Theme 1: social capital theory
Article 1 → Nahapiet, J. & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational
advantage.
1) incorporate different aspects of social capital to identify three common dimensions; 2) explain the
role of each dimension in the process of creating and exchanging knowledge; and 3) maintain the belief
that organizations are capable of creating extraordinary amounts of social capital on all three
dimensions. Additionally, the relationship between social capital and intellectual capital is explored, as is
the impact of this relationship upon a firm's perceived organizational advantage.
“social capital facilitates the development of intellectual capital by affecting the conditions necessary for
exchange and combination to occur.
People started looking at organizational advantages, occurring from particular capabilities organizations
have for creating knowledge, instead looking for reasons for market failure. This article helps doing this
by using the following arguments:
1. Social capital facilitates the creation of new intellectual capital
2. Organizations, as institutional settings are conductive to the development of high levels of
social capital
3. It is because of the more dense social capital that firms within certain limits have an
advantage over markets in creating and sharing intellectual capital.
New theory says that a firm is more of a social community specializing in speed and efficiency in the
creation and transfer of tacit knowledge. Whereas before the cost theory was grounded on the
assumption that human opportunism and the resulting conditions of market failure. This article fills the
gap between the two insights based on organizational advantage rooted in social capital.
This article:
1. Integrates the different facets to define social capital in terms of three dimensions
- Structural: the overall pattern of connections between actors that is, who you reach and how
you reach them.
- Relational: the particular relations people have, such as respect and friendship, that influence
their behavior.
- Cognitive: those resources providing shared representations, interpretations, and systems of
meaning among parties.
, 2. describes how each of these dimensions facilitates the creation and exchange of knowledge
3. argues that organizations as institutional settings are able to develop high levels of social
capital in terms of all three dimensions.
The focus is on the relationship between social and intellectual capital.
1. Social capital theory= networks of relationship constitute a valuable resource for the
conduct of social affairs, providing their members with “the collectivity-owned capital”.
Social capital can also be negative because it limits openness to others, information and new
ways, while forming mutual ideas and norms with the people in a group.
Social capital is 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.
Structural embeddedness= concerns the properties of the social system and of the network of relations
as a whole.
Relational embeddedness= the kind of personal relationships people have developed with each other
through a history of interactions. This focusses on the relations people have.
Cognitive dimension= refers to those resources providing shared representations, interpretations and
systems of meaning among parties.
These three forms have in common that they constitute some aspect of the social structure and they
facilitate the actions of individuals within the structure.
2. Intellectual capital= refers to knowledge and knowing capability of a social collectivity such
as an organization intellectual community or professional practice.
· Dimensions of intellectual capital:
- Types of knowledge
o Tacit= the extent to which knowledge can be codified and abstracted. Vs. explicit
o Practical, experience based. Vs. Theoretical
o Know how: well-practiced skills and routines. Vs. Procedural: development of facts
and propositions.
· Levels of analysis in knowledge and knowing:
o Learning of the members vs. ingesting new members who have new knowledge.
, - Individual explicit= conscious knowledge: typically, available to the individual in the form of
facts, concepts, and frameworks.
- Individual tacit= automatic knowledge: theoretical and practical knowledge of people and
the performance of different kinds of skill.
- Social explicit= objectified knowledge: the shared corpus of knowledge by for example a
scientific community.
- Social tacit= collective knowledge: knowledge that is fundamentally embedded in the forms
of social and institutional practice. This knowledge occurs frequently at experienced teams.
· Creation of intellectual capital
Through generic processes, a combination and exchange.
Combination is the process viewed as the foundation for economic development.
- First, new knowledge can be created through incremental change and development from
existing knowledge. Second, innovation is a more radical change. Innovation is double loop
learning. However, there is consensus that both types of creation involve making new
combinations. To make combinations you need exchange between parties with different
forms of information. Mostly this is exchange of explicit knowledge either in groups or
individually, but this can also happen via internet.
· Conditions for exchange and combination
conditions that must be satisfied before exchange and combination of resources actually take place:
1. Opportunity exists to make combination or exchange
2. In order for parties involved to avail themselves of the opportunities that
may exist to combine or exchange resources, value expectancy theorists
suggest that those parties must expect such deployment to create value.
3. Importance of motivation, even when opportunities for exchange exist and
people anticipate that value may be created through exchange and
combination will be worth their while.
4. Combination capability. Even when all the above is there, the capability to
combine information or experience must exist .= absorptive capacity
Which main theories/models are used/discussed in this research?
, The central proposition of social capital theory is that networks of relationships constitute a valuable
resource for the conduct of social affairs.
Collaboration and collective learning increase knowledge and innovation. This increase in knowledge not
only causes the productive opportunity of a firm to change but also contributes to the "uniqueness" of
the opportunity of each individual firm
· Toward a theory of the creation of intellectual capital
Step 1= new intellectual capital is created through combination and exchange of existing
intellectual resources which may exist in explicit or tacit form.
Step 2= there are four conditions that affect the deployment of intellectual resources and
engagement in knowing activity involving combination and exchange.
Step 3= combination and exchange are complex social processes. Social capital indirectly
influences combination through exchange.
Network ties: fundamental proposition of social capital theory is that network ties provide access to
resources. Information is a basis for action but is costly to gather, social relations make this easier. These
information benefits occur in three forms:
Article 1 → Nahapiet, J. & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational
advantage.
