Friends in High Places: The Effects of Social Networks on Discrimination in Salary Negotiations

Administrative Science Quarterly,  June, 2000  by Marc-David L. Seidel,  Jeffrey T. Polzer,  Katherine J. Stewart

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Hypothesis 2 (H2): Job candidates whose social networks include a tie to the hiring organization will negotiate larger increases to their initial salary offers than candidates who do not have a tie to the organization.

Social Networks of Minorities

Compared with demographic majority members, members of demographic minority groups may have informal networks in organizational settings that are limited along several dimensions (Brass, 1985; Morrison and Von Glinow, 1990; Ibarra, 1995). While most research on minorities' informal networks has examined relationships within single organizations, many of the mechanisms used to explain how network differences emerge should generalize to broader networks across multiple organizations. Perhaps minorities' biggest constraint is having available fewer people of the same race with whom they can form ties, presenting a structural impediment to the formation of same-race ties. Because same-race ties are likely to be stronger than cross-race ties (Tsui and O'Reilly, 1989; Thomas, 1990), racial minorities are likely to have fewer strong ties within their organization than Whites (Ibarra, 1993, 1995). To compensate for the relatively low support provided by the predominantly cross-race ties within their own organization, members of minority groups may seek supportive relationships with same-identity-group members from other organizations (Thomas and Alderfer, 1989; Thomas and Higgins, 1996). This may lead minority group members to have a relatively high number of extraorganizational relationships (Thomas, 1990; Ibarra, 1995), but within any single firm minorities face the same network constraint of limited opportunities for same-race ties as within their own organization. That is, minority job candidates, on average, are less likely than their White counterparts to have a preexisting social tie to any one firm that has a job opening. Thus, the same reasoning that explains network differences within single firms in the United States would also apply to minorities' networks within any particular firm to which they apply as a job candidate. Further, to the extent that minorities have less developed informal networks within an organization (Ibarra, 1995), they are less likely to be included in informal events with organizational members outside of work. Such events may be fertile ground for meeting people from other companies and extending both same-race and cross-race networks. Thus, disadvantageous informal networks within organizations may directly contribute to limited informal and professional networks across organizations. For these reasons, we predict:

Hypothesis 3 (H3): Members of racial minority groups will have fewer ties to an employing organization than their White counterparts.

Hypothesis 1 suggested that members of racial minorities would be disadvantaged in negotiation for a variety of reasons, including negative stereotyping, interpersonal bias, and information differences. Taking into account hypotheses 2 and 3, we expect differences in social networks among racial groups to contribute to differences in negotiated salary increases. If network ties lead to better negotiated outcomes (hypothesis 2), and professional networks are less developed for members of racial minority groups (hypothesis 3), we expect members of racial minority groups to obtain lower negotiated salary increases even if interpersonal biases are absent. More formally: