The Rise and Fall of Small Worlds: Exploring the Dynamics of Social Structure

Ranjay Gulati (), Maxim Sytch () and Adam Tatarynowicz ()
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Ranjay Gulati: Harvard Business School, Harvard University, Boston, Massachusetts 02163
Maxim Sytch: Ross School of Business, University of Michigan, Ann Arbor, Michigan 48109
Adam Tatarynowicz: Department of Organization and Strategy, Tilburg University, NL-5000, LE Tilburg

Organization Science, 2012, vol. 23, issue 2, 449-471

Abstract: This paper explores the interplay between social structure and economic action by examining some of the evolutionary dynamics of an emergent network that coalesces into a small-world system. The study highlights the small-world system's evolutionary dynamics at both the macro level of the network and the micro level of an individual actor. This dual analytical lens helps establish that, in competitive and information-intensive settings, a small-world system could be a highly dynamic structure that follows an inverted U-shaped evolutionary pattern, wherein an increase in the small-worldliness of the system is followed by its later decline as a result of three factors: (1) the recursive relationship between the evolving social structure and individual actors' formation of bridging ties, which eventually homogenizes the information space and decreases actors' propensity to form bridging ties, creating a globally separated network; (2) self-containment of the small-world network, or increasing homogenization of the social system, which makes the small world less accepting of and less attractive to new actors, thereby limiting formation of bridging ties to outside clusters; and (3) fragmentation of the small-world network, or the small-world system's inability to retain current clusters. The study uses data on interorganizational tie formation in the global computer industry in the period from 1996 to 2005 to test the hypothesized relationships.

Keywords: strategic alliances networks; organization theory; economic sociology; strategy and policy (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (86)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:23:y:2012:i:2:p:449-471

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