Main Review Social Network Analysis in Decision Making

A research project supported by the European Commission FP5: Energy, Environment and Sustainable Development Key Action 4: City of Tomorrow and Cultural Heritage Thematic Priority 4.1.2: Improving the quality of urban life Contract No: EVK4-2002-0095 www.watertime.org watertime@watertime.org Social Network Analysis in Decision Making: a literature review Author: Institution: Date: Vladimir Popov PSIRU 31/03/2003 Work Package: Deliverable no.: Social Network Analysis What is known as Social Network Analysis is a set of methods for the analysis of social structures, methods which are specifically geared towards an investigation of the relational aspects of these structures (Scott, 1991, 39) Consequently, the techniques of social network analysis are specifically designed to explore relational data rather than attributive one The difference between social network analysis and conventional methods, which also can be used to describe social structures, is that rather than focusing on attributes of the actors involved, social network analysis explores the structure of connections of the actors In other words, the actors are not described by their attributes but by their relations, which are seen by social network analysis as fundamental as the actors themselves The major units of social network analysis are nodes and links between them Nodes may represent various entities For example, people, firms, organisations Links represent relations between nodes Department of Sociology teaches the course at the University of California, Riverside, Introduction to Social Network Analysis) WaterTime partners: PSIRU, School of Computing and Maths, University of Greenwich, UK ERL, Universidad Complutense de Madrid, Spain Tampere Institute of Environmental Engineering and Biotechnology (IEEB), Finland International Water Affairs, Hamburg, Germany Nomisma, Bologna, Italy tvưs József College, Hungary Coordinator: PSIRU, CMS (M257), University of Greenwich, Park Row, London SE10 9LS, U.K www.watertime.org Social Network Analysis appeared about half a century ago Its mainstream was developed by sociometric analysts, by the researchers from Harvard who modified some techniques of graph theory and anthropologists from Manchester who used these developments to investigate the structure of community relations Central concepts of social network analysis are those of centrality, density, components, cliques, and distances Since its appearance, social network analysis has been used for many anthropological, social, business, political and managerial research For the most part, it has been used for describing social structure, for example in studies by Bavelas, Burt, 4, Freeman5, Levitt,6 Tichy, Tushman, and Fombrun.7 It is impossible to numerate all other applications of this method: It was used for studying international communication, political and cognitive networks, for research on social capital Social network analysis helped to understand the role of kinship and to estimate the impact on social structure on getting job Social network analysis has been used for communication and informational studies For example, Burkhardt and Brass estimated organizational impacts of a new information technology They showed that a new technology changes social structure and raise the status of those able to deal with the uncertainty which frequently caused by innovations.8 Rice and Aydin found that social structure, especially positional and relational proximity, has an impact on attitudes towards an information system Social Network Analysis has also been used for researching corporate networks It is possible to note some dimensions of these research First of them is concerned with Scott, J., Social Network Analysis, A Handbook, Sage Publications, 1991,p.7 Bavelas, A., "Communication Patterns in Task-Oriented Groups", Journal of the Acoustical Society of America, Vol 22, 1950, pp 725-730 Burt, R S., "Models of Network Structure", Annual Review of Sociology, Vol 6, 1980, pp 79-141 Freeman, L C., "Social Networks and the Structure Experiment", Chapter in Research Methods in Social Network Analysis, L C Freeman et al (eds.), George Mason University Press, Fairfax, 1989 Leavitt, H J., "Some Effects of Certain Communication Patterns on Group Performance", Journal of Abnormal and Social Psychology, Vol 46, 1951 Pp 38-50 Tichy, N M., M L Tushman, and C Fombrun, "Social Network Analysis for Organizations", Academy of Management Review, Vol 4, No 4, 1979, pp 507-519 Burkhardt, M E and D J Brass, "Changing