ORGANIZATIONAL LEARNING ANDSOCIAL C

ORGANIZATIONAL LEARNING AND
SOCIAL CAPITAL
Human capital refers to a person’s education, skills, and background necessary
to be productive in an organization or profession. However, sociologists
such as Coleman (1994) and Granovetter and Swedborg (2001) argue that
there is much more to explaining the differences in individual success than individual
characteristics alone. The concrete personal relationships and networks
of relations generate trust, establish expectations, and create and enforce
norms. These webs of social relationships influence individual behavior and
ultimately organizational success. The term social capital has been coined to
134 KNOWLEDGE MANAGEMENT IN THEORY AND PRACTICE
refer to the institutions, relationships, and norms that shape the quality and
quantity of an organization’s social interactions (Lesser and Prusak, 2001).
Social capital is not just the sum of the individuals that comprise an organization;
it is the glue that holds them together.
Nahapiet and Ghoshal (1998) define social capital as “the sum of the actual
and potential resources embedded within, available through, and derived from
the network of relationships possessed by an individual or social unit. It thus
comprises both the network and the assets that may be mobilized through that
network” (p. 243). While the concept is still evolving, there have been increasing
calls for expanded “investment” on the part of business, government, and
other organizations to promote the development and maintenance of social
capital. Social capital facilitates the creation of new intellectual capital. Organizations,
as institutional settings, are conducive to the development of high
levels of social capital. It is because of their denser social capital that firms,
within certain limits, have an advantage over markets in creating and sharing
intellectual capital.
Knowledge-sharing communities are the primary producers of social capital,
as they provide the opportunity for individuals to develop a network with
members who share similar professional interests. The community provides a
“Who’s who” in the form of yellow pages to help make connections between
members. The community provides a reference mechanism to quickly enable
members to evaluate content, solve problems, and make decisions based on
vetted, validated, and current knowledge. Social networks can increase productivity
by reducing the costs of doing business. Social capital facilitates coordination
and cooperation. At the same time, social capital has an important
“downside” (Portes and Landholt, 1996): communities, groups, or networks
that are isolated, parochial, or working at cross-purposes to the organization’s
collective interests.
A broader understanding of social capital accounts for both the positive and
negative aspects by including vertical as well as horizontal associations between
people, and includes behavior within and among organizations, such as firms.
This view recognizes that horizontal ties are needed to give communities a sense
of identity and common purpose. However, without “bridging” ties that transcend
various social divides (e.g., religion, ethnicity, socioeconomic status),
horizontal ties can become a basis for pursuing narrow interests, and can
actively preclude access to information and material resources that would otherwise
be of great assistance to the community (e.g., tips about job vacancies,
access to credit).