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

This article argues that information about different social networks can supplement more economically based explanations of organizational conduct, thus yielding more precise predictions about organizational behavior. This study finds that firms tend to remunerate their chairpersons more similarly when the firms are part of the same social network. Furthermore, the results show consistently that multiple networks operate as channels of social influence that affect organizational behavior. The implication of the findings is that social embeddedness is a factor that has to be taken seriously in any attempt at explaining the rationale for a firm's conduct in a group of firms belonging to the same system.