Structural Holes: Social Structure of Competition

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The theory relies on a fundamental idea that the homogeneity of information, new ideas, and behavior is generally higher within any group of people as compared to that in between two groups of people. In particular, the position of a bridge between distinct groups allows him or her to transfer or gatekeep valuable information from one group to another. If we compare two nodes, node A is more likely to get novel information than node B, even though they have the same number of links. This is so because nodes connected to B are also highly connected between each other.

Therefore, any information that any of them could get from B, it could easily get from other nodes as well. Furthermore, the information, which B gets from different connections, is likely to be overlapping, so connections involving node B are said to be redundant. Thus, node A is likely to receive some nonredundant information from its contacts. As a result of the hole between two contacts, they provide network benefits to the third party to node A.

Bridge count is simple and intuitive measure of structural holes in a network. Bridge is defined as a relation between two individuals if there is no indirect connection between them through mutual contacts. He aims to estimate to what extent contact j is redundant with other contacts of node i. Redundancy is understood as an investment of time and energy in a relationship with another node q , with whom node j is strongly connected.

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The redundancy in network is calculated by summing up this product across all nodes q. One minus this expression expresses the nonredundant portion of relationship. The more each node is disconnected from other primary contacts, the higher the effective size would be. This indicator varies from 1 network only provides a single link to the total number of links N each contact is nonredundant.

Borgatti developed a simplified formula to calculate effective size for unweighted networks. Where t is the number of the total ties in the egocentric network excluding those ties to the ego and n is the number of total nodes in the egocentric network excluding the ego. This formula can be modified to calculate the effective size of the ego's network. This indicator measures the extent to which time and energy is concentrated within a single cluster.

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It consists of two components: It depends on three network characteristics: Constraint on an individual would be generally higher in case of a small network he or she has just few contacts , and if contacts are highly connected between each other either directly as in a dense network, or indirectly, through the mutual central contact as in a hierarchical network.

When the two are connect Ronald Burt describes the social structural theory of competition that has developed through the last two decades.

Structural holes

When the two are connected through a third individual as entrepreneur, the gap is filled, creating important advantages for the entrepreneur. Competitive advantage is a matter of access to structural holes in relation to market transactions. Paperback , pages. To see what your friends thought of this book, please sign up.

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Structural Holes

Lists with This Book. This book is not yet featured on Listopia. Structural holes are the network gaps or chasms between entities. By brokering relationships between these disparate entities, some players are able to manipulate the structural holes to their individual benefit, which aggregates from the micro level of the individual to the macro level of the group or organization.

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The end result is timelier access to information and network referrals than the competition. Burt brilliantly explains the mechanics behind this social phenomenon and supports his theory significantly with much analysis and case study.

A great read for anyone wanting to understand how social capital is built and used for benefit. Mar 19, Arjun rated it really liked it Shelves: Social Network theory is interesting but suffers from a major chicken and egg problem.

That is, am I powerful because I am in the middle of my social network or is it my inherent power that got me there? How do we separate those effects?

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For those of you who are interested but want a formal treatment, read Matt Jackson's graph theoretic approach to this work in Economics. For people with better things to do, just read it and don't think to much about it. Aug 01, Jenn rated it it was amazing Shelves: If you enjoy this primer on social networks, I can send you on your merry way with much much more. View all 3 comments. Kamran Razvan rated it it was amazing Nov 29, Oscarcs rated it really liked it Nov 23, Blyden rated it it was ok Aug 14, Melissa rated it liked it Aug 19, Mitch rated it liked it Aug 19, John Hampson rated it it was amazing May 28, Marcin rated it really liked it Dec 26, Mile Milisavljevic rated it it was amazing Sep 12, Neli Maria Mengalli rated it it was amazing Oct 13, John rated it really liked it Jan 25,

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