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 and control 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: