Organizations are complex social systems comprised of both formal and informal structures. The consequences of formal structures are fairly well-understood. However, informal structures also exist in every organization and can have equally powerful impacts (positive and negative) on organizational performance. In short, informal structures are the patterns of interactions (networks) that emerge and become embedded in the organization over time. These structures can be quite complex, consisting of multiple layers of networks, such as those based on work duties, technical expertise, friendship, demographic similarity, and and even ideology. One need only consider how people seek advice or information (or block it) to understand the potential power of informal social structures. Still, it’s the rare organization that tries to understand the factors that shape informal interactions.
Social network analysis (SNA) is ideal for assessing informal structures. It dates back to the 1950s and the application of specialized mathematics to the fields of anthropology and social-psychology. SNA provides both a perspective on organizations and a set of tools for analyzing them. Basically, it considers all social systems, including organizations and even groups of organizations, as a network of nodes joined by various relationships. SNA measures (e.g., centrality, density, equivalence, clustering) identify network qualities and positions that help explain their impacts on the organization, providing an unparalleled view of previously hidden informal structures.