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They make more cold calls, affiliate with more clubs, attend more social functions. Numerous books and self-help groups can assist them in "networking" their way to success by putting them in contact with a large number of potentially useful, or helpful, or likeminded people. The process is illustrated by the networks in Figure 1. The four-contact network at the left expands to sixteen contacts at the right. Relations are developed with a friend of each contact in network A, doubling the contacts to eight in network B. Snowballing through friends of friends, there are sixteen contacts in network C, and so on.

Size is a mixed blessing.

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More contacts can mean more exposure to valuable information, more likely early exposure, and more referrals. What matters is the number of nonredundant contacts. Contacts are redundant to the extent that they lead to the same people, and so provide the same information benefits. Consider two four-contact networks, one sparse, the other dense. There are no relations between the contacts in the sparse network, and strong relations between every contact in the dense network. Both networks cost whatever time and energy is required to maintain four relationships. The sparse network provides four nonredundant contacts, one for each relationship.

No single one of the contacts gets the player to the same people reached by the other contacts. In the dense network, each relationship puts the player in contact with the same people reached through the other relationships. The dense network contains only one nonredundant contact. Any three are redundant with the fourth. The sparse network provides more information benefits. It reaches information in four separate areas of social activity.

The dense network is a virtually worthless monitoring device. Because the relations between people in that network are strong, each person knows what the other people know and all will discover the same opportunities at the same time. The issue is opportunity costs. At minimum, the dense network is inefficient in the sense that it returns less diverse information for the same cost as that of the sparse network. A solution is to put more time and energy into adding nonredundant contacts to the dense network.

But time and energy are limited, which means that inefficiency translates into opportunity costs. If I take four relationships as an illustrative limit on the number of strong relations that a player can maintain, the player in the dense network is cut off from three fourths of the information provided by the sparse network. Nonredundant contacts are connected by a structural hole.

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A structural hole is a relationship of nonredundancy between two contacts. The hole is a buffer, like an insulator in an electric circuit. As a result of the hole between them, the two contacts provide network benefits that are in some degree additive rather than overlapping.

The respective empirical conditions that indicate a structural hole are cohesion and structural equivalence. Both conditions define holes by indicating where they are absent. Under the cohesion criterion, two contacts are redundant to the extent that they are connected by a strong relationship.

A strong relationship indicates the absence of a structural hole. Examples are father and son, brother and sister, husband and wife, close friends, people who have been partners for a long time, people who frequently get together for social occasions, and so on. You have easy access to both people if either is a contact. Redundancy by cohesion is illustrated at the top of Figure 1. The three contacts are connected to one another, and so provide Redundancy by Cohesion Redundancy by Structural Equivalence Figure 1.

The presumption here-routine in network analysis since Festinger, Schachter, and Back's analysis of information flowing through personal relations and Homans's theory of social groups-is that the likelihood that information will move from one person to another is proportional to the strength of their relationship. Empirically, strength has two independent dimensions: frequent contact and emotional closeness see Marsden and Hurlbert, ; Burt, b. Structural equivalence is a useful second indicator for detecting structural holes. Two people are structurally equivalent to the extent that they have the same contacts.

Regardless of the relation between structurally equivalent people, they lead to the same sources of information and so are redundant. Cohesion concerns direct connection; structural equivalence concerns indirect connection by mutual contact. Redundancy by structural equivalence is illustrated at the bottom of Figure 1.

The three contacts have no direct ties with one another. They are nonredundant by cohesion. But each leads you to the same cluster of more distant players. The information that comes to them, and the people to whom they send information, are redundant. Both networks in Figure 1. The indicators are neither absolute nor independent. Relations deemed strong are only strong relative to others. They are our strongest relations. Structural equivalence rarely reaches the extreme of complete equivalence.

People are more or less structurally equivalent.

Structural Holes: The Social Structure of Competition

In addition, the criteria are correlated. People who spend a lot of time with the same other people often get to know one another. The mutual contacts responsible for structural equivalence set a stage for the direct connection of cohesion. The empirical conditions between two players will be a messy combination of cohesion and structural equivalence, present to varying degrees, at varying levels of correlation.

Cohesion is the more certain indicator. If two people are connected with the same people in a player's network making them redundant by structural equivalence , they can still be connected with different people beyond the network making them nonredundant. But if they meet frequently and feel close to one another, then they are likely to communicate and probably have contacts in common.

More generally, and especially for field work informed by attention to network benefits, the general guide is the definition of a structural hole.

There is a structural hole between two people who provide nonredundant network benefits. If the cohesion and structural equivalence conditions are considered together, redundancy is most likely between structurally equivalent people connected by 20 Structural Holes a strong relationship. Redundancy is unlikely, indicating a structural hole, between total strangers in distant groups.

I will return to this issue again, to discuss the depth of a hole, after control benefits have been introduced. The number of structural holes can be expected to increase with network size, but the holes are the key to information benefits. The optimized network has two design principles.

Structural Holes: The Social Structure of Competition

Efficiency The first design principle of an optimized network concerns efficiency: Maximize the number of nonredundant contacts in the network to maximize the yield in structural holes per contact. There is little gain from a new contact redundant with existing contacts. Time and energy would be better spent cultivating a new contact to unreached people.

These reach the same people reached by the networks in Figure 1. What expands in Figure 1. Network A provides four nonredundant contacts. Network B provides the same number. The information benefits provided by the initial four contacts are redundant with benefits provided by their close friends. All that has changed is the doubled number of relationships maintained in the network.

The situation deteriorates even further with the sixteen contacts in network C.

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There are still only four! With a little network surgery, the sixteen contacts can be maintained at a fourth of the cost. As illustrated in Figure 1. Concentrate on maintaining the primary contact, and allow direct relationships with others in the cluster to weaken into indirect relations through the primary contact.

These players reached indirectly are secondary contacts. Among the redundant contacts in a cluster, the primary contact should be the one most easily maintained and most likely to honor an interpersonal debt to you in particular. The secondary contacts are less easily maintained or less likely to work for you even if they might work well for someone else. The critical decision obviously lies in selecting the right person to be a primary contact.

The importance of trust has already been discussed. With a trustworthy primary contact, there is little loss in information benefits from the cluster and a gain in the reduced effort needed to maintain the cluster in the network. Repeating this operation for each cluster in the network recovers effort that would otherwise be spent maintaining redundant contacts. By reinvesting that saved time and effort in developing primary contacts to new clusters, the network expands to include an exponentially larger number of contacts while expanding contact diversity.

The sixteen contacts in network C of Figure 1.

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Some portion of the time spent maintaining the redundant other twelve contacts can be reallocated to expanding the network to include new clusters.