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Two Approaches to Social Structure: Exchange Theory and Network Analysis
Author(s): K. S. Cook and J. M. WhitmeyerSource: Annual Review of Sociology, Vol. 18 (1992), pp. 109-127Published by: Annual ReviewsStable URL: http://www.jstor.org/stable/2083448.
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Annu.
Rev. Sociol.
1992.
18:109-27
Copyright
?
by Annual
Reviews
Inc. All rights
reserved
TWO
APPROACHES
TO
SOCIAL
STRUCTURE:
Exchange
Theory
and
Network
Analysis
K.
S.
Cook
and
J.
M.
Whitmeyer
Department
of Sociology,
University
of
Washington, Seattle, Washington
98195
KEY WORDS:
social
exchange,
exchange
networks,
power,
social networks
Abstract
Much convergence
exists
between
exchange
theory
and
network
approaches
to social structure.
Starting
with the
work of Emerson,
exchange
theory
increasingly
has considered
social
structure
explicitly,
as both product
and
constraint.
Exchange
theory
and network
analysis
both conceptualize
social
structureas a configurationof social relationsand positions, i. e. as a set of
actors diversely
linked into
networks.
Exchange
theory
and
most
work
in
network
analysis
are based
on
similar conceptions
of the
actor.
Where ex-
change theory
and network
analysis
differ
is in their
view of
the
links between
positions.
Exchange
theory
stresses
the exchange
aspects
of
all ties
and
contends that
the appropriate
etwork
in
any
analysis
is one that
contains
all
relevant
exchange
relations.
Network
analysis
tends
to
be more catholic
about
the nature
of the
links.
INTRODUCTION
Social structure
s
one
of the
central
concepts
in sociological
analysis.
It
is
also at the core
of
many of the
most
influential theories
within
the
field of
sociology.
Durkheim,
Parsons,
Levi-Strauss,
Marx,
Weber,
Merton,
Coser,
109
0360-0572/92/08
15-0109$02.00
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110 COOK&
WHITMEYER
Blau, Coleman,
and many others have developed conceptions of social
structure n their attempts o provide explanatory
rameworks hat encompass
both humanbehavior and institutionalpersistence and change. Our task here
is to begin to
specify how two different literatures
within sociology can be
brought ogether n
the analysis of social structure nd
structural orms. These
two
traditionsare
exchange theory and network approaches o structure.To
accomplish this task
we provide a brief statement of historical
context,
placing this chapter
n the relevantstreamof work thathas been conductedon
the
topic of social structure. This
statement
is
followed by reviews of the
commonalities and
differences in the approaches o structure aken by ex-
change theoristsand network analysts. We conclude with comments about
future developments linking these two traditions.
A
fairly comprehensive treatment of the different
approaches to social
structurecan be found in the volume edited by Peter
Blau (1975). Various
conceptions of social structureare presentedby authors
hat include Bierstedt,
Blau, Bottomore, Coleman, Coser, Goode, Homans,
Lenski, Lipset, Merton,
Parsons, and
Wallace. Blau identifies three major
approaches o social struc-
ture:
(i)
social structure s a
configuration f
social
relationsandpositions, (ii)
social
structure
as
the substratum hat underlies all of social life and history,
and
(iii) social structureas
a
multidimensional
pace
of
the differentiated
social positions of
the people in a society or other
collectivity (Blau
1975:14).
The
approach
o social structure
adoptedby
exchange
theorists
(including
Blau
1964) and a
majorityof the network analysts is the first alternative,the
configurationalapproach.
We
focus
primarilyupon
this
general approach
o
social
structure.We
omit from our discussion
the structuralism haracteristic
of
Levi-Strauss
(though
this is
mentioned, by
Ekeh
1974,
as a distinct
tradition
within
exchange theory)
and
subsequent
developments along
this
line.
What
Blau refers
to
as
the multidimensional pproach
s
characteristic f
his
more recent work
(e.g.
Blau
1977).
In the next section we first review the
treatmentof social structure
by exchange
theoristsand then move
to
network
approaches.
SOCIAL
STRUCTURE:
AN EXCHANGE PERSPECTIVE
Exchange
theorists advancea basic
image
of social structureas a
configura-
tion
of
social relations
among
actors
(both
individual and
corporate),
where
the
relations involve the
exchange
of valued items
(which
can be
material,
informational,
symbolic, etc). Exchange theory increasingly
has
involved
explicit
consideration of social
structure,
as
both
product
and
constraint,
typically
in the form
of
networks
of social
relations.
We will comment on the
similarities and differences
in
the
perspectives
on social structure
of three of
the
principal
exchange
theorists in historical
progression.
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EXCHANGE HEORY
AND NETWORK NALYSIS 111
Homans' View
of Social Structure
Homans' (1961, 1964) primarypurpose
was the study of
the
subinstitution-
al or elementary orms of behavior.Homans developed a theory of social
behavior based primarilyupon behavioral
principles
of analysis. He
took as
the domain of his explanatory
framework (1961:3),
the actual social be-
havior of individuals
in direct contact
with one another. He refers
to this
behavior as
elementary
and clearly distinguishes
t from behaviorthat
can
be
defined
as
obedience to the
norms of a
society (including
role-related be-
havior). Role-conforming
behaviorwas institutionalized
ehavior, thus actual
behavior was defined by Homans as
subinstitutional.
For Homans, social structuresemerge from elementaryforms of behavior
and
change
over
time
in
response
to changes
in
this
behavior
by aggregates.
(He does not address
n
any detail the complex interplay
between microlevel
processes and aggregate evel outcomes.)
He argued hat
the similar behavior
of
enough people
can alterexisting social structures
nd institutions
and
even,
under some
conditions, replace
them.
