BEWARE OF MANAGERS NOT BEARING GIFTS: HOW MANAGEMENT CAPACITY AUGMENTS THE IMPACT OF MANAGERIAL NETWORKING

Networks and managing in the network have been central concerns of public management scholars for years (Provan and Milward 1991; O'Toole 1997; Agranoff and McGuire 2003; Herranz 2008). The literature has investigated the extent of networks (Hall and O'Toole 2004), the appropriate way to measure networks and networking behaviour (McGuire 2002; Meier and O'Toole 2005), and the role that networking plays in improving organizational performance (O'Toole and Meier 2003). Although there are qualifications in the literature to the rosy scenario that managing in the network is always a good thing (O'Toole and Meier 2004), and although the benefits of managerial networking show diminishing returns (Hicklin et al. 2008), there has not been much investigation of the factors that enhance or detract from networking's impact on performance. This study examines the interactive relationship between management capacity and managerial networking using a panel of several hundred public organizations over an 8-year period. The empirical results show that managerial capacity does interact with networking and enhances the positive impact of networking over an array of performance indicators. At the same time, building managerial capacity is a central management choice, and that decision has ramifications for organizations that are not always positive. The paper concludes with the managerial implications of the strategic choice to build management capacity.