The small world of German CEOs: a multi-method analysis of the affiliation network structure

Abstract

This paper seeks to understand the structure of corporate networks in the period following the dissolution of Deutschland AG ("Germany Inc."). For this purpose, affiliation networks among chief executive officers (CEOs) that are based on common membership in various societal organizations will be examined. I apply an innovative mix of methods for studying a sample of CEOs from the 100 top companies in Germany in the 2010s. Based on social network analysis, I show that the overall affiliation network has all features of a small-world network, i.e., a high clustering coefficient and a short path length among the CEOs. The average degree of separation among German CEOs is only two steps. Another innovative contribution of this paper is its study of the linkage between affiliation network features and patterns of corporate recruitment. Using multiple correspondence analysis, I show that different subgroups of the overall affiliation network have their specific network characteristics and recruitment patterns. Within the network, managers from automotive and technical engineering often assume brokerage positions, while managers from the trade branch are largely isolated. This study shows that the affiliation networks and corporate recruitment patterns are interlinked; the transformation of corporate networks is a dynamic outcome of interrelations among different subgroups within the network, each with distinct educational, professional, and network characteristics.