Sometimes the
great
rebellions and
revolutions, cracking the institutional
crust, bring out elementary
social be-
havior hot and straight
rom the fissures Homans 1961:398).
His
analysis
of
social behavior enduresas a classic in sociology precisely becausehis vision
of
the underpinnings
f social structureand
institutional orms
is
straightfor-
ward and is linked
so clearly to the actions of individuals
(i.e.
to their
responses to rewarding
and punishing
circumstances).
Though the
focus of Homans' theoretical framework
was the relations
between actors
in
direct contact with
one
another,
he
did
acknowledge
the
structural
mportance
of indirectexchange
relations.
An
example
is the social
relationbetween employees of the
same employer,
who are related indirectly
in second-orderexchange relations through theircommon link to the same
employer.
In this sense the
basic format for
exchange
network
analysis
existed in the earliest formulations.
Blau's Early View of Social
Structure
While Homans' work
is
distinctly microsociological
in
character,
Blau's
(1964) major treatise on exchange
and power
is an
explicit
statement
of the
micro-macro inkage problem,
before micro-macro
ssues became
a fashion-
able
topic
in
sociology
in the
1980s (e.g.
Alexander
et al
1987,
Collins 1981,
Cook
1991,
Huber
1991, etc).
Blau's focus
was the
development
of
a
theory
of
social structure
and institutions based
upon
a
sound
microfoundation,
a
theory
of social
exchange.
Two
major
featuresdifferentiateBlau's
work from
that of
Homans.
First,
Blau did not base his
theory
of
exchange upon
behavioral
principles;
instead he introducedaspects
of micro-economic
rea-
soning
into his
analysis
of
distinctly
social
exchange
(see
Heath
1976).
Second, recognizing
that social structureshave
emergent
properties,
he ex-
tended the
theory beyond
subinstitutional
phenomena.
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112 COOK
& WHITMEYER
Blau discusses processes like group
formation, cohesion, social
integra-
tion,
opposition, conflict, and dissolution in terms of principles of
social
exchange. In his view various forms of social association generated by
exchange
processes over time come to
constitutequite complex social struc-
tures
(and
substructures).The coordinationof action in large
collectivities is
made possible
by common values in the social system which
mediate the
necessary
indirect exchanges. Thus Blau's
theory moves far beyond
direct
contact between
individual actors,
incorporating omplex indirect exchange
processes.
Structural change in both
small and large social structures is
analyzed
in
terms of social forces like
differentiation, ntegration,organiza-
tion, and opposition. Blauand, subsequently,Emerson(1972a,b) both made
power processes centralto their analysis of
the emergenceof social
structures
and
structural
change.
Emerson's
Exchange Network
Theory and Related
Developments
Of
the three
major heorists,
Homanswas the most
psychological
in focus and
thus in
many
respects
the most
microsociological. Blau focused attentionon
the more macro
level, emphasizingmicroprocesses
primarily
as
a foundation
for
building a
more complex theory of
emergentprocesses
in social structures
and
institutional
hange.
Emerson
developed a behavioralmodel of individual
action
but emphasizedthe shift to a
more macro level
of
analysis through
he
incorporation
of
collective actors and networks into his formulation.
As
Turner
1986:304) puts it, Emerson's approach removesmuch of the
vague-
ness
surrounding
Homans' and Blau's
conceptualizations
f
social
structures
as 'institutional
piles'
and
'organized
collectives'. Social structure
n
network
analysis
has a
more
precise
definition
as
patterns
of connections
among
actors
in networks of
exchange relations.
In his
seminal
work
on
exchange
theory
Emerson
(1972ab) produced
a
well-developed
formulationbased
upon behavioralprinciples(similar
to
those
found in
Homans' work). He embeddedhis
generalpower/dependenceprinci-
ple (1962, 1964)
in the
context
of an
exchange
theoretical
rameworkwhich
took
as
its
psychological base,
behavioral
principles
of
reinforcement,
satia-
tion,
extinction,
etc.
Part
II
(1972b)
of
this
work
takes
social structureas the
central
subject
matterand includes
rudimentary
heoreticalstatements
regard-
ing mechanisms of structural hange (see Cook 1987:216-7 for a description
of the model of
social
structure
developed
in
Part
II).
Emerson
(1972a:41)
noted two
major shortcomings
with Homans'
be-
havioral
formulation.
First,
it
had
no
real
conception
of
society except
as an
aggregation
of
individual
behavior.
In
this
sense
its
conception
of
social
structurewas
too
rudimentary.Second,
it
treated
as
given
he
social context
surrounding
behaving persons,
that
is,
the social
structuresand structural
changes
that
sociologists
seek to
comprehend.
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EXCHANGE
HEORY
AND
NETWORK
NALYSIS
113
An
actor in
Emerson's
theory
is
conceived as
a
point
where
many ex-
change
relations
connect
(1972b:57).
The
actor
can be a
person, a
corporate
group
(or
collective
actor),
or a
role-occupant.
This
conception
of
actor
makes
the
theory
applicableat
different
evels
of
analysis,
and the
theory has
been
applied
to
relations
between
individuals,
organizations,
and
even
nation-
states.
The
primary
ocus is
upon
exchange
relationsas
the
building
blocks
for
more
complex
social
structures
alled
exchange
networks
or
corporate
groups
(involving
intragroup
exchanges).
As
Emerson
(1972b:60)
notes,
the con-
cept of an
exchange
relation, and
the
principles
which
surround
t,
provide a
basis
for
studying the
formation
and
change
of
social
structuresas
enduring
relations
among
specified
actors,
with the
exchange
relationsas
the
structural
unit.
