Organizational network research is a field of study that examines how relationships between actors—individuals or organizations—affect important performance outcomes. The performance outcomes range from career success and creativity for individuals, to market share, financial performance, or the diffusion of practices in organizations. Network research also examines the factors that affect stability and change in individual relationships as well as of whole networks. Sociology is the greatest contributor to this field, while the other contributing disciplines include anthropology, social psychology, economics, and, most recently, physics and biology. Perhaps the biggest contribution of this field to our understanding of economics and society is the notion of “social capital”—the benefits that accrue to individuals or organizations as a result of their social relationships.
There are no specific textbooks on organizational networks research. The books in this section provide overviews of important topics. However, several works provide insights into the main elements of network theory and methodology. Ronald Burt published the first book on structural holes (Burt 1992), followed by a summary of the debate between advocates of brokerage (including himself) and proponents of closure (Burt 2005). Lin 2001 reminds us that the content flowing through a social structure is as important as the structure itself. According to Podolny 2005, social structures also carry status signals that bring benefits to their holders. The other books cited in this section provide us with methods geared toward the study of networks. Wasserman and Faust 1994 is widely regarded as a prerequisite for any network course, while Borgatti, et al. 2013 is an ideal companion to the widely-used UCINET software. Finally, Kogut 2012 provides a valuable introduction to the analysis of large-scale networks.
Borgatti, Stephen P., Martin G. Everett, and Jeffrey C. Johnson. Analyzing Social Networks. London: SAGE, 2013.
Provide a useful step-by-step guide on how to analyze social networks. The book contains suggestions for how to collect network data, how to manipulate it, how to compute standard measures using UCINET (the standard software for network analysis), and how to handle large networks as well as small ego networks.
Burt, Ronald. Structural Holes: The Social Structure of Competition. Cambridge, MA: Harvard University Press, 1992.
Burt developed the influential concept of structural holes—disconnections between an actor’s contacts. The book explains the origins and consequences of structural holes for individuals and organizations. It also suggests how to calculate now standard measures of brokerage, such as efficiency, effective size, constraint, and hierarchy.
Burt, Ronald. Brokerage and Closure: An Introduction to Social Capital. Oxford: Oxford University Press, 2005.
Examines different forms of social capital arising from the presence or absence of direct ties between an actor’s contacts. This book summarizes the results of the debate between the proponents of two forms of social capital: brokerage and closure. It suggests that the optimal network structure should involve elements of both—brokerage to access heterogeneous information or resources, and closure to enable cooperation and trust.
Kogut, Bruce. The Small Worlds of Corporate Governance. Cambridge, MA: MIT, 2012.
Contains a result of a multi-country and multi-author research project that examines the networks of ownership and control around the world. The book develops methodology for analyzing large scale networks that can be applied beyond the realm of corporate governance.
Lin, Nan. Social Capital: A Theory of Social Structure and Action. Cambridge, UK: Cambridge University Press, 2001.
Explains the importance of social connections and relations in achieving the goals of individuals, social groups, and collectivities. Lin stresses the significance of choice: actors purposively engage other actors in order to reach positive outcomes. Such outcomes are obtained not as a result of social structures, but as a result of the resources that flow through them.
Podolny, Joel M. Status Signals: A Sociological Study of Market Competition. Princeton, NJ: Princeton University Press. 2005.
This book examines the origins and consequences of status in networks and markets. Status is a signal of an actor’s perceived quality, and it is distinct from reputation. Status is often determined by the actors’ connections to other actors. High-status actors enjoy lower costs, high visibility in the network, and even higher revenues.
Wasserman, Stanley, and Katherine Faust. Social Network Analysis: Methods and Applications. Cambridge, UK: Cambridge University Press, 1994.
Examines how to compute the basic measures of network analysis still used today. This volume comes, perhaps, the closest to the notion of a textbook on social networks, but it requires some familiarity with basic graph theory and doesn’t provide the reader with exercises to sharpen their own network analysis skills.
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