The balance of corporate social capital

Abstract

The aim of this study is to assess the significance of social capital in a public organization according to two theoretical frameworks. Following the structural hole theory (Burt, 1992), a sparse social network enables employees to gain control and information benefits. According to the social capital theory (Coleman, 1988), a cohesive social network creates trust and an obligation to cooperate. The theories describe favorable outcomes of the opposite poles of social structure, but the discussion shows that the social capital might not be realized because of unfavorable contextual factors. Empirical findings indicate that a sparse ego network increases an employee's indirect control and that a dense work unit network increases trust in the democracy of decision making. The discussion suggests that a sparse social network might be most beneficial to a bureaucratic organization and that cohesiveness does not automatically induce commitment if it is not supported by favorable social norms. Unless prerequisites of social interaction are well secured, the organization faces the risk of having inadequate levels of social cohesion, which might impede the creation of social capital. In conclusion, the management is faced with the challenge of social liabilities arising from both social cohesion and the lack of it.

Citation

Johanson, J.-E. (2001), "The balance of corporate social capital", Gabbay, S.M. and Leenders, R.T.A.J. (Ed.) Social Capital of Organizations (Research in the Sociology of Organizations, Vol. 18), Emerald Group Publishing Limited, Leeds, pp. 231-261. https://doi.org/10.1016/S0733-558X(01)18010-9