Exchange
networks
are
viewed
as
connected
sets of
exchange
relations.
An
early,
important
advance
was the
distinction
between
positive and
negative
exchange
connections. If
an
actor's
exchange
in
one
relation
is
positively
related to
the
actor's
exchange in
another
relation, the
relations
are
positively
connected;
f
the
relationship
s
negative,
they
are
negatively connected'
(for
further
discussion
see
Emerson
1972b).
A
primaryfocus of the
subsequent
theoreticaland
empiricalwork
(e.g.
Cook
1987)
has
been
on
specification
of
the principlesof exchangeandpower thatapplyto differentkindsof network
structures
(which
Emerson
referred
to as
structural
prototypes, such as
monopoly
structures,stratified
networks,
circles, and
chains). In
particular,
attention has
been
focused
on
the
relationship between
types of
exchange
connections and
the
distributionof
power
and
dependence
among
actors
in
various
network
structures
e.g. Cook
&
Emerson
1978, Cook et al
1983,
etc).
Structural
hange
is
viewed in
the
theory
as a
consequence
of
various
social
processes
(e.g. coalition
formation)
n
exchange networks and
within
corporategroups nitiated, n part, becauseof apowerimbalanceeitherwithin
the
exchange
relation
(relational
power
imbalance) or
within the
exchange
network
structure
structuralpower
imbalance) (see
Gillmore
1987,
Cook
&
Gillmore
1984,
Cook
&
Emerson
1978, Emerson
1981,
Molm
1989,
Cook
1990,
etc).
In
conclusion,
exchange
network
theory,
initiated
with
Emerson's
work
(e.g.
1972a,b and
subsequent
work)
and
continuing
in
that of
others
(e.g.
Cook
1977,
Cook
& Emerson
1978,
Willer
&
Anderson
1981,
Markovsky
et
al 1988, etc), has attempted o fuse perspectivespreviously considered in-
compatible
(see
Blau
1975,
Merton
1975),
incorporating
both
psychological
factors and
social
constraints
n
terms
of
alternatives
and
opportunity
struc-
'The
actual
definitions
(Emerson
1972b:70)
are: a
negative
connection
is one in
which
an
increase in
the
frequency
or
'magnitude '
of one
exchange in
which an
actor is
involved
produces
or
implies
a
decrease
in a
second
such
exchange.
A
positive
connection
is one in
which an
increase in one
exchange in
which
an actor
is
involved
producesor
stimulates an
increase in
a
second
such
exchange.
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114 COOK& WHITMEYER
tures. This is, in our view, the majoraccomplishment
of recent developments
in exchange theory (referred to as either
structuralversions of exchange
theory or exchange network heory). It is thismore recentversion of exchange
theory which is most
compatiblewith the fundamental iew of social structure
embedded in much
of the work in network
analysis. We now turn to an
explicit consideration
of the relationshipbetween
exchange theory and net-
work analysis, beginning
with an overview of what network analysis
is.
LINKING EXCHANGE
AND NETWORKAPPROACHES
What is Network
Analysis?
In
discussing the potential
for linking these two
traditionsof work in sociolo-
gy we must begin with
one key difference. Exchangetheory s really the
name
of a class of theories all of which have much
in common (e.g. the theories of
Homans, Blau, Emerson, Thibaut& Kelley,
Coleman etc). Exchange
theory
can be seen as
an
approach o interactionand structure
based on two princi-
ples: (i) The actor
can be modeled as motivated
by interests or rewards/
punishments-i.e. all behaviorcan be seen
as so motivated; ii)
most interac-
tion consists of the exchange of valued (though not necessarily material)
items. Network analysis,
on the other hand, has been less theoretically
and
more empirically
driven (see
Wellman 1983). Network analysis
is
rooted
in
the
empirical
observation
that
patterns
of interaction
of
many
actors can
be
looked at as networks.
A
narrowconception
of network analysis
exists, which considers it a type
of structural
nalysis.
Network
analysts.
.
. try
to describe
[regular
net-
work patterns] and
use
their descriptions
to learn
how network structures
constrain social behavior
and social
change (Wellman 1983:157).
This
version of
network
analysis contends,
in
agreement
with the
structuralist
position
in
Sociology
(e.g.
Blau
1977, Mayhew 1980),
that all
important
social
phenomena
can
be
explained primarily,
if
not completely, by
social
structure.The network
version of this
position
is
professed by,
for
example,
Berkowitz
(1982),
Wellman
(1983),
Skvoretz
(1990), and,
to
some
extent,
Burt
(1982b).
For three reasons, we take
a broaderview of network
analysis.
First, many
network-related tudies
do not fit with the more
narrow
conception
of the
structuralist pproach,
such
as studies of the creation
and/or maintenance
of
networks
(e.g.
Galaskiewicz 1982,
Mizruchi& Stearns
1988),
or with studies
that
investigate
the
influence of non network
factors on network
characteris-
tics
(e.g.
Feld
1981,
Fischer
1982,
Laumann&
Marsden
1982).
We wantedto
include these. Second, by excluding
considerationof the
individual
actor,
the
narrow
structuralistapproach
excludes
linkage
of
network
analysis
with
exchange theory.
We consider such
a
linkage
to be both natural
and
potential-
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EXCHANGE HEORYAND NETWORK
NALYSIS 115
ly fruitful. Third, some
network structuralists
re less strictly structuralist n
practice than in principle
(e.g. Burt 1982b).
