SOCIAL CAPITAL

1. SOCIAL CAPITAL Social Capital Resources accruing to an ego actor through direct & indirect relations with its alters that facilitate ego’s attainment of its expressive or instrumental goals Social liabilities The “dark side” of social capital: constraints or obligations that hinder actions and goal attainment - Ties to an inept team leader block her subordinate’s promotion - Obligations to visit in-laws thwart your plans to see the Big Game • Diverse conceptualizations of social capital: • “inheres in the structure of relations between persons and among persons” (Coleman 1990:302). • “at once the resources contacts hold and the structure of contacts in the network” (Burt 1992:12) • “corporate social capital” (CSC) of firms and their members (Leenders & Gabbay 1999:10)

2. The STRENGTH of WEAK TIES Mark Granovetter’s (1973) classic article on finding a job argued thatweak-tie relations(casual, indirect) give actors better access to new information and opportunities. But,strong ties(emotionally intense, frequent, direct) restrict the flow of new information from diverse, distant sources. ► Intimates (kin, close friends) widely share same knowledge, norms, beliefs ► Although strong ties offer beneficial social support (“haven in a heartless world”), they also result in impacted information & coercive conformity to the social circle’s expectations (folkish society) ► Weak relations (acquaintances, coworkers) serve as bridges to other social groupings having information & resources unavailable within one’s intimate social circle; provide opportunities of individual autonomy via unique structural location [Simmelian cross-cutting] ► Persons with many weak ties can gain speedy advantages in learning about, and cashing in on, new opportunities ► Irony that weak ties actually provide stronger form of social capital for career advancement, financial dealings, conference invitations

3. CLOSURE vs. STRUCTURAL HOLES James Coleman: High trust in communities with full closure networks (i.e., a graph “strong component”), whose strong ties foster mutual assistance obligations & socially control deviant behaviors (e.g., of children) Ronald Burt: Ego gains numerous competitive advantages and higher investment returns if ego’s weak, direct-tie relations span structural holes, thus serving as bridge between its alters Holes create social capital via brokerage opportunities ► Ego actor gains earlier access to flows of valuable information ► Ego fills structural holes by forging new ties linking its unconnected alters, extract “commission” or “fee” for providing brokerage services ► Low network constraints result in high performance rewards ► Ego maximizes its self-interests by controlling & exploiting information, playing one actor against another (“tertius gaudens”)

4. Who Has Greater Information & Control Benefits? B 1 A 3 2 7 James C Robert 6 4 5 S-hole is the mechanism underlying Granovetter’s claim that weak ties are more useful because they give actors access to nonredundant information Modified after Burt (2001:33)

5. Structural Holes in an Ego-Centric Net To gain information and control benefits from structural holes, players must identify bridging / brokering opportunities and fill in those gaps • A typical office-politics situation: • Ego fills a structural hole between B and both A’s, extracts commission • Ego can’t fill any hole between A’s • Indeed, maintaining ties to both A’s is redundant (and costly) • If Ego cuts a tie to one A, where should it invest time & energy forging a new tie that will maximize its entrepreneurial opportunities? SOURCE: Knoke (2001:237)

6. Two S-Hole Measures: Nonredundancy … Ability to develop a structural hole decreases in proportion to strength of direct and indirect ties between alters in an ego-centric network.Network is nonredundant if it has numerous ties to diverse social worlds. Info access, timing, or referrals from alter j are redundant if ego has contact with alter q who is also strongly tied to j. Redundant contact is connected with others: Number of nonredundant contacts = effective size of i’s ego-centric network Find level of redundancy between ego and specific alter j involving 3rd actors q; subtract from 1; then aggregate across all of i’s direct contacts. Thus, effective size of i’s network is : q piq mjq ● EGOi j ● ● piq = portion of i’s investment in q mjq = marginal strength of j-q tie

7. … and Constraint Network constrains ego’s entrepreneurial opportunities when an alter q, in whom ego has heavily invested, itself has invested heavily in alter j. Find constraint on ego i by aggregating all indirect investments (2-step paths) through third parties (q) and add this sum to i’s direct proportional investment in j. Squaring defines constraint as a measure of the lack of primary structural holes around j: Constraint contact also has the dependence of others: q piq pqj ● pij EGOi j ● ● “Contact j constrains your entrepreneurial opportunities to the extent that: (a) you’ve made a large investment of time and energy to reach j, and (b) j is surrounded by few structural holes with which you could negotiate to get a favorable return on the investment” (Burt 1992:54).

8. HOLE SIGNATURE Each network actor has a characteristic hole signature, whose pattern reveals the distribution of opportunities and constraints across relationships in the player’s network (Burt 1992:65-71). Time & Energy Allocation (pij) Ego i’s allocation (investment) in five alters (pijsums to 1.00) Constraints (cij) on entrepreneurial activities (few structural holes when close to investment line) Hole signature is the unconstrained portion of Ego’s total investment (shaded area). “… provides a quick visual impression of the volume and locations of opportunity and constraint in a network” (p. 67) Proportion Constraint (cij) D C A B E SOURCE: Burt (1992:66)

9. LIN’s SOCIAL CAPITAL THEORY Nan Lin’s general theory of social capital comprises a set of propositions, applicable under scope conditions for pyramidal status structures (actors in higher positions control more capital) and actions that “evoke other actors as intermediaries” (2001:59). • Core social capital propositions: • Success of an actionis positively associated with social capital • Better the origin position, more likely to access and use“better” SC • Stronger the tie, greater SC positive effect onexpressive actionsuccess • Weaker the tie, greater access to better SC forinstrumental action • Proximity to anetwork bridge, better SC access for instrumental action • Location strengthcontingent on resource differential across a bridge • Networking effectsconstrained by nearnessto top or bottom of hierarchy

10. MOBILIZING SOCIAL CAPITAL Job-seekers, entrepreneurs, work teams try to deploy their network ties to acquire the use of resources held by their alters. But, they may not always succeed in gaining access. Johnson & Knoke (2005) argued that volume of social capital to which ego actually has access is the aggregate of resources that ego could probably mobilize from its alters: SCi= ego i’s social capital from the J alters in its ego-network pji= ego’s perceived probability of access to use alter j’s resources Rj = total resources controlled by alter j that could be useful to ego i • Find a simultaneous equation solution for all J actors in the system • Create plausible quantitative measures of the two variables • Identify network and environmental conditions that change the probabilities of resources flowing across the links from alters to ego

11. How much SocCap could EGO mobilize? R1=4 p1=.8 p4=.5 R4=6 p1=.5 p4=.8 EGO R2=7 p1=.2 R5=3 p1=.2 R3=5 p1=.8 R6=9

12. References Burt, Ronald S. 1992. Structural Holes: The Social Structure of Competition. Cambridge, MA: Harvard University Press. Burt, Ronald S. 2001. “Structural Holes versus Network Closure as Social Capital.” Pp. 31-56 in Social Capital: Theory and Research, edited by Nan Lin, Karen S. Cook, and Ronald S. Burt. New York: Aldine de Gruyter. Coleman, James S. 1990. “Social Capital.” Pp. 300-321 in Foundations of Social Theory. Cambridge, MA: Harvard University Press. Granovetter, Mark. 1973. “The Strength of Weak Ties.” American Journal of Sociology 78:1360-1380. Knoke, David. 2001. Changing Organizations: Business Networks in the New Political Economy. Boulder, CO: Westview. Johnson, LuAnne R. and David Knoke. 2004. “’Skonk Works Here’: Activating Network Social Capital in Complex Collaborations.” Forthcoming in Advances in Interdisciplinary Studies of Work Teams. Leenders, Roger Th. A. J. and Shaul M. Gabbay (eds.). 1999. Corporate Social Capital and Liability. Boston: Kluwer Academic Publishers. Lin, Nan. 2001. Social Capital: A Theory of Social Structure and Action. New York: Cambridge University Press.