Throwing sheep in the boardroom, society's answer to online social networking and economic crisis
Source: BI-ME , Author: BI-ME staff
Posted: Tue October 21, 2008 12:00 am

INTERNATIONAL. In the fallout of the global financial meltdown, it's difficult to think of a positive side to the economic crisis. But it actually might be good news for Web 2.0 social networking, according to a new book to be released next month.

Throwing Sheep in the Boardroom, by Matthew Fraser and Soumitra Dutta, is the first comprehensive book written for a wide audience about the powerful trend that is reshaping your life: the Web 2.0 social networking revolution

Social networking sites are a global phenomenon. Sites like MySpace and Facebook now boast hundreds of millions of members. Online social interaction has become an indispensible part of their daily lives. This book examines the powerful forces driving this social e-revolution. It also describes the equally powerful reactions to it, and makes predictions about its far-reaching consequences. As the book’s subtitle states, Throwing Sheep in the Board is about how the Web 2.0 revolution is transforming your life, your work, and your world.

It would reasonable to predict that social networking sites like LinkedIn, Plaxo, Ning — and even Facebook — will see their membership ranks soar in coming weeks and months as widespread insecurity drives people to connect with others to boost their social capital.

There can be no doubt that, as people worry about their financial security and career situation, many will feel compelled to plug into online social networks. Anxious about their institutional status inside vertical hierarchies, people will turn to the social dynamics of horizontal networks.

The empirical data already appears to validate this hypothesis. In the Spring when petrol prices were spiking, Nielsen released findings that suggested people were networking online to “cope” with hard economic times. LinkedIn meanwhile has been boasting soaring membership numbers, reaching 28 million worldwide. Nobody will be surprised to learn that many of LinkedIn’s new sign-ups are coming from the financial sector, whose membership has doubled. It may be hard to feel sorry for bonus-bloated investment bankers, but many are frantically dusting off their CVs and rushing to online social networks in the hope of repositioning their careers.

A new LinkedIn survey has revealed that 42% of the network’s members feel their job security has been impacted by the economic crisis, while 13% say it’s too soon to tell. In other words, more than half of LinkedIn’s worldwide membership is scared.

Close and weak social ties

Some have dismissed LinkedIn as “Facebook for losers”, in other words, for opportunists who are looking only out for themselves in the job market. This attitude underlines two fundamental tensions that the authors analyse in some detail in Throwing Sheep in the Boardroom. The first is the tension between rational and non-rational motivations to belong to social groups. The second is between “close” and “weak” social ties.

Motivations for joining social networking sites are varied and complex. At risk of oversimplifying, we can classify motivations into two broad categories: rational and non-rational. Professionals who join sites like LinkedIn are primarily motivated by rational calculations related to their career interests. Most teenagers who collect “friends” on MySpace, on the other hand, are not looking to improve their career prospects. Their social interaction is motivated primarily by a non-rational instinct to forge social bonds based on common values, beliefs, passions and so forth.

Most of us like to feel connected to others through close-knit ties or shared interests and passions. Yet ironically, we frequently depend on people with whom we maintain only “weak” ties, especially when we are looking for a job. The strength-of-weak-ties theory was famously elaborated by American sociologist Mark Granovetter. He defined “weak ties” as social relationships characterised by infrequent contact, an absence of emotional closeness, and no history of reciprocal favours. In professional parlance, you might say people in your “extended network”.

Granovetter found that we rely on “weak tie” connections much more often than we think. Most intelligent job-seekers don’t turn to close friends or family for jobs, unless they are expecting to benefit from the advantages of cronyism or nepotism. Most turn to their extended network. And most business networks are based on relatively “weak tie” associations.

Which brings us back to the economic downturn. When out-of-work investment bankers scramble to sign up to LinkedIn, they are making a rational calculation. They’re not looking for friends; they are seeking to leverage the strength of weak ties.

What happens, however, when people start invading Facebook where “friend” values are embedded in the site’s social etiquette? It’s easy to see how a tension between non-rational and rational motivations could create conflict on Facebook. And yet Facebook is cluttered with self-promoters, career artists, and marketing entrepreneurs. Can these people really be considered “friends”? And just how many Facebook “friends” can we reasonably have anyway?

Anthropologists tell us that it’s impossible to maintain stable social relationships with more than 150 people. This is widely known as “Dunbar’s Number“, named after British anthropologist Robin Dunbar, who argued that the necessary ritual of “social grooming” breaks down in groups whose membership exceeds roughly 150.

If we apply Dunbar’s figure to all social networking sites, any “friend” list that exceeds 150 is not credible, and it pushes social networking into the zone rational calculation. Maintaining a professional network of more than 150 connections on LinkedIn might be plausible, but it would appear to be humanly impossible to maintain social relations with more than 150 different people. And yet many Facebook profiles feature “friend” lists that not only surpass that figure, but double, triple, and quadruple it.

Some Facebook “friend” lists count in the thousands. Which leads to the question: is the virtual world exempt from basic laws of socio-anthropology?

While we ponder that question, it’s a safe bet that the economic downturn will boost sign-ups for sites like LinkedIn and Facebook. And that this membership drive will further blur the line between rational instincts to connect socially with like-minded people and rational calculations to build social networks for self-interested reasons.

Popular culture and new business models

Combining a pop sociology approach with rigorous analysis rich in economic history and organizational behaviour, authors Matthew Fraser and Soumitra Dutta have written a lively and provocative book about the global popularity of social networking platforms, from MySpace and Facebook to YouTube, Wikipedia and Twitter. Throwing Sheep in the Boardroom is unique because the authors, both academics at the prestigious international business school INSEAD, have merged their particular perspectives in an analysis that is refreshingly original, often unexpected, and always insightful. Fraser is an acknowledged expert on the pop cultural industries, and Dutta is a world-renowned authority on information technology and innovation.

Providing examples from many different cultures, the authors argue that Facebook-style social sites represent a profound e-ruption whose lessons for market forces, business organisation, and democratic institutions will be far-reaching. Throwing Sheep in the Boardroom assesses both the real-time impact of Web 2.0 sites on social interaction and consumer behaviour. It offers fascinating case studies to illustrate how social networking sites are transforming the dynamics of business models, organisational behaviour, and civic participation.

The book argues that while the Web 2.0 revolution has reached a tipping point socially, especially among young members of 'Generation V' who feel completely at ease in the online world, it is meeting powerful forces of resistance inside organisations , especially corporations and government bureaucracies. The authors examine the underlying reasons behind this “fear factor”, making the case that senior managers must understand the dynamics of the Web 2.0 revolution because it will soon be sweeping through their corridors whether they like it or not.

The book is organised around three major themes: identity, status, and power. The authors argue that the explosion of Web 2.0 social platforms is transforming how our identities are shaped, how status is assigned socially and inside organisations, and how power is distributed and exercised. In cyberspace, identities are becoming increasingly multi-faceted, status is becoming more democratically based on performance, and power is being diffused from centralised vertical structures to horizontal networks.

These are powerful changes with profound, far-reaching implications for how we organise our lives, our institutions, and our society.

Note: Matthew Fraser is a Senior Research Fellow and Soumitra Dutta is Roland Berger Chaired Professor of Business and Technology, both at INSEAD. Their forthcoming book, 'Throwing Sheep in the Boardroom: How Online Social Networking Will Change Your Life, Work and World', is published by Wiley.



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