SOCIAL CAPITAL

1
SOCIAL CAPITAL
Social Capital Resources accruing to an ego
actor through direct indirect relations with
its alters that facilitate egos 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
subordinates 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 1990302).
• at once the resources contacts hold and the
  structure of contacts in the network (Burt
  199212)
• corporate social capital (CSC) of firms and
  their members (Leenders Gabbay 199910)

2
The STRENGTH of WEAK TIES
Mark Granovetters (1973) classic article on
finding a job argued that weak-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
circles expectations (folkish society) ? Weak
relations (acquaintances, coworkers) serve as
bridges to other social groupings having
information resources unavailable within ones
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 egos
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 Granovetters
claim that weak ties are more useful because they
give actors access to nonredundant information
Modified after Burt (200133)
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
  As, extracts commission
• Ego cant fill any hole between As
• Indeed, maintaining ties to both As 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 (2001237)
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.
Number of nonredundant contacts effective size
of is 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 is direct contacts.
Thus, effective size of is network is
Redundant contact is connected with others
q
piq
mjq
?
EGOi
j
?
?
piq portion of is investment in q mjq
marginal strength of j-q tie
7
and Constraint
Network constrains egos 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 is 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) youve 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 199254).
8
HOLE SIGNATURE
Each network actor has a characteristic hole
signature, whose pattern reveals the distribution
of opportunities and constraints across
relationships in the players network (Burt
199265-71).
Time Energy Allocation (pij)
Ego is allocation (investment) in five alters
(pij sums to 1.00) Constraints (cij) on
entrepreneurial activities (few structural holes
when close to investment line) Hole signature is
the unconstrained portion of Egos 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 (199266)
9
LINs SOCIAL CAPITAL THEORY
Nan Lins 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 (200159).

• Core social capital propositions
• Success of an action is positively associated
  with social capital
• Better the origin position, more likely to
  access and use better SC
• Stronger the tie, greater SC positive effect on
  expressive action success
• Weaker the tie, greater access to better SC for
  instrumental action
• Proximity to a network bridge, better SC access
  for instrumental action
• Location strength contingent on resource
  differential across a bridge
• Networking effects constrained by nearness to 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 is social capital from the J alters in
its ego-network pji egos perceived probability
of access to use alter js 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?
R14
p1.8
p4.5
R46
p1.5
p4.8
R27
EGO
p1.2
R53
p1.2
R35
p1.8
R69
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
781360-1380. 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.