Numerous reviews of network analysisexist (e.g. Mitchell 1974, Berko-
witz 1982 ch. 1,
Wellman 1983, Marsden 1990),
so
the history
we present
here is brief. The contemporaryarea of
network analysis has been
formed
through
a
cross-fertilizationof work
from several different disciplines, with
different
empirical
and
even theoretical aims. We can identify
at least three
sources for networkanalysis:empiricalwork
in social anthropology
e.g. Bott
1957, Mitchell 1969,
Kapferer1972), the practiceof sociometry (e.g.
More-
no 1951), and more abstractmathematical
models and theory such
as biased
net theory (Rapoport1957) and graph theory(e.g. Hararyet al 1965). As is
evident in this review, the diversity of origins continues
in the present
diversity
of
subjects
of empirical
research and structural nterests (e.g. net-
work
structure
as an independentor dependent
variable).
The
development
of network analytic tools
and
techniques
proceeded
rapidly, beginning
in the
early 1970s,
among anthropologists
and sociolo-
gists. Debate among
the early network analysts
focused not only on
the
appropriatemeasures
of
importantconcepts
and methods of
data collection
(e.g. observation, diaries, surveys), but also on whetheror not there was
anything
to be called network
theory.
To some
extent,
this debate
con-
tinues. Positions on the
issue
range
from that of
Barnes
(quoted
in
Mitchell
1974:282): there
s no such thing as a theory of social networks,
to that of
Burt (1982b) who formulated
a
structural heory
of action
to
provide
theoreti-
cal underpinning or
network conceptions
of structure.
According
to Marsden
(1990:453),
much network
analysis
can
be
viewed
as
part of
a research
program
o
develop
social structural
measures. These
measurescan then be utilized
by
various theorists
n their efforts
to include in
their theories and
empirical
research measures of
social
structural
concepts
(e.g. range,
centrality,
and
density
of actors' social networks-see
Marsden
1990 for
a
comprehensive
review). For example,
network
analysis
has been
combined
with
functional analysis
and role theory. Recently, proposals
have
been
made to
combine it with
expectation
states
theory (Fararo
& Skvoretz
1986)
and with
Giddens'
structuration
heory (Haines 1988).
From
the
beginning
some network analysts
used
exchange
theory
to
pro-
vide
the theoretical
basis
for
the
analysis
of the
social interactions
they
represented
n
network terms (e.g. Kapferer 1972,
Whitten
& Wolfe
1974,
etc).
Various authors
(e.g.
Turner
1986, 1987,
Collins
1988,
etc)
have
commentedon the
potential
for
linking
exchange
and network
approaches
o
social structure.Collins (1988:412),
for
example,
remarksabout
the
growing
awareness
of
the
connection between
networks
and
market or
exchange
theories...
two
conceptions
of how
individuals
link
together
into
a
larger
social
structure.
n an
influential
review
piece,
Mitchell
(1974)
argued
that
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116
COOK&
WHITMEYER
transactional heories
(including
exchange
theory)
formed a natural
alliance
with network concepts.
Kapferer
(1972) even
proposed
exchange
theory
as
themost suitablebasis for networkanalysis (quoted n Mitchell 1974:282).
We agree with
Kapferer.
However, since
exchange
theory
and network
analysis are
different
types of entities,
it is
difficult to talk
about
integrating
them without
clarifying
the specific
ways
in which they
are compatible
or
incompatible
as perspectives.
One obvious
but relatively
unimportant
iffer-
ence is
in
how
these approaches
are
practiced-how
hypotheses
are tested,
how
the data
are gathered
and analyzed,
etc. More critical
for the
issue of
linkage between
them
are compatibilities
and incompatibilities
n (a ) their
views of action, i.e. the modelsof the actorunderlying ach approach,and (b)
their
views of structure.We
discuss each of these
topics, along
with some
prescriptions
regarding future
developments
that
might integrate
aspects of
these
two traditions
n
ways
quite
fruitful for sociologists.
The Individual-Level
Model
No
two theoretical
approaches
are compatible,
nor
can they be linked
effec-
tively,
if
they
have
fundamentally
different
models of the
individual actor.
We believe thatmost work in networkanalysisis at least compatiblewith the
exchange theory premise
of the
actor as motivated
by
interest
or reward/
punishment.
However,
that which
is not compatible
cannot be linked
with
exchange
theory.
For
example,
Haines
(1988)
advocates basing
network
analysis
in Giddens's conception
of agency -an
alternative
ndividual-level
model incompatible
with
that of exchange
theory.
Similarly,
Fararo
&
Skvoretz
(1986)
suggest
basing
network
analysis
in
expectation
states
theory.
This work may be compatible
with
exchange
theory,
but only
if
the
individual
level models
of
expectation
states
theory
and exchange
theory
are
compatible,
which seems
dubious
(see, e.g.,
Berger
et
al
1972b).
Burt
(1982b)
claims
to have
a different model
of the actor,
but
this is an
overstatement.Exchange theory
analysis
holds
(i)
for
any
model
of
the actor
wherein the
actor
pursues
interests
whatever
they may
be,
and
(ii)
where
at
least some of
the interests
are satisfied
through
social interaction.
Exchange
theory
makes
no commitment
o the
origin
of those
interests, although
some
individual exchange
theorists do
have their
preferred
supplementary,
more
microlevel
models on this
point.
These
may
conflict
with
Burt's
model
which
says
that
an actor's interests
stem
from the actor's network
position.
Howev-
er,
Burt's model
is
fully
compatible
with the
most
basic
principles
of ex-
change
theory. Namely,
Burt's
actors
do have
interests,
some
of
which
they
do
pursue
and
obtain
through
social
interaction.
Biased-net
theorists
(e.g.
Fararo& Skvoretz 1987,
Skvoretz
1990)
claim
that
no individual-level
model is
necessary,
a
position
which
echoes
the
views
of other non
network structuralists
uch
as
Mayhew
(1980)
and
Blau
(1977).