Patterns or Patterns of Change: the Effects of a Change in Technology on social Network Structure and Power", Administrative Science Quarterly, vol 35, No., 1, 1990, pp 104 Rice, R E and C Aydin, "Attitudes toward New Organizational Technology: Network Proximity As a Mechanism for Social Information Processing", Administrative Science Quarterly, Vol 36, 1991, pp 219-244 18/10/2022 Page www.watertime.org interlocking directorship and its effects Carroll, Fox, Ornstein10, Sonquist, Koenig 11, Burt, Christman, Kilburn12 explored various aspects of joint membership in several director boards and its impact on the performance of the corporations Second dimension underlined the importance of the structure of ties between enterprises and banks 13 It was shown that ties with banks and financial bodies are crucial for the start and performance of the firms Use of Social Network Analysis in Decision Making Research Social network analysis has also been used for studies on decision making This dimension is one of the least explored yet The most apparent reason of this is the fact that most of the research on decision making are rather qualitative studies and normally need not use of statistical techniques which are the core of social network analysis Nevertheless, it is possible to note several dimension First of them is concerned with the study of the impact of social structure on social decisions In this regard, Laumann and Pappi`s book “Networks of Collective Action: A Perspective on Community Influence Systems should be noted Laumann and Franz Pappi have analysed the structure and functioning of the decision making system They assessed the social structure, find community decision making elite, and examine its interaction with the community Also, Laumann and Pappi have reviewed resources of community influence However, social network analysis used primarily as a mean of analysing social structure that the process of decision making itself 14 Some anthropological studies have also used social network analysis for study of decision making in human communities These studies explore the human behaviour within the constraints imposed by the social structure Let us note the approach suggested by Foster and Seidman fifteen years ago Foster and Seidman focused on the aspects of individual behaviour to a greater extent than it had been done in the previous 10 William Carroll, John Fox and Michael Ornstein, The Network of Directorate Interlocks among the Largest Canadian Firms, Downsview, Ontario: Institute for Behavioral Research, York University, 1977 11 Sonquist S.A., Koenig T (1975), “Interlocking Directorships in the Top US corporations” , Insurgent Sociologist, 12 Burt, R.S., Christman K.p , Kilburn., H.C., (1981) “Testing a structural theory of corporate cooperation: Interlocking Direcotrate Ties as a Strategy for Avoiding Market Constrains on profit” , American Sociology Review, 45 13 Levine Joel, The sphere of Influence, 1972 14 Edward O Laumann and Franz U Pappi, Networks of Collective Action, A Perspective on Community Influence Systems, Academic Press, 1976 18/10/2022 Page www.watertime.org anthropological studies It was achieved by incorporating some elements of anthropological decision making theory Foster and Seidman suggested a set of procedures which create a new network “which is the outcome of each individual’s “social decisions” – that is the outcome of a set a set of “choices” by each individual in the population The decisions are conceived as the end product of a procedure which processes information on the attributes of the individuals and on the structure of existing social networks.15 While the previous study heavily relied on social attributes, there are a few studies which in a greater extent focus on the impact of relational aspects on the process of decision making For example, Christofer Edling and Rickard Sandell explored a case of decision making in Stockholm Stock Exchange about transferring from the Exchange's primary-list to the Exchange's secondary list due to a new tax policy Their study has showed that the decisions regarding transferring firm from the primary to a secondary list of the Stockholm Stock Exchange depended on their social embeddedness in terms of board interlocks.16 Edling and Sandell represented the transfer decisions as a continuous stochastic process by utilizing event-history techniques and conclude that a disregard to social interdependencies at the micro level would blur some of the most important forces which influence strategic decision making Cheryl Cott