“Social Embeddedness” Viewed from an Institutional Perspective. Revision of a Core Principle of New Economic Sociology with Special Regard to Max Webe
“Social Embeddedness” Viewed from an Institutional Perspective. Revision of a Core Principle of New Economic Sociology with Special Regard to Max Webe

Summary/Abstract: Starting by the very fact that Mark Granovetter's notion of "social embeddedness" became very successful by establishing new economic sociology in the 1980s yet it is argued that current economic sociology needs to work on a stronger connection to institutional arguments. It is shown that this can be based on new theoretical developments by linking micro and macro level. This article reconstructs Granovetter's attempt of working within an action-based framework that has strong ties to the work of MaxWeber as well as to some parts of new institutionalism. The particularity of Granovetter's approach is seen in his assumption that individuals' interests as well as their economic actions are socially embedded in "networks of social interactions" that influence the economic outcome. With regard to Max Weber and new institutionalism, it is then argued that Mark Granovetter omits to carefully consider both firstly how mutual expectations defined within social relations are affected by more general social expectations (the institutional framework) and secondly what kind of coordination problems are precisely solved by social relations through information or expectation. But this would be important for a more complex and more realistic picture of economy. Therefore, it is recommended to analyze the interplay of different social mechanisms-social capital, trust, legitimacy, hierarchy, social entrepreneurs-that work either through information in a network, group norms or generalized expectations in an wider institutional framework. In conclusion, a methodological suggestion is made by combining historical-empirical work with theoretical arguments.

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