Social Network Analysis in Decision Making: a literature review

Author:	Vladimir Popov
Institution:	PSIRU
Date:	31/03/2003
	Work Package: 1	Deliverable no.:

 

 

1      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. [1]

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.

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. [2]

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, [3]  Burt, [4], Freeman[5], 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. [9]

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 interlocking directorship and its effects. Carroll, Fox, Ornstein[10], Sonquist, Koenig [11], Burt,  Christman, Kilburn[12] 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.

2      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 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.Pottss research on  the location of decision making power in influence networks, <a title="" href="#_ftn18">[18]</a> and Stacy Wolskis research on the impact of network positions on  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 exchange-resistance 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 do  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' andconsideration of interest' . One of their diagrams is shown in Figure

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 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.

 

3      References

 

• Bavelas, A., "Communication Patterns in Task-Oriented Groups", Journal of the Acoustical Society of America, Vol. 22, 1950, pp. 725-730
• 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
• Freeman, L. C., "Social Networks and the Structure Experiment", Chapter 1 in Research Methods in Social Network Analysis, L. C. Freeman et al (eds.), George Mason University Press, Fairfax, 1989
• Introduction to Social Network Analysis, Department of Sociology teaches the course at the University of California, Riverside
• Leavitt, H. J., "Some Effects of Certain Communication Patterns on Group Performance", Journal of Abnormal and Social Psychology, Vol. 46, 1951. Pp. 38-50
• M.A.L.M. van Assen, F.N. Stokman, D. Willer,  Exchange in Collective Decision Making: Applying Network Exchange Theory and Game Theory
• 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
• 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

• 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 ,

• 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

• Goodenough W.(1965), Rethinking Status and Role, in The Relevance of Models for Social Anthropology, M.R. Banton, ed., London, Tavistock

• 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

• Levine Joel, The sphere of Influence, 1972
• Levi-Strauss (1963), C, Structural Anthropology, New York,

• 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, 2

• 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, 5
• 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

• 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,