used social network analysis in order to describe the structure of multidisciplinary long-term care teams of 93 health care workers and identified the pattern of their relationships about their work She found the existence of two sub-teams: a multiprofessional sub-team and a nursing sub-team Cott showed that the multiprofessional sub-team was involved in teamwork that involves decision-making and problem-solving, while the nursing sub-team was generally involved in task oriented work.17 There have been a number of further studies in this respect, for example Mark S Mizruchi and Blyden B.Potts`s research on the location of decision making power in influence networks, 18 and Stacy Wolski`s research on the impact of network positions on 15 Foster and Seidman, 1992, 52 Christofer Edling and Rickard Sandell, Social Influence and Corporate Behaviour, A Case Study of Interdependent Decision Making in Sweded`s Publicity Traded Firms, in European Sociological Review V 17 N4, December 2001 pp 389-399(11) 17 Cheryl Cott, "We decide, you carry it out": a social network analysis of multidisciplinary long-term care teams , Social Science & Medicine Volume 45, Issue 9, November 1997, Pages 1411-1421 18 Mark S Mizruchi and Blyden B.Potts, The Location of Decisional Power in Influence Networks, The paper was presented on the Sunbelt Conference on Social Network Analysis in 1999 16 18/10/2022 Page www.watertime.org how people make decisions In this study Wolski tested Firedkin`s theory of social influence.19 Exchange theory has also been used in some studies involving social network analysis and decision making M.A.L.M van Assen, Stokman, and Willer explored exchange of public goods and developed an exchange model based on exchangeresistance theory, game theory, and the exchange model of Coleman They used this model in order to study a case in European Community decision making and showed that the power or resource distribution is different for dissimilar network structures and for different types of exchange 20 The second dimension of the use of social network analysis for decision making research includes applying some SNA techniques for the study the pattern of decision making itself It is possible to because the process of decision making can be represented by the network of interactions between the actors involved in the process This dimension is a mix of communication, policy network studies and status visualization techniques For example, Ulrik Branes, Jörg Raab, Dorothea Wagner used this approach in their study of the privatisation in East Germany 21 They studied the privatization of the shipbuilding industry and of a major steel plant EKO Stahl AG The study aimed to find what kind of policy making structures evolved during the decision processes and how powerful are the actors' positions in these networks The researchers identified the actors who could make an impact on decisions on the privatization in these cases, such as the European Commission, the federal ministries of finance and economics, parties within the state parliament, the board of directors and the supervisory board of the Treuhandanstalt, the local governments with enterprise sites, the metal workers' union, competitors in West Germany among others Status visualisation was used in order to help to analyse the two types of ties which were identified as significant for policy making in these cases, namely `obligation of report' and `consideration of interest' One of their diagrams is shown in Figure 19 Stacy Wolski, Does network position influence how people make decisions? A test of Firedkin`s social influence network theory, The paper was presented on the Sunbelt Conference in 2002 20 M.A.L.M van Assen, F.N Stokman, D Willer, Exchange in Collective Decision Making: Applying Network Exchange Theory and Game Theory 21 ) , Ulrik Brandes, Jörg Raab, Dorothea Wagner, “Exploratory Network Visualization:Simultaneous Display of Actor Status and Connections” , Journal of Social Structure 2(4) (October 19, 2001 18/10/2022 Page www.watertime.org consideration of interest Figure Status visualizations of the privatisation of steel industry in Germany Another study which can be noted in regard with decision making is a study in a financial services company in Los Angeles It happened that morale and productivity of one of the key departments of this company started to decline despite good salary and good working skills of its personnel Then the Human Resources Vice President of this company invited an expert in social network analysis to find out what is going on