WANTED: A Good Network Theory of Organization

Gerald R. Salancik Carnegie Mellon University Network analysis corrects a tendency in organizational theory to focus on the trees rather than the forest, on the actions of individual organizations rather than on the organization of their actions. Since it is fitting that organizational theory address organization, the reviews of Ronald Burt's book Structural Holes by David Krackhardt and Steven Andrews offer an opportunity for reflecting on the promise of social network analysis for organizational theory. Much of its promise has yet to be realized, in that social network analysis has been used mainly as a tool for analyzing data about organizations rather than for understanding organizations per se. Thus we know that personal interaction patterns in organizations are associated with power, turnover, information flows, attitudes, promotion opportunities, and social support. Beyond a single organization, we know that firms cluster because of their involvements on each other's boards and that such clusters relate to community influence, to corporate giving, to the adoption of defenses against corporate takeovers, or to the prices firms pay when acquiring other firms. We know also that network positions are related to power and that the structure of resource dependence relations shadows how firms conform to the demands of other firms or how they extract profits from one another.