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EXCHANGE
HEORY
AND NETWORK
NALYSIS
117
Biased-net
theory describes
and even seeks
to explain (see Skvoretz
1990)
network
structure as
global
or regional deviations
from
randomness (or
biases ),possibly in a numberof differentdimensions.Contrary o the stated
claim
that no model of
the actor
is necessary, this
theory implies
and indeed
requires
a certain
model of the
actor.
Namely,
actors must exhibit
these
biases,
and apart from
the biases
there can be no
other deviation
of actors'
behavior
from randomness arge
and widespreadenough
to distortthe
picture
of the network.
This model of
the actor
clearly is different
from
that of
exchange theory and
makes these
two approaches
ncompatible.2
One assumption
concerning
the model of
the actor is critical
to much
work
in networkanalysisand exchange theory.This is theassumption hatthe same
model of the
actor can
be used
for organizations or
perhaps
specific types of
organizations
such as
corporations)and
for individual
humans. This
assump-
tion is widespread
among
network
analysts whose
actors are organizations
(e.g.
Laumannet al
1985,
Mizruchi
1989, 1990ab),
and widespread among
exchange
theorists (e.g.
Emerson 1972b,
Markovsky
et al 1988)
and
indeed
some other theorists
in sociology (e.g.
Berger et
al 1989).
Yet
both a priori
considerationsand empirical
evidence call
the assumption
into question (see Caputo1989, Stinchcombe 1989). Social organizationsare
made up
of entities
with their own interests
and
capable
of acting autono-
mously;
human
beings
are not. For example,
in his analysis
of
the
creationof
institutions
by
corporatedonor
and
nonprofitdonee organizations
o
reduce
the transaction osts
of donations, Galaskiewicz
(1982)
must make use
of the
differences
of interests
within organizations.
The issue
of the
validity
of the
organizational
actor
is related to the
extensive debate (cf
Mizruchi&
Schwartz 1987)
between the
resource
depen-
dence and
the social class positions
over the purpose
of
intercorporate
ies
in
the form
of
interlocking
directorates.
The resourcedependenceposition
(Per-
ucci &
Pilisuk
1970,
Pfeffer
1972, 1987,
Pfeffer &
Salancik
1978,
Berkowitz
et al 1978/1979,
Burt et al
1980,
Burt
1983,
Mizruchi
1989, 1990a,b)
argues
that
intercorporate
ies are
created
for
the
purpose
of
maximizing
corporate
profit
through
lessening corporate
dependence,
and
that
they
are
effective at
this. This
perspective
is
strongly
related
to the
exchange theory perspective,
with the
actors
involved being organizational
actors (Berger
et
al
1989).
The
class
position (Zeitlin
1974,
Domhoff
1975,
Soref
1976,
Useem
1978, 1979,
1984,
Bonacich
&
Domhoff
1981,
Gogel & Koenig 1981, Palmer 1983,
Palmer et
al
1986,
Bearden
&
Mintz
1987,
Soref &
Zeitlin
1987,
Johnsen &
Mintz
1989)
argues
that
intercorporate
ies
are created as
a result
of human
individuals
(or
families) pursuing
their
own class interests.
This
position
is
2Some biases
may generate
structurewhich
resembles
that
generated
by exchangeprocesses.
However,
our
concern
here is with differences
in the
underlying
models
of the actor.
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118
COOK& WHITMEYER
also
compatible
with exchange theory
if it is accepted
that
elite
individuals'
personal
nterests
are
congruentwith
their
class interests.
Most
versions of
the
class perspectivefit this formulation.The elite network may be seen as an
example
of a social
circle, a type of social
structure
which Emerson
(1972b)
explains
in exchange
terms. Here, however,
the actorsare
human
ndividuals.
There is some
empirical
evidence
for
each position.
The centrality
of
financial
institutions n
intercorporate
etworks,
for example,
has
been
well
established
(Mariolis
1975, Sonquist
&
Koenig 1975,
Mintz
& Schwartz
1981,
Mizruchi
1982,
Stokman et
al 1984).
Mizruchi
(1989,
1990b)
has
shown
that
intercorporate
etwork positions,
especially
the existence
of
in-
direct links throughfinancial institutions,predict similarityof political be-
havior
(contributions
o PACs). On
the other hand,
Bearden
& Mintz
(1987)
found that
while banks were
indeed central
in the
intercorporate
network,
bankers as
individuals
were not prominent
n linking
roles. Johnsen
&
Mintz
(1989)
looked
at the director
network,
the
dual see Breiger
1974,
Berko-
witz 1982)
of the intercorporate
etwork, and
found
social ties generally
to
be
causally prior
to intercorporate
inks between
individuals.
Studies have
found
a
low rate
of reconstitution
of directorate
ies that
are
accidentally
broken
(Koenig et al 1979, Palmer 1983, Palmeret al 1986).
As
a comment
on both positions
we may add
Galaskiewicz's
(1989)
points,
in
his
presentation
of unresolved questions
concerning
interorganizational
networks
at the metropolitan
evel,
that
(a)
ties
created
for one reason may
be
used
for
another p. 82);
and (b)
creating
ies for
some
purpose
does not
mean
necessarily
that
they
will be effective (p. 86).
Similarly,
we
may
note
that it
is
possible
that interlocking
directorate
ies are
created according
to individual
human interests, yet
other organizational
behavior
is best
explained
by
the
dependence
of
organizational
actors.
This issue is not
yet
resolved.
The View
of
Structure
We can distinguish
two
general
conceptions
of structure
n
network analysis.
The more common
view conceives
of structureas
a
pattern
of
particular
ies
between
actors,
where variation
n
the network
n
the
existence
or
strength
of
ties
is
meaningful
and consequential.
