Ronald S.Burt – Brokerage & Closure

The advantage created by location in social structure is called Social Capital. As markets, organizations, and careers become more and more dependent on informal, discretionary relationships, who has it, how it works, and how to develop it have become key questions. Everything else flows through the informal: advice, coordination, cooperation friendship, gossip, knowledge, trust, and accountability.

Informal relations have always mattered to us. What is new is the range of activities in which they now matter, and the emerging clarity we have about how they create advantage for certain people at the expense of others. This is done by a company.

Ronald S. Burt explores the nature of brokerage and closing in this area. The activity of people who live at the intersection of social worlds, who have a vision advantage of seeing and developing good ideas, an advantage which can be seen in their compensation, recognition, and the responsibility they’re tasked with in comparison to their peers, is called Brokerage. People who tighten coordination in a closed network of people do well as a complement to brokers because of the trust and alignment they create. It is possible to broker and close the transaction. explores how these elements work together to define social capital, showing how in the business world reputation has come to replace authority, pursued opportunity assignment, and reward has come to be associated with achieving competitive advantage in a social order of continuous disequilibrium.

Ronald S.Burt is the author of Brokerage & Closure.