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Introduction 15. Contributions Using Structural Sociology and Networks. 16 Smelser/Swedberg
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Introduction 15
by " the mobilization of resources for collective action" (Granovetter 1992, 6).
Granovetter's argument on embeddedness has been widely discussed and sometimes criticized. An attempt to elaborate it can be found in the work of Brian Uzzi, who argues that a firm can be " under- embedded" as well as " overembedded, " and that a firm is most successful when it balances between arm's-length market ties and more solid links (Uzzi 1997). Several other critics have pointed out that Granovetter omits consideration of many aspects of economic action, including a link to the macroeconomic level, culture, and politics (e. g. Zukin and DiMaggio 1990; Zelizer 1988; Nee and Ingram 1998). Zukin and DiMaggio suggest that to remedy this lacuna, one should not only talk of " structural embeddedness, " but also of " political, " " cultural, " and " cognitive embeddedness. "
Contributions Using Structural Sociology and Networks
Structural sociology has played a crucial role in promoting and adding to network analysis in sociology, including economic socioloy. This approach is centered around the proposition that the relations of persons and positions are crucial to the social process (Mullins and Mullins 1973, 251-69). Its practitioners often use a mathematical approach, focus on social mechanisms, and avoid regression analysis and similar quantitative methods. Its most prominent scholars are Harrison White and his students, such as Mark Granovetter, Scott Boorman, and Michael Schwartz. White's work in economic sociology has concerned networks, vacancy chains, and markets. He begins his analysis from people's physical dependence on their surroundings but notes that interests are soon embedded in social relations (White 1970, 1981, 1992, 24).
Network studies have been at the center of the new economic sociology. Many studies have been made of the links between corporations and, more generally, within so-called industrial districts (Ebers 1997; Saxenian 1994). Burt (1992) analyzes competition by drawing on Simmel's idea that you are in a good position if you can play out two competitors against one another (tertius gau- dens, or " the third who benefits" ). Brian Uzzi's study of embeddedness from 1997 also makes use of networks, as does Granovetter's essay (1994) on business groups. A multitude of other fine studies could be mentioned (see, e. g., Powell and Lisa-Doerr 1994, this volume). One criticism of the
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network approach is that it has ignored the role in economic life of politics and culture (Fligstein 1996, 657).
Contributions Using Organization Theory
New economic sociology has been very successful in using organization theory to explore a number of important topics, such as the structure of firms and the links between corporations and their environments. One fine example is Nicole Woolsey Biggart's Charismatic Capitalism (1989), which deals with a very special type of organization: direct selling organizations, such as Tupperware and Mary Kay Cosmetics. Three theoretical approaches in organization theory have been especially important for the development of new economic sg- ciology: resource dependency, population ecology, and new institutionalism.
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Resource dependency, as its name suggests, rests on the postulate that organizations are dependent on their environments to survive. An example of this approach is work by Burt (1983), who suggests that three important factors that affect profits are die number of suppliers, competitors, and customers. The more " structural autonomy" a firm has, the higher its profits; that is, a firm with many suppliers, few competitors, and many customers will be in a position to buy cheaply and sell expensively.
In population ecology the main driving force of organizations is survival. It has been shown that the diffusion of an organizational form typically passes through several distinct stages: a very slow beginning, then explosive growth, and finally a slow settling down (e. g., Hannan and Freeman 1989). Individual studies of this process in various industries, such as railroads, banks, and telephone companies, fill a void in economic sociology (e. g., Carroll and Hannan 1995).
New institutionalism is strongly influenced by the ideas of John Meyer and is centered around what may be called cultural and cognitive aspects of organizations (see Powell and DiMaggio 1991). Meyer argues that organizations seem much more rational than they actually are, and that specific models for organizing activities may be applied widely—including to circumstances they do not fit. It has been argued that the strength of new institutionalism is its exploration of " factors that make actors unlikely to recognize or to act on their interests" and its focus on " circumstances that cause actors who do recognize and try to act on their interests to be unable to do so" (DiMaggio 1988, 4-5). The possibility of uniting a more traditional interest analysis with new institutionalism is exem-
plified by Fligstein's (1990) study of the large corporation in the United States. Fligstein notes that the multidivisional form of organization spread for mimetic reasons—but also because this organizational form made it easier for firms to take advantage of new technology and the emerging national market.
Contributions Using Cultural Sociology
A group of economic sociologists is committed to a cultural approach, and a substantial number also refer to symbols, meaning structures, and the like in their studies of the economy. Cultural economic sociology owes much to the work of its two most prominent representatives, Viviana Zelizer and Paul DiMaggio. In a programmatic statement Zelizer criticized contemporary economic sociology for its tendency to reduce everything to social relations and networks—" social structural absolutism" (1988, 629). She also rejected the alternative of reducing everything in the economy to culture (" cultural absolutism" ). The goal should be to take economic and cultural factors into account. DiMaggio has been similarly skeptical of a full-scale cultural analysis of the economy, but argues that it should include a " 'cultural' component" —but not more (DiMaggio 1994, 27; cf. Zukin and DiMaggio 1990, 17-18). According to DiMaggio, culture can be either " constitutive, " referring to categories, scripts, and conceptions of agency, or " regulative, " referring to norms, values, and routines.
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Viviana Zelizer's work on culture occupies a central position (however, see also Dobbin 1994; Abolafia 1998). Her first major work (1979) was a study of life insurance in the United States, with special emphasis on the clash between sacred values and economic values. Over time the economic emphasis came to dominate. Later Zelizer published Pricing the Priceless Child {1985), which describes a similar movement, but this time in reverse. Children, who in the nineteenth century had had an economic value, would in the twentieth century increasingly be seen in emotional terms and regarded as " priceless. " In her most recent major study (1994), Zelizer argues that money does not constitute a neutral, nonsocial substance, but appears in a variety of culturally influenced shapes (" multiple monies" ).
Contributions Building a Historical and Comparative Tradition
A number of comparative and historical studies, bringing Max Weber's monumental works to
mind, have been an ingredient of recent economic sociology (see Dobbin, chap. 2 in this volume). A few of the works already mentioned draw on historical material (e. g. Granovetter and McGuire 1998; Zelizer 1979, 1985, 1994). To this list should be added Bruce Carruthers's study of finance in seventeenth- and eighteenth-century England, and several attempts by economic sociologists to challenge Alfred Chandler's account of the rise of the large industrial corporation in the United States. Carruthers is interested in showing that not only do economic interests influence politics, but also the opposite: " political interests influence economic action" (1996, 7). Using primary material on the trade in shares in the East India Company in the early 1700s, he establishes that political ambitions clearly influenced the^ choices of buyers and sellers. The critique of Chandler has similarly emphasized the state's role in the emergence of the large industrial corporation. Chandler's key idea—that recent advances in technology had made it necessary around the turn of the last century to reorganize the large corporation as a multidivisionai unit—has also been criticized (e. g. Fligstein 1990; Roy 1990, 1997; Freeland 1996, 2001).
Explicitly comparative studies are fewer in number. One notable work is forging Industrial Policy: The United States, Britain, and France in the Railway Age (1994) by Frank Dobbin (see also Evans 1995). The author argues that industrial policy in these three countries between 1825 and 1900 differed on important points. In the case of the United States, local self-rule and a weak federal state meant that railway regulation translated into anti- monopoly policy and attempts to safeguard private initiatives. The tradition of a centralized state in France inspired strong interference from the authorities in the planning and running of the railroads. And the tradition of safeguarding elite individuals in Britain helped to bring about an industrial policy that shielded the small, entrepreneurial firm.
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