Informal Structure and Social Networks

President

Pete (HR)

Ann Rose Mary

Emma

Bill (R&D)

Amy

Ann

Andy

Minna (Sales)

Pege

Lisa

Tina

Organizational Chart

The Actual Network Structure

Note: UCINet Data from In the Office: Networks and Coalitions, Thurman, 1979

The Company Behind the Chart

• The formal structure of the organization the official titles, tasks, and roles people have in the organization

• Informal structure indicates how work actually gets done– Who communicates with one another?

• This usually mirrors formal structure, but never perfectly – Why do you think this is the case?

What is a social network?= Node

Each linerepresents a tie

A social tie:Relationships that provideresources like advice, information,and social support

Note: We usuallythink of ties as positive relationships

Social Network, def: The pattern of relationships (ties) between nodes(people)

Properties of Social Ties

• Social ties

– Relationships between individuals

• Relationships vary by strength

– Emotional intensity

– Duration

– Frequency of interactionNode

Node

Tie

Why do strength of ties matter?

• Strong ties – Social support (i.e. friendship)

– Buy-in where strong level of trust is needed

• Weak ties – Better for accessing information on

novel opportunities

– That’s why they are largely more useful for finding jobs (Granovetter, 1973)

Properties of Networks

= Ego (person of focus)

Density:# of ties in ego’snetwork divided bythe possible ties in ego’s network

Centrality: The number of relationships a focal “ego” has with others

What is the ego’snetwork centrality?

Density Formula:{(# of ties) / [n(n-1) / 2] * 100}

n= number of nodes tied to ego

Why does centrality matter?

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Degree Centrality

G

C

A

Why does density matter?• When density is high in a network, almost everyone is

communicating with everyone else– Indicates a shared identity (‘we are all friends’)– High level of trust– Collaboration is easy (‘let’s all work together’)– Mobilization is easy (‘fire-fighting’)

• But, since everyone communicates with everyone else, it’s hard to get new ideas, information, and resources into the network

• Novel resources and collaboration are both important in a network

How is this achieved?

Before Microsoft Took Off. . .

• Why was Bill Gate’s mom one of the most important people in his network?

William Dawes

Redundant contacts

in one town

Which one does history remember?Revere vs. Dawes

High number of contacts

High brokerage

Low number of contacts

Low brokerage

Paul Revere

Diverse contacts in

different towns

Source: Uzzi, B. & S. Dunlap (2005). "How to build a better network." Harvard Business Review, 83(12): 53-60. 13

Structural Holes and Closure

Ego

Structural Hole

Structural HoleStructural Hole

Structural Hole

Closure

Structural hole: when

“ego” is connected to

“alters” who are not

connected to each other.

Ego is a “broker”.

Closure: when “ego” is

connected to “alters”

who are also connected

to each other.

Density a property of an

entire network

SH/Closure indicates how

parts of the network are

arranged

Brokerage vs. Closure: What are each good for?

• Structural holes (brokerage) and closure are each useful for different objectives:

– Structural Holes: new ideas, information, creativity, control of resource flows between different parts of the organization, personal gain (e.g. salary, promotion)

– Closure: trust, strong commitment, reinforcement of norms and culture, efficiency, group cohesion, coordination of complex tasks, mobilization

• It’s optimal to have closure within one part of a network and brokerage in another part

Network Problem

Beyond the Organization’s Informal Structure:

What is your network?Not just this. . . Closer. . .

17

Your Network

Your Network

All of your relationships with others that provide advice, access

to information, social support, and other resources.

Social Capital

All of the resources you may access through your network.

How is this different from other forms of capital

18

Your Network

19

Contact Who introduced you? To whom did you introduce this contact?

Source: Uzzi, B. & S. Dunlap (2005). "How to build a better network." Harvard Business Review, 83(12): 53-60.

Diagnose Your Network

• For homework #5, you’ll be asked to create your network and then assess it

Network Diagnosis

How much of your network is consists of those with whom you are proximate or self-similar?

– Self-similarity principle: the tendency to network with others who are similar to ourselves• Experience, background, college major, race, gender

– Proximity principle: the tendency to network with those with whom we spend the most time with• Other Olin students, those in your dorm floor

22Source: Festinger, L., S. Schachter and K. Back (1950). Social Pressures in Informal Groups; A Study of Human Factors in Housing. Palo Alto: Stanford Univ. Press.

Who became friends?

Westgate Study (1950)

It is important to EXPAND your network!

• Foci – The Shared-Activity Principle– Take part in an activit(ies) that will allow you to

generate relationships that expand the usefulness of your network (not just your number of ties)

– Consider activities that involve people you would not meet by only relying on homophily or proximity

– Find a superconnector

Summary

• Informal organizational structure is a primary determinant of how work gets done within organizations

• Network properties affect networks in important ways

• Your social capital can yield personal and career benefits