The other
conceives
of structure
as a
general
deviation
from random ies
for
particular
roups,
or
perhaps
he entire
network.
In
other words,
the
first view sees structureas a composition of
particular
ties,
the
second sees
structure
as
a
general
perhaps
multi-
dimensional
deviation from randomness.
The second
view
is
the
biased
net
perspective
(e.g. Rapoport
1957,
Fararo&
Skvoretz 1987).
The first
view is
taken
by
virtually all
other network analysts
and
is
also
that of exchange
theorists
(Collins
1988).
Thus the
general
view of structure
of most
network
analysts
and
exchange
theorists s
the same.
Wheredifferences
exist
is in
their
views
of the details
of
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EXCHANGE
HEORYAND
NETWORK NALYSIS
119
structure-the
ties. These
differences constitute the greatest
challenge to
compatibility
and linkage between the two approaches.
In brief,
fitting their
theoreticalbase, exchange theoristsassume that ties consist of the exchange
of valued items.
Fitting their more empirical
startingpoint,
network analysts
are
frequently
more catholic
about the content of ties (Marsden
1990).
However, there is much variation
in the
treatment of content, between
networkanalysts
and even within the work of
individualscholars.
Frequently,
this
depends
on the aspect
of the structure-action elationship
being
in-
vestigated.
Therefore, we look
at some of the
network analysis literature o
examine the compatibility
of
the exchange theory
stance with
various treat-
ments of tie content.
Virtuallyall studies that undertake
o show
the effects of action on structure
clearly take
ties to consist
of exchange. That is, studies that
look at the
construction
or
maintenance
of networks
(e.g.
Verbrugge
1979, Wellman
1979, Burt 1982a, Feld 1981,
1982, 1984,
Galaskiewicz 1982, Palmer et
al
1986, Suitor
1987, Mizruchi& Steams 1988,
Barley 1990, S.
L. Feld
& J.
J.
Suitor, unpublished
paper,3
N. P.
Hummon, unpublishedpaper4)
or
which
analyze the
effect
of
variation
in
personal characteristics
or
the interests
of
actorson variation n networkcharacteristicse.g. Fischer 1982, Laumann&
Marsden 1982,
K.
E. Campbell
& B. A. Lee,
unpublished
papers5)specify
the ties
in
their
networks
explicitly
or
implicitly
as
exchange
ties.
Thus, they
are
entirely compatible
with
exchange
theory.
The
reasoning
behind
Granovetter's
various
arguments
(Granovetter
1973, 1983) concerning
the
creationand
effects
of
strong
and weak ties
is in
accord
with
exchange theory
principles. For example,
stronger ies mean
more secure access to resources;
thus
those
with fewer
personal
resourcesare more
likely
to rely
on
strong
ties
(Granovetter
1983).
A
few studies undertake
o show the effect
of
structurenot,
or not only,
on
action
but
on
affect (e.g.
Fischer 1982, Marsden1983).
These
studies too take
an
exchange
view
of
ties.
For example,
Fischer
(1982)
finds that network
density
is
positively
related
to
feeling
better
for
low-income respondents,
but
negatively
related for high-income
respondents.
For
an
explanation
he
sug-
gests
that low-income
people
are better
off with dense
cliques because,
unlike
high-income
people, they
lack the
material
and social resources
to
manage
dispersed networks (p. 150).
3S. L. Feld, J.
J.
Suitor,
Mothers and bestfriends: alternative
sources
of social support or
young
married women
in
seven
western countries. Paper
pres. at X
Sunbelt Social Network
Conf.,
1990,
San Diego, Calif.
4N. P. Hummon,
Organizationalstructures
and networkprocesses:
an explorationof
ex-
changeprocesses. Paper
pres. at
X Sunbelt
Int.
Social Network
Conf.,
1990, San Diego, Calif.
5K. E. Campbell, B. A. Lee,
Personal
networks in urbanneighborhoods:
description
and
variation, 1991. B.
A. Lee, K.
E. Campbell,Neighbor
networksof
blacks and whites, Paper
pres. at
ASA Annu. Meet., 1990,
Washington,
DC
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120
COOK
&
WHITMEYER
The
difficulties arise with some studies that examine
the effect of structure
on
action,
or in
some cases, on
other aspects of structure. The exchange
theoryposition concerningthis relationship s that therelevantnetwork s one
that
consists of all relevant and
important ies due to
exchange (i.e. of valued
items)
and only those ties. Granovetter 1985) has
called for acknowledging
the
close embeddedness of
behavior in networks of
interpersonal elations.
Since
interpersonal
relations
are virtually always
exchange relations, the
exchange theory position is
completely
in
agreementwith
his
argument.
The exchange theory
position is compatible with
many network analysis
studies
(e.g.
Marsden
1983, 1987, Coleman 1988,
Ridley & Avery 1979).
However, according to this position, many otherstudies are too permissive.
They include certain types of
ties without
theoretical justification (i.e.
specification in
exchange
terms); they leave out
important ypes of ties and
important actors. They also
fail to pay enough
attention to the interplay
between interestsand the items
being exchanged and to the
differing
effects of
complementary,common,
and
opposing
interests. Thus
they
fail to
perceive
the structural
mplications
of
these few-actor interactional
complexities.
As
examples,
we consider
the
widely used concept of the directionality
of ties as
well as some recent work on centrality.
The
directionality of ties
frequently
is
an
important
factor
in
network
analyses. For
example,
Knoke
&
Burt
(1983)
define
prestige
to be a measure
of the
degree
to which
an actor
is
the
object
of
connections.
