Neighbor Networks: Competitive Advantage Local and Personal

by Ronald S. Burt

Overview

There is a moral to this book, a bit of Confucian wisdom often ignored in social network analysis: "Worry not that no one knows you, seek to be worth knowing." This advice is contrary to the usual social network emphasis on securing relations with well-connected people. Neighbor Networks examines the cases of analysts, bankers, and managers, and finds that rewards, in fact, do go to people with well-connected colleagues. Look around your organization. The individuals doing well tend to be affiliated with well-connected colleagues. However, the advantage obvious to the naked eye is misleading. It disappears when an individual's own characteristics are held constant. Well-connected people do not have to affiliate with people who have nothing to offer. This book shows that affiliation with well-connected people adds stability but no advantage to a person's own connections. Advantage is concentrated in people who are themselves well connected. This book is a trail of argument and evidence that leads to the conclusion that individuals make a lot of their own network advantage. The social psychology of networks moves to center stage and personal responsibility emerges as a key theme. In the end, the social is affirmed, but with an emphasis on individual agency and the social psychology of networks. The research gives new emphasis to Coleman's initial image of social capital as a forcing function for human capital. This book is for academics and researchers of organizational and network studies interested in a new angle on familiar data, and as a supplemental reading in graduate courses on social networks, stratification, or organizations. A variety of research settings are studied, and diverse theoretical perspectives are taken. The book's argument and evidence are supported by ample appendices for readers interested in background details.

Product Details

ISBN-13:	9780191610097
Publisher:	OUP Oxford
Publication date:	01/14/2010
Sold by:	Barnes & Noble
Format:	eBook
File size:	12 MB
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About the Author

Ronald Burt is the Hobart W. Williams Professor of Sociology and Strategy at the University of Chicago Booth School of Business. He studies the social structure of competitive advantage in careers, organizations, and markets. He is the author of Structural Holes: The Social Structure of Competition, (Harvard University Press, 1992) and Brokerage and Closure: An Introduction to Social Capital, (Oxford University Press, 2005). He earned a bachelor's degree in social and behavioral science from Johns Hopkins University in 1971, a master's degree in sociology from the State University of New York at Albany in 1973, and a PhD in sociology from the University of Chicago in 1977. He has been on the faculty at INSEAD, Columbia University, SUNY at Albany, and the University of California at Berkeley. He took a leave of absence from Chicago to work at Raytheon Company as the Vice President of Strategic Learning.

Table of Contents

List of Figures xv

List of Tables xix

1 Introduction 1

People You Know versus the People They Know 2

So What? 6

Overview of the Book 8

Part I Establishing Secondhand Brokerage 17

2 Process Clues in Network Spillover 19

Direct Access to Structural Holes 23

Indirect Access to Structural Holes 30

Possible Returns to Indirect Access 39

Summary 56

3 Balkanized Networks 59

Product Launch Network 59

Supply-Chain Organization 72

Summary 79

4 More Connected Networks 80

A Human Resources Organization 80

HR Returns to Brokerage 83

Two Divisions in Financial Services 85

Banker Returns to Brokerage 91

Analyst Returns to Brokerage 93

Conclusions 99

Part II Testing the Perimeter 115

5 Industry Networks 117

Direct Access to Structural Holes 117

Indirect Access to Structural Holes 132

Conclusion 142

6 Closure and Stability 151

Social Chaos in Financial Services 153

Direct and Indirect Embedding 155

Reputation Stability 161

Network Decay 171

Conclusions 179

7 Mishpokhe, Not 192

Inside and Outside Brokerage 192

Why this Chapter 194

Network Diagnostics Indicating a Diversity Problem 195

Hierarchy is the Active Ingredient 203

Strategic Partners and Partner Networks 208

Conclusion 213

Part III Exploring Implications 219

8 Bent Preferences 221

Agency in Networks 221

Perception in Network Context 227

Network Defines Peers 247

Perception Defines the Network 268

Summary 279

Appendices 281

A Measuring the Network 281

B Measuring Access to Structural Holes 293

C Measuring Analyst Accuracy 305

D Industry Networks 308

E Means, Standard Deviations, and Correlations 318

F Network Weights for the Organization in Figure 8.5 324

G Denning Network Peers 329

References 366

Index 387

Editorial Reviews

"There are many interesting sidebars in this dense foray into managerial networks, including a large number in appendices. To understand the limits of structural analysis I recommend reading this book, which is full of topics that will lend themselves to new research."
—American Journal of Sociology

From the Publisher