Social Networks and Organizational Performance

Abstract

The relationship between social networks and organizational performance has been extensively discussed in the sociology, economics, and business literature since the early 1990s. The main tenets of social network theory rest on the assumption that social networks perform an important role in procuring various assets, both tangible and intangible, to organizations and are helpful in leveraging the productivity of a firm's existing resource base. Social ties have been shown to play an important role in influencing organizational actions, outcomes, and performance. The underlying logic can be applied to various aspects of economic action and at different levels of analysis. In consequence, there are many theoretical, definitional, and directional interpretations of the relationship between social networks and organizational performance, and this leads to a wide variety in findings as to the nature and the strength of the association.