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Lecture 20

SOC483Y1 Lecture Notes - Lecture 20: Georg Simmel, Mark Granovetter, Environmental Factor

Course Code
Vanina Leschziner

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SOC483Y1- Lecture 20 March 21
- Structural holes do everything good, message of most Burt articles, including encourage
- Burt argues it is not just about specific ideas,
he argues you get practice in seeing
things from different angles
and you are exposed to different technologies
all this stuff is in your head, some can come together to make a new idea
- Burt’s study- to figure out they are good for coming up with good ideas, he asked
people what their networks were, and asked what their best idea was for improving the
supply chain. He took ideas and had managers rate how good the ideas were. He
discovered people with more structural holes have better rated ideas. There is a little bit
of a cheat though, according to Marin… he told the managers “rate these ideas” and
operationalizes them: and Burt said a good idea is one that will have broad
application/implications (affect not just one part of supply chain) his definition limits
what you can say good is… if it affects a lot of different people it is a better idea and
behold those who have most contacts = better idea- Marin said it is biased
- Unit of analysis: the person
- Networks are contexts for action
4 levels of brokerage
1. Simplest- make people on both sides of a structural hole aware of interests and
difficulties in the other group. Those that communicate these issues between groups are
important because so much conflict results from misunderstandings
2. Transferring best practice
3. To draw analogies between groups ostensibly irrelevant to one another
4. Synthesis (pg. 8) likely to see new beliefs by combining elements
Aggregate level- technological change
Higher company performance when top managers have boundary-spanning relationships
beyond their firm
More innovation, creativity good to establish alliances with firms outside their own area
Brokerage increases the risk of having a good idea
Ex. From managers running supply chain for one of America’s largest celectronic companies
Dense network- talked a lot to one another directly
Hierarchical network shared information indirectly via a central contact
Company rewards brokerage
Incentives pg. 22 Job evaluation, promotion, salary
There is a vision advantage associated with brokerage

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Analyzed archival and survey data on many managers in a large company
Many opportunities for brokerage and managers were rewarded for brokerage in the sense that
compensation, positive performance evaluations and promotions were given to managers who
brokered connections across structural holes
Brokerage can be associated with good ideas
Managers whose networks spanned structural holes were more likely to express and idea and to
discuss it with colleagues, have the idea engaged by senior management and have it judged
Results have implications for creativity and reproduction of social structures in which ideas
- Distinguish exceptional from mundane
- Creator = great intellectual identity, fresh perspective, productive way of thinking,
creative personality or some other quality that enabled him or her to generate good idea
o Youth factors
o Environmental factor of a new generation less invested in or blinded by the
prevailing paradigm
o The brokerage value of an idea resides in a situation in the transaction through
which an idea is delivered to an audience, not In the source of the idea nor in
the idea itself
o What matters is not the source of an idea but rather what matters is the value
produced by the idea
o Across the clusters in an organization or market, creativity is a diffusion process
of repeated discovery in which a good idea is carried across structural holes to
be discovered in one cluster of people, resdiscovered in another then
rediscovered in still others
o Value accumulates as an idea moves through the social structure, each
transmission from on group to another has the potential to add value. Thus there
is an incentive to define work situations such that people are forced to engage
diverse ideas. That incentive underlies the rhone-pulenc quote on managing le
- Structural reproduction
o Brokerage is discussed as an engine for productive change
o Organizations and markets are viewed as with beliefs and behaviors, knowledge
and practice, homogenous within cultures relative to the heterogeneity between
o Brokerage brings market price into focus and price is a criterion for coordinating
people whose knowledge is necessarily limited by time and place

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- Brokerage opportunities were abundant visible and rewarded, but apparently irrelevant
(does this mean that the value is in the idea not the person)
- There should be an integrated supply chain rather than the organization riddled with
structural holes
- There is evidence of structural reproduction- BROKERAGE: A MECHANISM FOR CHANGE
AND VALUE CREATION prevalent and rewarded in a fragmented static organization
- There are positive and negative cycles to the reproduction: negative cycle is clear from
the managers surrounded by densely interconnected discussion partners (high network
constraint) likely to have their ideas dismissed by senior of have ideas seen as low so
they learn not to express ideas. They obey the maxim
- The positive cycle is less obvious= managers whose networks spanned structural holes
(low network constraint) were likely to express and discuss their ideas, likely to have
ideas engaged by senior management and likely to have ideas perceived as valuable.
These managers continue to propose ideas.
The more a contact is connected with others in a manger’s network, the higher the constraint
score for the contact
Good ideas discussed to display competence and to entertain familiar colleagues
Little evidence for managers to act on ideas
People holding more senior rank were more likely to act on their ideas but the association
appears when network constraint is held constant showing action was less a function of rank
than connections to other groups
Good ideas emerged as hypothesized from the intersection of social worlds, but spread in the
organization studies here in a way that would continue segregation between the worlds. There
was a brokerage advantage in producing ideas and company systems were working correctly to
reward brokers who produced good ideas. However the potential value for integrating
operations across the company was dissipated in the distribution of ideas.
Burt’s – empirical evidence
- Close to a hole means going into another group with different forms of behaviors that
encourage innovation
- People that have connections that span groups are more familiar with alternative ways
of thinking and can select from that may apply to different areas, may synthesis
- connections with alternative ways of thinking
- good ideas what people praise and value as such import/export business- not
substance but importing exporting ideas to other groups
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