Where does embeddedness collide?

Economic action is embedded in ongoing networks of interpersonal relations, and cannot be read as the behaviour of atomized, self-interested actors. Granovetter proposed the term in 1985 against two opposing errors: the undersocialized account of neoclassical economics, in which atomized actors pursue self-interest, and the oversocialized account, in which internalized norms fully determine what people do. Both strip out the concrete, continuing relations in which real transactions actually sit. Granovetter took the word from Polanyi, who had used it to argue that the market economy was, historically, submerged in social relations, and turned it toward the structure of interpersonal ties. Embeddedness in this meaning is a property of the network in which action occurs, not a trait of any individual.[1][5]

Unit

Economic action within a network of relations

Recovery means

Not applicable

Measured by

Analysis of the concrete social ties in which a transaction is conducted; network and ethnographic description

A quality of the ties between firms, running from arm's-length market ties to embedded ties marked by trust, fine-grained information transfer, and joint problem-solving. Uzzi built the distinction in 1997 from an ethnographic and network study of New York apparel firms, and named the paradox in his title: embedded ties raise a firm's performance up to a point and depress it beyond, because a firm woven entirely into embedded ties loses access to outside market information. Embeddedness here is structural and relational, a feature of the connections between organizations, and its measure is the composition of a firm's tie portfolio, not anything asked of a person.[2]

Unit

The ties in a firm's network

Recovery means

Not applicable

Measured by

Network measures of the mix of embedded and arm's-length ties; firm outcomes such as survival

The accumulated forces that keep an individual employee in a job, organized by Mitchell, Holtom, Lee, Sablynski, and Erez in 2001 into three components crossed with two domains: the links a person has to other people and activities, the fit between the person and the job or community, and the sacrifice that leaving would entail, each considered both on the job and off it. The construct predicts voluntary turnover beyond job satisfaction and perceived alternatives. It borrows Granovetter's word as a metaphor for attachment, but its referent is one employee's situation, captured by self-report, and it says nothing about economic action or network structure.[3]

Unit

An individual employee's attachment to a job

Recovery means

Not applicable

Measured by

Composite self-report scale of links, fit, and sacrifice, on and off the job; voluntary turnover as the criterion

The entrepreneur's embedding in the social structure of a local community, and the effect of that embedding on how a venture is created and run. Jack and Anderson followed rural Scottish entrepreneurs in 2002 and argued that becoming part of the local social structure gives an entrepreneur access to resources and knowledge that outsiders cannot reach, while also constraining what the venture may do. Embeddedness here returns to Granovetter's notion of action within social relations, but relocates it to the individual founder inside a bounded community, and treats it as a process the entrepreneur enacts over time rather than a fixed property. This is the community meaning used in entrepreneurship research.[4]

Unit

An entrepreneur's ties within a local community

Recovery means

Not applicable

Measured by

Qualitative study of how entrepreneurs enter and draw on local social structure; case and ethnographic accounts