there is a dearth of theory and empirical evidence on how individuals affect organizational strategic differentiation. In this paper, we investigate residential real estate offices in California to understand the role of individual social and human capital in setting organizational strategy. We take a multiplexity perspective and conceptualize social capital by depth and breadth. Depth, i.e., multiple types of connections between two individuals, enhances the quality of the relation and can therefore increase the transfer of tacit information. Breadth, i.e., multiple ties of the same type across individuals, increases the information sources and can therefore increase the variety of the flow of information. We argue that depth and breadth of individual social capital improves real estate offices' capacity to differentiate their strategies. Further, human capital, characterized as general industry- and firm-specific knowledge, enhances information overlap and thereby contributes to strategic similarity. By drawing attention to cross-level effects in organizational strategy, our work highlights the need to consider the strategic implications of the structure of individual connections.