Social networks and organizational similarity: an analysis of similarities in chairperson remuneration among Sweden's publicly traded firms

Abstract

This article argues that information about di!erent social networks can supplement more economically based explanations oforganizational conduct, thus yielding more precise predictions about organizational behavior. This study "nds that "rms tend to remunerate their chairpersons more similarly when the "rms are part ofthe same social network. Furthermore, the results show consistently that multiple networks operate as channels ofsocial in#uence that a!ect organizational behavior. The implication ofthe "ndings is that social embeddedness is a factor that has to be taken seriously in any attempt at explaining the rationale for a "rm's conduct in a group of "rms belonging to the same system.