The Social Structure of Competition : Access, Timing, and Referrals

Information benefits occur in three forms: access, timing, and referrals. Access refers to receiving a valuable piece of information and knowing who can use it. Information does not spread evenly across the competitive arena. It isn't that players are secretive, although that too can be an issue. The issue is that players are unevenly connected with one another, are attentive to the information pertinent to themselves and their friends, and are all overwhelmed by the flow of information. There are limits to the volume of information you can use intelligently. You can keep up with only so many books, articles, memos, and news services. Given a limit to the volume of information that anyone can process, the network becomes an important screening device. It is an army of people processing information who can call your attention to key bits—keeping you up-to-date on developing opportunities, warning you of impending disasters. This second-hand information is often fuzzy or inaccurate, but it serves to signal something to be looked into more carefully.

Related to knowing about an opportunity is knowing whom to bring into it. Given a limit to the financing and skills that we possess individually, most complex projects will require coordination with other people as staff, colleagues, or clients. The manager asks, "Whom do I know with the skills to do a good job with that part of the project?" The capitalist asks, "Whom do I know who would be interested in acquiring this product or a piece of the project?" The department head asks, "Who are the key players needed to strengthen the department's position?" Add to each of these the more common question, "Whom do I know who is most likely to know the kind of person I need?"

Timing is a significant feature of the information received by the network. Beyond making sure that you are informed, personal contacts can make you one of the people who is informed early. It is one thing to find out that the stock market is crashing today. It is another to discover that the price of your stocks will plummet tomorrow. It is one thing to learn the names of the two people referred to the board for the new vice-presidency. It is another to discover that the job will be created and that your credentials could make you a serious candidate for the position. Personal contacts get significant information to you before the average person receives it. That early warning is an opportunity to act on the information yourself or to invest it back into the network by passing it on to a friend who could benefit from it.

These benefits involve information flowing from contacts. There are also benefits in the opposite flow. The network that filters information coming to you also directs, concentrates, and legitimates information about you going to others.

In part, this network does no more than alleviate a logistics problem. You can be in only a limited number of places within a limited amount of time. Personal contacts get your name mentioned at the right time in the right place so that opportunities are presented to you. Their referrals are a positive force for future opportunities. They are the motor expanding the third category of people in your network, the players you don't know who are aware of you. Consider the remark so often heard in recruitment deliberations: "I don't know her personally, but several people whose opinion I trust have spoken well of her."

Beyond logistics, there is the issue of legitimacy. Even if you know about an opportunity and can present a solid case for why you should get it, you are a suspect source of information. The same information has more legitimacy when it comes from someone inside the decision-making process who can speak to your virtues. Candidates offered the university positions with the greatest opportunity, for example, are people who have a strong personal advocate in the decision-making process, a person in touch with the candidate to ensure that both favorable information and responses to any negative information get distributed during the decision.