The expert explored the data on work relationships and discovered that the department manager was a bottleneck in the work flow 22 Finally, we would like to note a number of dimensions which are adjacent to the use of social network analysis in decision making studies Jacek Malczewski noted some possible application of social network analysis in his book on the use of geographical 22 is noted by Valdis Krebs, 1999 18/10/2022 Page www.watertime.org information systems for multicriteria decision analysis He drew attention that networks can be analysed in geographical information systems The networks can be stored in the vectors GIS and analysed in ArcView/ Network Analysis or TransCAD , the vector based GIS systems 23 He believes that TransCAD allows researchers to integrate many spatial decision problems on networks with the GIS capabilities Another approach which can be noted in respect to decision making studies is so called network approach Elke Khrmann in his study showed the advantages of using network approach (which is not social network analysis, strictly speaking) for the research of decision making in foreign policy He developed this approach in a multilevel theory of foreign policy decision making, which includes national, translational and international levels of analysis and showed how networks among national , translational and international actors influence foreign policy decision making Khrmann examined four cases of foreign policy decision making after the end of the Cold War, such as the reduction of German export controls on goods with civil and military applications, the decision of the British government to support air strikes in Bosnia and showed that foreign policy decisions can be influenced by domestic, translational and international pressures 24 The above mentioned research is concerned with analysing policy networks Another study in this respect is the Ph.D thesis Domestic Policy Networks and the Making of EC Policy: The Case of Financial Services in France and the UK, 1987- 1992., 25 Although these approaches hardly can be considered as social network analysis, they also can be used in the study of decision making process References    Bavelas, A., "Communication Patterns in Task-Oriented Groups", Journal of the Acoustical Society of America, Vol 22, 1950, pp 725-730 Boelie Elzen , Bert Enserink and Wim Smit, Weapn Innovation- Networks and Guiding Principles, Science and Public Policy 17:3,1990, Brian L Foster and Stephen B.Seidman, A Formal Unification of Antropological Kinship and Social Network Methods, in Freeman C Linton, Whitre R.Douglas, Romeny A Kimball, (1992) Research Methods in Social Network Analysis , 23 Jacek Malczewski, GIS and Multicriteria Decision Analysis, John Willey and Sons, Inc., 1999 Multilevel Networks in British and German Foreign Policy, 1990-95, Elke Krhmann, Ph.D Thesis, LSE, 2000 25 Domestic Policy Networks and the Making of EC Policy: The Case of Financial Services in France and the UK, 1987- 1992., Ph.D thesis, LSE, 1995 24 18/10/2022 Page www.watertime.org                      Burkhardt, M E and D J Brass, "Changing Patterns or Patterns of Change: the Effects of a Change in Technology on social Network Structure and Power", Administrative Science Quarterly, vol 35, No., 1, 1990, pp 104 Burt, R S., "Models of Network Structure", Annual Review of Sociology, Vol 6, 1980, pp 79-141 Burt, R.S., Christman K.p , Kilburn., H.C., (1981) “Testing a structural theory of corporate cooperation: Interlocking Direcotrate Ties as a Strategy for Avoiding Market Constrains on profit” , American Sociology Review, 45 Cheryl Cott, "We decide, you carry it out": a social network analysis of multidisciplinary long-term care teams , Social Science & Medicine Volume 45, Issue 9, November 1997, Pages 1411-1421 Cheryl Cott, "We decide, you carry it out": a social network analysis of multidisciplinary long-term care teams , Social Science & Medicine Volume 45, Issue 9, November 1997, Pages 1411-1421 Christofer Edling and Rickard Sandell, Social Influence and Corporate Behaviour, A Case Study of Interdependent Decision Making in Sweded`s Publicity Traded Firms, in European Sociological Review V 17 N4, December 2001 pp 389-399(11) Christofer Edling and Rickard Sandell, Social Influence and Corporate Behaviour, A Case Study of Interdependent Decision Making in Sweded`s Publicity Traded Firms, in European Sociological Review V 17 N4, December 2001 pp 389-399(11) Domestic Policy Networks and the Making of EC Policy: The Case of Financial Services in France and the UK, 1987- 1992., Ph.D thesis, LSE, 1995 Domestic Policy Networks and the Making of EC Policy: The Case of Financial Services in France and the UK, 1987- 1992., Ph.D thesis, LSE, 1995 Edward O Laumann and Franz U Pappi, (1976) Networks of Collective Action, A Perspective on Community Influence Systems, Academic Press, Edward O Laumann and Franz U Pappi, Networks of Collective Action, A Perspective on Community Influence Systems, Academic Press, 1976 Foster and Seidman, 1992, 52 Foster B.L, Seidman, S.B, Network Structure and the Kinship Perspective, American Ethnologists, 8:329-355 Freeman, L C., "Social Networks and the Structure Experiment", Chapter in Research Methods in Social Network Analysis, L C Freeman et al (eds.), George Mason University Press, Fairfax, 1989 Goodenough W.(1965), Rethinking Status and Role, in The Relevance of Models for Social Anthropology, M.R Banton, ed., London, Tavistock Introduction to Social Network Analysis, Department of Sociology teaches the course at the University of California, Riverside Jacek Malczewski, GIS and Multicriteria Decision Analysis, John Willey and Sons, Inc., 1999 Jacek Malczewski, GIS and Multicriteria Decision Analysis, John Willey and Sons, Inc., 1999 John Peterson , Decision Making in the European Union: Towards a Framework for Analysis, Journal of Eruopean Public Policy, 2:1 , 1995 Jon Elster, Rational Choice, Oxford, 1986 Lankford P.M.(1974) Comparative Analysis of Clique Identification Methods, Sociometry, 37 18/10/2022 Page www.watertime.org                      Leavitt, H J., "Some Effects of Certain Communication Patterns on Group Performance", Journal of Abnormal and Social Psychology, Vol 46, 1951 Pp 38-50 Levine Joel, The sphere of Influence, 1972 Levi-Strauss (1963), C, Structural Anthropology, New York, M.A.L.M van Assen, F.N Stokman, D Willer, Exchange in Collective Decision Making: Applying Network Exchange Theory and Game Theory Mark S Mizruchi and Blyden B.Potts, The Location of Decisional Power in Influence Networks, The paper was presented on the Sunbelt Conference on Social Network Analysis in 1999 Mark S Mizruchi and Blyden B.Potts, The Location of Decisional Power in Influence Networks, The paper was presented on the Sunbelt Conference on Social Network Analysis in 1999 Marsh, The Utility and Future of Policy Netwrok Analysis Mayntz, Networks, Issues and Games pp 189f Multilevel Networks in British and German Foreign Policy, 1990-95, Elke Krhmann, Ph.D Thesis, LSE, 2000 Multilevel Networks in British and German Foreign Policy, 1990-95, Elke Krhmann, Ph.D Thesis, LSE, 2000 Nadel S.F.,(1957) The Theory of Social Structure, London Quinn, N., (1975) Decision Models of Social Structure, American Ethnologist, Rice, R E and C Aydin, "Attitudes toward New Organizational Technology: Network Proximity As a Mechanism for Social Information Processing", Administrative Science Quarterly, Vol 36, 1991, pp 219-244 Scott, J., Social Network Analysis, A Handbook, Sage Publications, 1991,p.7 Scott, John, (1991) Social Network Analysis, A Handbook, Saga Publications, Sonquist S.A., Koenig T (1975), “Interlocking Directorships in the Top US corporations” , Insurgent Sociologist, Stacy Wolski, Does network position influence how people make decisions? A test of Firedkin`s social influence network theory, The paper was presented on the Sunbelt Conference in 2002 Stacy Wolski, Does network position influence how people make decisions? A test of Firedkin`s social influence network theory, The paper was presented on the Sunbelt Conference in 2002 Tichy, N M., M L Tushman, and C Fombrun, "Social Network Analysis for Organizations", Academy of Management Review, Vol 4, No 4, 1979, pp 507-519 William Carroll, John Fox and Michael Ornstein, The Network of Directorate Interlocks among the Largest Canadian Firms, Downsview, Ontario: Institute for Behavioral Research, York University, 1977 Wright , Policy Community, Policy Networks and Comparative Industrial Policies, 18/10/2022 Page ... financial bodies are crucial for the start and performance of the firms Use of Social Network Analysis in Decision Making Research Social network analysis has also been used for studies on decision. .. this study Wolski tested Firedkin`s theory of social influence.19 Exchange theory has also been used in some studies involving social network analysis and decision making M.A.L.M van Assen, Stokman,... of social network analysis for decision making research includes applying some SNA techniques for the study the pattern of decision making itself It is possible to because the process of decision