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

Organization Science, 23 (2012): 449-471

42 Pages Posted: 27 Jan 2011 Last revised: 5 Mar 2013

See all articles by Ranjay Gulati

Ranjay Gulati

Harvard Business School - Organizational Behavior

Maxim Sytch

University of Michigan, Stephen M. Ross School of Business

Adam Tatarynowicz

Singapore Management University - Lee Kong Chian School of Business

Date Written: January 26, 2011

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 due to 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: Networks, Organization Theory, Economic Sociology, Strategy and Policy

JEL Classification: M10

Suggested Citation

Gulati, Ranjay and Sytch, Maxim and Tatarynowicz, Adam, The Rise and Fall of Small Worlds: Exploring the Dynamics of Social Structure (January 26, 2011). Organization Science, 23 (2012): 449-471. Available at SSRN: https://ssrn.com/abstract=1748630

Ranjay Gulati

Harvard Business School - Organizational Behavior ( email )

Soldiers Field Road
Morgan 317
Boston, MA 02163
United States
617-495-8554 (Phone)
617-496-6568 (Fax)

HOME PAGE: http://www.hbs.edu

Maxim Sytch

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

Adam Tatarynowicz (Contact Author)

Singapore Management University - Lee Kong Chian School of Business ( email )

50 Stamford Road
Singapore 178899
+65 6828 0028 (Phone)
+65 6828 0777 (Fax)

HOME PAGE: http://www.tatarynowicz.com

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