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This study presents a theoretical framework for studying the effects of extra-group social networks on teams. Building on a transaction cost economics framework, an individual’s extra-group friendship network centrality is proposed to relate to communication network centrality. This is because the individual will utilize the network to establish an informational hierarchy thereby reducing the transaction costs associated with finding information and resources. Through this network the individual will be perceived as a higher team contributor. The team effects of extra-group network centrality are proposed as higher team performance and innovativeness. Future research opportunities and implications for practical use are presented.

Information, Resources and Transaction Cost Economics: The Effects of Informal Network Centrality on Teams and Team Performance