1) incorporate different aspects of social capital to identify three common dimensions; 2) explain the
role of each dimension in the process of creating and exchanging knowledge; and 3) maintain the belief
that organizations are capable of creating extraordinary amounts of social capital on all three
dimensions. Additionally, the relationship between social capital and intellectual capital is explored, as is
the impact of this relationship upon a firm's perceived organizational advantage.
“social capital facilitates the development of intellectual capital by affecting the conditions necessary for
exchange and combination to occur.
People started looking at organizational advantages, occurring from particular capabilities organizations
have for creating knowledge, instead looking for reasons for market failure. This article helps doing this
by using the following arguments:
1. Social capital facilitates the creation of new intellectual capital
2. Organizations, as institutional settings are conductive to the development of high levels of
social capital
3. It is because of the more dense social capital that firms within certain limits have an
advantage over markets in creating and sharing intellectual capital.
New theory says that a firm is more of a social community specializing in speed and efficiency in the
creation and transfer of tacit knowledge. Whereas before the cost theory was grounded on the
assumption that human opportunism and the resulting conditions of market failure. This article fills the
gap between the two insights based on organizational advantage rooted in social capital.
This article:
1. Integrates the different facets to define social capital in terms of three dimensions
- Structural: the overall pattern of connections between actors that is, who you reach and how
you reach them.
- Relational: the particular relations people have, such as respect and friendship, that influence
their behavior.
- Cognitive: those resources providing shared representations, interpretations, and systems of
meaning among parties.
, 2. describes how each of these dimensions facilitates the creation and exchange of knowledge
3. argues that organizations as institutional settings are able to develop high levels of social
capital in terms of all three dimensions.
The focus is on the relationship between social and intellectual capital.
1. Social capital theory= networks of relationship constitute a valuable resource for the
conduct of social affairs, providing their members with “the collectivity-owned capital”.
Social capital can also be negative because it limits openness to others, information and new
ways, while forming mutual ideas and norms with the people in a group.
Social capital is 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.
Structural embeddedness= concerns the properties of the social system and of the network of relations
as a whole.
Relational embeddedness= the kind of personal relationships people have developed with each other
through a history of interactions. This focusses on the relations people have.
Cognitive dimension= refers to those resources providing shared representations, interpretations and
systems of meaning among parties.
These three forms have in common that they constitute some aspect of the social structure and they
facilitate the actions of individuals within the structure.
2. Intellectual capital= refers to knowledge and knowing capability of a social collectivity such
as an organization intellectual community or professional practice.
· Dimensions of intellectual capital:
- Types of knowledge
o Tacit= the extent to which knowledge can be codified and abstracted. Vs. explicit
o Practical, experience based. Vs. Theoretical
o Know how: well-practiced skills and routines. Vs. Procedural: development of facts
and propositions.
· Levels of analysis in knowledge and knowing:
o Learning of the members vs. ingesting new members who have new knowledge.
, - Individual explicit= conscious knowledge: typically, available to the individual in the form of
facts, concepts, and frameworks.
- Individual tacit= automatic knowledge: theoretical and practical knowledge of people and
the performance of different kinds of skill.
- Social explicit= objectified knowledge: the shared corpus of knowledge by for example a
scientific community.
- Social tacit= collective knowledge: knowledge that is fundamentally embedded in the forms
of social and institutional practice. This knowledge occurs frequently at experienced teams.
· Creation of intellectual capital
Through generic processes, a combination and exchange.
Combination is the process viewed as the foundation for economic development.
- First, new knowledge can be created through incremental change and development from
existing knowledge. Second, innovation is a more radical change. Innovation is double loop
learning. However, there is consensus that both types of creation involve making new
combinations. To make combinations you need exchange between parties with different
forms of information. Mostly this is exchange of explicit knowledge either in groups or
individually, but this can also happen via internet.
· Conditions for exchange and combination
conditions that must be satisfied before exchange and combination of resources actually take place:
1. Opportunity exists to make combination or exchange
2. In order for parties involved to avail themselves of the opportunities that
may exist to combine or exchange resources, value expectancy theorists
suggest that those parties must expect such deployment to create value.
3. Importance of motivation, even when opportunities for exchange exist and
people anticipate that value may be created through exchange and
combination will be worth their while.
4. Combination capability. Even when all the above is there, the capability to
combine information or experience must exist .= absorptive capacity
Which main theories/models are used/discussed in this research?
, The central proposition of social capital theory is that networks of relationships constitute a valuable
resource for the conduct of social affairs.
Collaboration and collective learning increase knowledge and innovation. This increase in knowledge not
only causes the productive opportunity of a firm to change but also contributes to the "uniqueness" of
the opportunity of each individual firm
· Toward a theory of the creation of intellectual capital
Step 1= new intellectual capital is created through combination and exchange of existing
intellectual resources which may exist in explicit or tacit form.
Step 2= there are four conditions that affect the deployment of intellectual resources and
engagement in knowing activity involving combination and exchange.
Step 3= combination and exchange are complex social processes. Social capital indirectly
influences combination through exchange.
Network ties: fundamental proposition of social capital theory is that network ties provide access to
resources. Information is a basis for action but is costly to gather, social relations make this easier. These
information benefits occur in three forms:
