Network Theory

There has been an increasing interest in organization theory field towards network theory and methodology during the recent years. Most important journals in this field published a special issue concerning the organizational networks. Social embeddedness theory of Granovetter (1985) can be seen as a milestone for the widespread usage of social network methodology in the field of economics and management. Network research methodology has gained importance to measure the social capital of the organizations (Bordieu, 1983 and Coleman, 1988) for understanding institutional effects in an organizational field (DiMaggio and Powell, 1983; Galaskiewicz and Wasserman, 1989) and to map resource dependency relations between organizations (Pfefer and Salancik, 1978). Networks research methodology can also be used to determine some micro issues in organizations like coalition groups, cliques, social capital formation tendency of the actors. The purpose of this paper is to provide information to the potential researchers about basic aspects of social network theory, usage areas in organizational research field for analyzing social networks mostly organizations. © 2016 Elixir All rights reserved. Elixir Project Mgmt. 91 (2016) 37966-37972 Project Management Available online at www.elixirpublishers. com (Elixir International Journal) Ozgur Onday/ Elixir Project Mgmt. 91 (2016) 37966-37972 37967 center of many relationships than actual job title. Social networks also play a key role in hiring, in business success for firms, and in job performance. Social network analysis (also sometimes called network theory) has emerged as a key technique in modern sociology, anthropology, Social Psychology and organizational studies, as well as a popular topic of speculation and study. Research in a number of academic fields have showed that social networks operate on many levels, from families up to the level of nations, and play a critical role in determining the way problems are solved, organizations are run, and the degree to which individuals succeed in achieving their goals. It is necessary to take a look at these theories to understand the implication field of this alternative research methodology. Thus this paper will be looking for core principles, theories, key concepts, measures, resources, constraints and theoretical roots of the network theory to understand the implication field of this alternative research methodology namely network theory. Core Principles of the Network Theory The network approach spans a broad range of disciplines, including sociology, social psychology, mathematics, political science, communication, anthropology, economics, and epidemiology. There is no single formal statement of the network perspective in the literature. Yet, there are certain core ideas that all or most network scholars would likely endorse. Barry Wellman (1988) has identified 5 fundamental principles that provide some underlying intellectual unity to the network approach. First, behavior of people is best predicted by examining not their drives, attitudes, or demographic characteristics, but rather the web of relationships in which they are embedded. That web of relationships presents opportunities and imposes constraints on people’s behavior. If two people behave in a similar fashion, it is likely because they are situated in comparable locations in their social networks, rather than because they both belong to the same category (e.g., both are White women). Second, the focus of analysis should be the relationships between units, rather than the units themselves or their intrinsic characteristics. It is for sure that nothing can be totally understood in isolation or in a segmented fashion. Third, analytic methods must not hinge on the conventional assumption of independence. A population or sample is defined relationally rather than categorically. Therefore, interdependence among units is thought to be assumed. Fourth, understanding a social system requires more than only aggregating the dyadic ties. The flow of information and resources between two people depends not only on their relationship to each other but also their relationships to everybody else. For example, it matters whether two people who communicate with one another are embedded within a cluster of individuals who also talk to one another, versus embedded within two separate clusters that otherwise do not communicate in reality (Burt, 1992). Fifth, groups sometimes have fuzzy rather than firm boundaries. The building blocks of organizations are not discrete groups but rather overlapping networks. Individuals generally have cross-cutting relationships to a multitude of groups. Applying these five principles to small groups, a network study focuses on relationships between components in the group system—individual-to-individual ties within a group, individual-to-group ties, or group-to-environment ties—rather than on features of these component Key Concepts and Measures of the Network Theory Networks can be viewed at three analytical levels. The first is the ego network, consisting of all a node’s direct contacts. Although this is the simplest level, it can be quite informative. The second level is the overall network which includes all actors and relationships within a particular domain. If the ego network describes one’s immediate social neighborhood, the overall network describes the larger topography of a region. At the third level if the overall network describes topography, then network position identifies an actor’s coordinates within that topography. Before describing specific network measures, two general caveats should be noted that the first is the meaning of different network measures depends entirely on the nature of the relationships being mapped which can include friendship or hatred, corporate alliances or corporate lawsuits. Second, networks are often “multiplex” meaning that different kinds of relationships often overlap. Network analysts developed several useful measures; Distance: A basic measure in a network is the length of the shortest path between two actors, known as the geodesic or simply distance. A famous experiment by Stanley Milgram, that everyone and everything is six or fewer steps away, by way of introduction, from any other person in the world, so that a chain of "a friend of a friend" statements can be made to connect any two people in a maximum of six steps. It is also known as six degrees of separation. Centrality: It describes how important an actor is in a system and is the most common measure of network position. The simplest measure of centrality is degree or how man direct contacts one has. Analysts distinguish between indegree (how many ties flow toward you) and out-degree (how many ties flow outward from you). A second measure of centrality is closeness which describes how far all the other people in the network are. A third centrality measure is betweenness. This asks for how often am I on the shortest path between any two other people in a network. Another last measure of centrality is eigenvector measure that is if degree asks do I have many friends who themselves have many friends. Clustering and Structural Holes: Clustering asks in short, are your friends also friendly with each other. Thus, a network that bridges structural holes will provide network benefits that are in some degree additive, rather than overlapping. An ideal network structure has a vine and cluster structure, providing access to many different clusters and structural holes. Equivalence: Although each of us likes to believe that our situation is unique, network analysis emphasizes that many occupy similar locations in social systems. Two actors are structurally equivalent to the extent that they share the same pattern of relationships with other actors in a network. Density: While clustering refers to ties among an ego network, density describes the extent to which all actors in an overall network who might be connected really are. More formally, density is the percentage of possible relations in a network that are actually observed. Centralization: The final network level measure is centralization which captures the extent to which some actors in a system are well connected and others are not. Theoretical Roots of the Network Theory How do network scholars explain why people create, maintain, dissolve, and possibly reconstitute network ties, and Ozgur Onday/ Elixir Project Mgmt. 91 (2016) 37966-37972 37968 who is likely to form ties with whom? There are multiple schools of thought or “families of theories” (Monge & Contractor, 2003) within the network perspective that approach this question from different vantage points. Generally these include theories of self-interest, theories of social exchange or dependency, theories of mutual or collective interest, theories of social embededness and social capital. There is a large school of network researchers who come from a rational self-interest paradigm. These scholars assume that people form dyadic and group ties in order to maximize their personal preferences and desires. The rational selfinterest school within network research can be traced back to the work of sociologist James Coleman (1988). Coleman showed how, from two-actor interactions, with each actor operating out of self-interest, emerges the basis for a social system. When each actor is trying to maximize his or her individual interests, each is at the same time constrained because he or she is unconsciously embedded in an interdependent relationship with the other. That relationship causes limits on both actors’ behavior and mediates the extent of self-seeking. These limits are counterbalanced by the increased access to resources each actor gets via the other. Individuals consider the creation of ties as a personal investment in the accumulation of social resources or “social capital. ” From a selfinterest perspective, individuals expect to use this soc