However,
whenever a relationconsists of
exchange, any purported
directionality
comes
from
specifying only one side
of the
exchange.
In
such a
case, apparent
directionality
is due
to the
incomplete specification
of content and is a
spurious
factor. For
example,
Knoke
& Burt
(1983;
see
also Burt
1987)
measure the prestige of physicians in terms of being solicited for advice. But
this is
an
exchange:
the solicitation is
exchanged
for advice
(Blau 1955,
Homans 1961). The connection could
just as easily
be specified
with
the
opposite
directionality,
.e.
being
the
object
of
advice-giving. Thus, prestige
stems not
from
directionality
but from the content of the
exchange
relations
and
the
asymmetry
involved.
Centralitygenerally
is
taken to
mean network
position-conferred
advan-
tage.
In the
network
analytic literature,
more
attention
has been
given
to
its
specification
and
measurement han
to
any
other
issue
(e.g.
Bonacich
1972,
1987, Freeman
1979,
Knoke & Burt
1983,
Marsden
1982, 1983, 1987,
Mizruchi et
al
1986, Stephenson &
Zelen
1989,
Friedkin
1991). Recently
some new
measures have been devised
specifically
for
centrality
in com-
munication networks
in
which exchange
is
ignored
(Stephenson &
Zelen
1989,
D. L.
Kincaid, unpublished
paper,6Friedkin
1991). Exchange theory
6D. L. Kincaid,
Communicationnetworkdynamics:
cohesion, centrality,
and
cultural
evolu-
tion,
1990
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EXCHANGE HEORY
AND NETWORK NALYSIS 121
claims that interactions,and by extension the effects of network structureon
action
and structure, occur only due to the exchange value of the items
transferred which may be material, symbolic, informational,etc).7 There-
fore, when the exchange relations in the
network are obscured, the causal
processes involved in centralitywill be likewise hidden. When the exchange
relations are excluded, the results are
likely to be spurious if not in error.
Not all studies involving
communication networks are at odds with ex-
change theory. The effect of network
structure in Bonacich (1990), for
example, is explained as the effect of
network position on the expected
relative gain from communicatingversus not communicating.Network struc-
ture is shown to affect the likelihood of anactorcommunicating n the kind of
communicationdilemma situations studied by Bonacich. In Laumann &
Knoke
(1989; see also Galaskiewicz
1979, Knoke 1983) ties
in the com-
municationnetworkspersist due to the actors' dependenceon the information
and
the similarities in the actors' interests.
Exchange theory, however, suggests an
alternative to be tested against
explanations
in terms of
communication
networks which
ignore exchange
processes. First, all exchange links relevant to the behavior which
is
the
dependent variable should be included in the analysis (see Galaskiewicz
1989). For example, Kincaid (see footnote 6) presents a network of com-
municationconcerning family planningfor
a Koreanvillage (from Rogers &
Kincaid
1981). Are there exchange links to people
with interests
in
the
behaviors n question that are not
represented n the communication
network?
If
so,
it is
likely that exchange theory would make
different calculations
of
centrality
and
perhaps
even different
predictions
concerning
its effects.
Second,
ties
should be considered
n terms of the valued items
exchanged.
According to exchange theory, the very existence of a tie or
link, including
a
communicationtie, suggests the existence of interested
exchange
between
two parties. The content of the communicationsmay be influential,
but even
so the
communicationmust be considered
in the context of an
exchange
of
valued
items, whether hese are
the
communications
hemselves
(i.e.
in terms
of
informationalor symbolic value) or other items.
For
example,
for the
measures
of
centrality
he
proposes
for social
in-
fluence networks, Friedkin(1991) provides
a theoreticalbasis
in
the
form of
coefficients meant to represent one actor's
influence on another.
For an
exchange theorist, however,
this
is
insufficient,
because the
interactional
process goes unspecified. If
the influence does not occur
through exchange
processes
in the
given network, exchange theory suggests
that
relevant ex-
change processes
are
being ignored
and
that the effects
of
the
given
influence
'Exchange theory
does
acknowledge
the
effect of
previously existing ties,
that
is,
of
ongoing
exchange relationships.
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122
COOK& WHITMEYER
channels are
possibly spurious. If the
influence does
correspond o
exchange
processes,
collapsing these into coefficients
obscures
the most interesting
effects of structure.Thusexchange theorysuggests that analysis in light of the
exchange processes
necessarily occurring
(e.g.
in
terms of
the
in-
terdependencies
among the
actors) should be more
revealing of
both the
effects
of structure
and the
underlyingpower and
influence
processes.
Exchange
theorists have
made (and experimentally
demonstrated)
at least
one
importantdiscovery which has had
some influence
in
network
analysis.
This
is the
difference between
positively and negatively
connected
exchange
networks and their
implications for
network-conferred
dvantage see Emer-
son 1972b, Cook et al 1983, Yamagishiet al 1988). We refer to this structural
property
as
polarity.
8
One
reason types of
connections or polarity s
impor-
tant is that for
many networks,
the
distributionof power and
influence may
depend on the
polarity of the network
(Cook
et
al
1983). Thus, Bonacich
(1987)
modified
his
earlier(1972) measureof
centralityso that
it would apply
not just
to positively connected
networks
but to negatively connected
net-
works as
well
(see
also
Marsden 1987; P.
Kappelhoff,
unpublishedpaper9).
The
theoretical reasoning behind
the
concept of
polarity
in
exchange
networktheory can contribute o a solutionof the debate between structural
equivalence
(roughly, having equivalent
ties
to
the same other actors-from
Lorrain & White
1971) and
cohesion (roughly, being
closely tied
to each
other)
as
explanations of the
similarity
of
actors' behavior
(e.g.
