SOCIAL CAPITAL: THE INVISIBLE KEY IN ORGANIZATIONS

The Definition, Development and Measurement

Helene Antoniette Uy

Srikanth Natarajan

Zhu Zhichao

Introduction

Social Capital Happens every day

Network and relations that build communities, groups

Organizational Social Capital

Relationships between employees, employee to organization and to other

organizations

Characteristics of Organizational Social Capital

It is an asset It is a capital that cannot be traded The more you use, the more it grows Components

Associability Trust

Chicken and Egg Scenario:

Did trust create social capital?

Or did social capital create trust?

Importance of Organizational Social Capital

Growth to the individual “No man is an island”

Open opportunities Formulation of personal best practices Contacts with the right resources

Overcome barriers such as politics More time to focus on the organizational

goal

Formation of Social Capital

Communication & Information Exchanges

Relationships

Four Dynamic Factors Stability Interdependence Interaction Closure

Four Dynamic Factors

Stability reflects the continuous investment by the organization

Stability is Enabler of high level of continuity in social structure

- Common approaches:

Promote stability through implementing human resources management

Promote stability through preserving management cohesion

Interdependence is the yardstick of organization management

Interdependence is a necessity of maintaining social capital

Common approaches:

Create favorable context for interdependence to survive

Establish association of employees to the organization

Four Dynamic Factors

Interaction is the most perceivable factors

Interaction determines social relations, later affect the formation of social capital

Common approaches:

Invest space for social interaction

Invest time for social interaction

Closure refers to social community boundaries

Closure facilitates the establishment of organizational norms and identification

Common approach:

Increase the density of linkages inside organization

Issues and Challenges

‘The ties that bind could be the ties that blind’

- Cohen & Prosak

High dense of social capital could lead to potential negative consequences:

Reluctant to accept new members Reluctant to say ‘no’ to one another inside the network Reluctant to listen from the outside Financial challenges

Need for measuring Organization Social Capital

Plays a keep role in identifying the social gaps within an organization.

Helps to leverage this knowledge to develop and implement steps to enhance social capital within an organization

Criteria to measure Organization ‘s Social Capital

Network Types

In general there are two types of network. Formal

Community Colleagues Teamwork

Informal

Network Size and Capacity Extensive positive interactions between employees/inter-departments/intra-

departments will enhance Organizational Social Capital

Frequency of Interactions

Increased frequency of positive interactions helps increasing Formal Trust Associability

Quality of Social Relation

Quality of social relation can be judged by the following aspects

Intensity of Communication Information Transferred Resource Sharing Manner of Interactions Culture

Criteria to measure Organization ‘s Social Capital

Methods to measure Organization‘s Social Capital

The Name Generator/Interpreter Standardized Between Index Degree Centrality Social Capital Assessment Tool Social capital is assessed using various levels of categories Micro Level Macro Level

• Community Profile

• Household Survey

• Organization Profile

Challenges in the Measurement of Social Capital

Identifying types of network to promote trust and coordination Challenges in assessing trust and norms. Evaluation of factors that result in collective action Limitations in using grading as a scale to measure social capital.

Key Issues involve identifying then network type and dimensions of

Measurement.

Structural Social Capital and Cognitive Social Capital Bonding Social Capital and Bridging Social Capital Discrepancies Horizontal Organization and Vertical Organization Homogenous and Heterogeneous Organization.

Conclusion

It’s true value should be understood for organizations to have an edge in knowledge generation What is social capital The dynamics that influences its growth Measurements of success

Social capital will always have trust Social capital unlocks barriers that

hinders knowledge sharing

Thank you!