Structural Holes And Online Social Networks

ByRobert don

A few weeks ago I wrote about the theory of Social Capital, and how that can be applied to online social networks (see end of article for link). Today I want to talk about a related theory called Structural Hole Theory, and explain what implications this theory can have for online social networks like Facebook and MySpace. First, a little background…

Structural Holes Defined

Ronald Burt’s theory of ‘structural holes’ is an important extension of social network theory. This theory aims to explain “how competition works when players have established relations with others” (Burt, 1992), and argues that networks provide two types of benefits:

 

  • Information benefits refer to who knows about relevant information and how fast they find out about it. Actors with strong networks will generally know more about relevant subjects, and they will also know about it faster. According to Burt (1992), “players with a network optimally structured to provide these benefits enjoy higher rates of return to their investments, because such players know about, and have a hand in, more rewarding opportunities”.
  • Control benefits refer to the advantages of being an important player in a well-connected network. In a large network, central players have more bargaining power than other players, which also means that they can, to a large extent, control many of the information flows within the network.

 

Burt’s theory of structural holes aims to enhance these benefits to their full potential. A structural hole is “a separation between non-redundant contacts” (Burt, 1992). The holes between non-redundant contacts provide opportunities that can enhance both the control benefits and the information benefits of networks.

Optimizing the benefits of networks

I will now look at how structural holes can facilitate the optimization of information benefits and control benefits. There are several ways to optimize structural holes in a network to ensure maximum information benefits:

 

  • The size of the network. The size of a network determines the amount of information that is shared within the network. A person has a much better chance to receive timely, relevant information in a big network than in a small one. The size of the network is, however, not dependent merely on the number of actors in the network, but the number of non-redundant actors. The utility of a network with reference to its size can be described by a function know as Metcalfe’s Law. Robert Metcalfe observed that new technologies are valuable only if many people use them. Specifically, the usefulness, or utility of the network equals the square of the number of users. The more people use a piece of software, a network, a particular standard, a game, or a book, the more valuable it becomes and the more new users it will attract, increasing both the utility and the speed of its adoption by still more users.
  • Efficient networks. Efficiency in a network is concerned with maximizing the number of non-redundant contacts in a network in order to maximize the number of structural holes per actor in the network. It is possible to eliminate redundant contacts by linking only with a primary actor in each redundant cluster. This saves time and effort that would normally have been spent on maintaining redundant contacts.
  • Effective networks. Effectiveness in a network is concerned with “distinguishing primary from secondary contacts in order to focus resources on preserving primary contacts” (Burt, 1992:21). Building an effective network means building relationships with actors that lead to the maximum number of other secondary actors, while still being non-redundant.SMM Panel Pakistan