Business and Social Networks

Off-shoring generally carries with its tensions between place and space of production, between standardization and specific costumer-oriented flexibility, between opening international markets and preserving an independent IT industry structure, and between rationalization and active support (Boes 2005a, 57).⁷⁸ Thus, off-shoring is one example of increasing flexibility at the global spatial level of the labor process. In sum, flexibility can be considered as a “basic coping mechanism for existing locational forces” (Castells 1996).

networks are a broadened perspective on organizational structures in general.

Nevertheless, network structures are becoming more and more important because of having a high involvement of know-how, requiring trust, and having the possibility of handling processes quickly (Powell 1990). These are characteristics that are becoming more and more important in informational capitalism overall.

In line with Powell, Rammert also views networks, compared to markets and bureaucracies, as appropriate organizational structures today. He develops theoretical implications of how the network is the current best organizational structure for innovations. The insecurity of markets and the missing coordinating possibilities in terms of differentiated times and tasks of organizations (the state and bureaucracies) lead to the need for network connections. Networks are created by negotiations and trust instead of exchange and allocations (markets) or money and power (bureaucracies).

Rammert emphasizes the advantages of networks, especially concerning the aspect of time. They provide an open time horizon so that heterogeneous organizational parts can therefore stand in timely flexible coorperation (Rammert 1997).

David Knoke’s analysis of changing organizations shows the spectrum of networked organizations (Knoke 2001). In his view, the functionality of networks in organizations extends the organization of interorganizational relationships and high-performing workplaces. Knoke differentiates between four different forms of networks.

Internal network organizations (1) are usually based on informal relations.

“To adjust rapidly to environmental opportunities and threats, an internal network organization must flexibly reconfigure informal subunit ties without waiting for authorization from top management” (Knoke 2001, 207).

Within multinational differentiated networks (2), the relationship between members of the organizations takes the center stage of interest. This network form is important when a global as well as national reaction is necessary and in cases where relatively weak ad hoc structures need to cooperate.

Knoke further defines a virtual organization (3) as a corporation that “extends interunit ties outward.” The lead firm takes center stage in the virtual organization.

Knoke distinguishes virtual organizations from small-firm networks because he sees a higher interdependence and duration of these interunit relationships. He emphasizes the importance of good communication structures and modern ICT in order to provide the necessary flexibility and coherence among members of the virtual organization.

The spherically structured network firm (4) is created by a high collaboration among its members. It does not have a lead firm, but equal relationships among its members provide a high efficiency and velocity when cooperating.

These different types of networks defined by Knoke have different requirements for employees. Generally, theses organizational structures have higher flexibility and insecurity for employees. It is important to differentiate between these forms of network organizations to understand the consequences for organizations and their members.

To describe the network environment Boltanski and Chiapello (2003) developed a theoretical construct of the “project-based polity.” With that they offer an alternative to the explanations of modern organizational structures as networks. They emphasize the importance of the project construct because a project is able to regularize network processes. It is also important that network processes be organized through the project-based polity because it provides limits within the networked world. A project is defined as a temporary connection of diverse persons who function as a highly active partition of the network. Therefore, Boltanski and Chiapello acknowledge that society and organizations are characterized by networks, but they emphasize the important role of the project, as a smaller entity, that brings structure into the networked organization.

Empirical studies concerning the role of networks in the labor process are very limited. In general, the empirical network analysis is much more institutionalized in the United States than in Germany (Jansen 2003, 48). But especially concerning the analysis of labor markets in combination with the topic of social inequality, the empirical network analysis has recently becomes more important again (Jansen 2003, 254ff.). The following paragraphs do not present empirical results in the sense of an empirical network analysis, but give some insights in the empirical role of networks.

Especially regarding the information workforce, social networks play an important role. This was empirically supported by Batt et al. (2001) for the group of

“new media” professionals. New media refers to forms of electronic communication enabled by computer and network technology. Concerning their job search and employment security, social networks are very important. Interestingly, workers over 40 benefit more from professional associations in finding a job than from social networks.

Also, women and minorities depend less on personal networks. Therefore, the dependence on personal networks may be responsible for labor inequalities. In sum, to improve employment sustainability personal networks and associations are central for

new media professionals. The role of government policy is particularly important for achieving better employment sustainability (Batt et al. 2001).

In her article about open labor markets and learning in Silicon Valley, Saxenian strikingly points out how different the Silicon Valley economy functions compared to more traditional economic areas. The reasons for this difference are the loosened boundaries between firms and the high dependence on interfirm and social networks. A regional labor market that focuses on regional relationships rather than internal firm relationships is advantageous for the economic success within Silicon Valley. Silicon Valley is a good example of the social embeddedness of labor markets.⁷⁹ “… [C]areer mobility in Silicon Valley depends centrally on participation in local networks of social relations” (Saxenian 1996, 24). Important for the functioning of Silicon Valley’s networks are the relatively small distances that have to be covered when changing jobs.

Thus, reorienting professionally did not necessarily require major changes in private life. This is different from many other regions in the United States and strikingly shows how important regions still are and that they may become even more important for current labor processes despite the aspect of globalization.

In Germany, the growing importance of personal networks has impacts on the public labor administration and labor market integration. A recent study shows how this connection leads to the necessity of integrating personal networks into the approaches of public job consulting and public employment service (Wirth 2006).

The various approaches explaining the nature of networks all present helpful points of contact for the further analysis. First, networks need to be distinguished from hierarchies and markets. Projects help organizing and limiting network actions. The detailed description of various types of networks helps to classify specific activities within the labor process. Overall, the characteristics of networks can be summarized as being more flexible than other organizational structures. Networks can react flexibly to a changing environment and adapt better to changes.

4.2.1 Communication in Network Space

Communication has always been an important component of the labor process.

However, it is incontestable that the role of communication changes within modern

79 The concept of social embeddedness of labor markets was first introduced by Granovetter (see Granovetter 1988, 1995).

labor processes. The role of communication for the labor process is changing especially within network spaces as a new spatial surrounding.

In a four-field-matrix Micheli summarizes the relationship between communication and labor markets using the variables of “person” and “Internet.” There, the role of communication changes from being very personal (within the person-to-person relation) and being rather imperson-to-personal (within the Internet-to-Internet relation).

Within the sphere of information, any market can be categorized within this scheme.

“Person-to-Person” work would involve less routine work, whereas “person-to-Internet”

work would involve ways of learning that depend on social networks with personal initiative or self-learning elements. Even though the Internet itself is a network in which distance is unimportant, it is quite significant where the users are located physically.

“Person-to-person” work would lead to localization being extremely relevant, and the work would take place within a local territory. On the other hand work addressed by the Internet would operate at a global scale (Micheli 2002, 16ff.).

This analytically described relation was also mentioned by some of the individuals I interviewed. They report about coworkers with “call center mentality” and distinguish this mentality from their own mentality, which they describe as “personal support mentality.” They think the kind of mentality an employee brings to the job depends on his or her personality. But they also mention that those colleagues who used to work for a company that was bought by their own company tend to have the “call center mentality,” because this is how the other company was set up. In their assessment, however, person-to-person communication is important and necessary for a great portion of their work process.

The restructuring of the labor processes is visible within global spatial changes of labor. The emergence of global cities has influence on the labor process. Concrete examples of global restructuring of labor are the outsourcing and off-shoring trends as well as working within networks and, particularly, how communication structures change within networks. There are other processes on a spatial level that do not operate on a global scale. The changing office space is a good example of how global development impinges on the labor process on a smaller scale as well.