Friedkin
1984, Burt
1987, Erickson
1988, Mizruchi
1989,
1990a,
Galaskiewicz
&
Burt
1991). Cohesion is bound into
the veryconcept
of
structural
quivalence
(Borgatti & Everett
1992).
Thus, it is impossible to
distinguish
structurally
between
two-step
(indirect)
cohesion
and
structural
quivalence
(M.
S.
Miz-
ruchi,
unpublished
paper0).
Burt
(1987)
recognizes
this but
makes
it
clear
that at
the heartof
the debate
is a
dispute
over
the
process causing
behavioral
similarity. Cohesion
operates
as
an
infectious process; structural
quivalence
operates
as
a noninfectious
process, perhaps through
imitation.10
Exchange theory suggests that the two
processes are
theoretically
compat-
ible
and possible, even within
the same
network,
and
that which process
is
likely
to
be dominant is
itself affected
by
a
structural
property, namely,
polarity.
In
a
positively
connected
network,
it
is
probable
that cohesion
processes
will
be
stronger.
The common
interestsof the
indirectly
connected
8We introduce a
new term here as a
shorthand or types of connections and/or
degrees
of
connectivity. The term can apply either to
entire networks
(e.g. all relations are
negatively
connected) or to
subnetworks e.g. some relations are
negative and some are positive
as
in
a
mixed
network. See
Yamagishi
et
al
1988.)
9P. Kappelhoff, Power in exchange
systems: a new look at
the Coleman-modelof collective
action, 1990
10M.
S.
Mizruchi, Cohesion,
equivalence,
and
similarity of behavior:
a theoretical
and
empirical assessment, 1990.
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EXCHANGE HEORY
AND NETWORK
NALYSIS 123
actors make it
likely that infectious processes will
lead to similar behaviors
(see Laumann
& Knoke 1989). In a negatively connected
network,
however,
these infectious processes are not likely, and it is probable that structural
equivalence processes will be
more dominant (see
Mizruchi 1990a).
To sum up,
network analysis differs importantly
rom exchange theory
in
two
ways.
First, some network analysts claim to
use a different
individual-
level model, or
to use none. However,
with the notable exception of
biased-
net theory, the individual-level
models of exchange
theorists and network
analysts are fundamentallycompatible,
if not identical.
Second, and
most
critically, network analysts and
exchange theorists
tend to view
certain
aspects of structuredifferently. Their views of what structure s and the
relation between action and structure
are highly
similar. However, they
frequently
differ in their view of
the natureof the ties that make up networks.
For exchange
theorists, network ties consist of exchange
relations
of valued
items, and what
matters causally is the exchange
value (i.e. due to
actors'
interests) of the items exchanged.
Many network
theorists are much more
catholic, and allow a variety of types
of ties independently
of any exchange
of
valued items. There is no theoretical
specification in network analysis
of
the
content of the
tie or social relationship
representedas a link between
actors
or
a line
between
nodes
in
a network. Exchange
theory suggests
ways
of
constructingalternative,
perhaps
superior, explanations
of events within net-
works and of
network effects than
do some of the
more atheoreticalversions
of
network analysis. Whether the
network analysis
or the exchange theory
position is a
more fruitful approach
can only be
resolved through future
empirical and theoretical work.
CONCLUSION
In
the past fifteen years
there
has
been a kind of convergence among
some
of
the
approaches
to social structure
n
sociology.
Two
generally
compatible
approachesare
exchange theory
and networkanalysis. As Collins (1988:412)
points out,
These models
picture
individual
actors
as both
free
and
con-
strained.Humanbeings have
the
capacity
to createor negotiate
whatever
hey
can
at any moment
in time. But
they always
act in a structured ituation,
so
that the consequences and conditions
of their creativity
and
negotiation
are
nevertheless patternedby largerrelationshipsbeyond their control. More-
over, as we have argued
n
this
review, exchange
theory and networkanalysis
have similar conceptions of both
action and structure.
It
is
true that
some
network
analysts
have downplayedany
consideration
of the
individual
actor,
and some exchange
theorists have undertheorized
ocial structure.Neverthe-
less,
the
images
of structureand action Collins
presents
have become
fused
and
are both reflected
in
recent developments
n exchange
network
heory
and
in
much work
in
network analysis.
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124
COOK
&
WHITMEYER
It is a
measure of the progress achieved that earlier statements
regarding
what is central o structural nalysis in
sociology clearly viewed
these alterna-
tives as incompatible (e.g. Blau 1975, Stinchcombe 1975). Nevertheless,
further
theoretical refinements will be required to flesh out
the un-
derdevelopedfeatures of this emerging
general model of social
structureand
action
(see
Hechter 1991).
In
conclusion
it is important o
reiteratea point often lost in debates about
the relative
merits of particular
heoreticalapproaches:no single perspective
or
approach
network analysis and
exchange theory included) can explain all
social and culturalphenomena see, e.g.
Merton 1975). Even the
marriageof
networkand exchange approacheswouldnot be able to lay claim tothe role of
grand theory in
sociology.
Nevertheless, the convergence of
these
two
approaches
does have the potentialto be broader n scope and more
powerful
in
explanatory
erms than either approachalone. For this to happen,
however,
more work needs to
be done clarifying points
of
useful articulationas
well as
areas
of
conflict
or
mutual exclusivity.
Our
review
chapter
s an
attempt
to
initiate this
task.
ACKNOWLEDGMENTS
The authors'
names have been listed
alphabetically. We acknowledge an
earlier
grant
from the
National Science Foundation
SES8519319),
to K.
S.
Cook,
M. R.
Gillmore,
and T.
Yamagishi,
for
support
of the
development
of
exchange network theory.
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