Introduction to Social Capital

Influence of Social Capital on Professional Growth

ByAtul Shivnani ( FT 11215 ) | Kunal Kaul ( FT 11233 ) | Preethi Srikanth ( FT 11281) | Shyam Sundar V ( FT 11265 ) | Siddhesh Dhuri ( FT 11266 )

What is Social Capital?• Social capital is a sociological concept, which refers to connections within

and between social networks

• Social capital represents the degree of social cohesion which exists in communities. It refers to the processes between people which

– establish networks, norms, and social trust and – facilitate coordination and cooperation for mutual benefit.

• “The value of social networks that people can draw on to solve common problems”. The benefits of social capital flow from the trust, reciprocity, information, and cooperation associated with social networks.

Bourdieu’s Concept

• He identifies three dimensions of capital each with its own relationship to class: economic cultural & Social capital

• From the Bourdieuan perspective, social capital becomes a resource in the social struggles that are carried out in different social arenas or fields.

• One of the oldest concepts of Social Capital was developed by Pierre Bourdieu in the 1970s and early 1980s.

• Bourdieu’s concept is connected with his theoretical ideas on class.

Putnam’s Concept

Moral obligations and norms, Social values ( especially trust and more generally 'positive' values

with respect to development); and Social networks (especially voluntary associations).

“If a region has a well-functioning economic system and a high level of political integration, these are the result of the region’s successful

accumulation of social capital” – Putnam

Putnam’s concept of Social Capital has three components. These forms of Social Capital are general moral resources of the community:

Network Perspective• Network perspective on social capital :

The extent to which an individual can realize the benefits of social capital is a function of that individual's position in a given social network.

• This drives our focus on: The resources that can be accessed by network members (either

directly or through contacts), and The structure of relationships or linkages in a network of interest.

Dimensions of Social Capital

• Social networks can be classified into three types:

• Informal ties

• Generalized relationships

• Institutional Relationship

Views on Social Capital

There is also a business case for social capital - hard evidence that social capital boosts business performance. Individuals who build and use social capital get better jobs, better pay, faster promotions, and are more influential and effective, compared with peers who are unable or unwilling to tap the power of social capital. Organizations with rich social capital enjoy access to venture capital and financing, improved organizational learning, the power of word-of-mouth marketing, the ability to create strategic alliances, and the resources to defend against hostile takeovers. And social capital is a bulwark of democracy.“ -Wayne Baker, Achieving Success Through Social Capital, 2000

"The new currency won't be intellectual capital. It will be social capital-the collective value of whom we know and what we'll do for each other. When social connections are strong and numerous, there is more trust, reciprocity, information flow, collective action, happiness, and, by the way, greater wealth."-James Kouzes, Chairman Emeritus of Tom Peters Company, "Link Me to Your Leader", Business 2.0 October 10, 2000

Views on Social Capital(Contd.)

People who optimize their personal capital can change their world. People who optimize their social capital can change the world. -Mick Cope Consultant & Author

"A basic tenet of almost all social capital theories is that a network is one of the most powerful assets that any individual can possess. It provides access to power, information, knowledge, and to other networks-the totality of which provides a much better indicator of how 'well-off' one is than many more acknowledged sources of wealth or advantage."-Lawrence Prusak and Don Cook, In Good Company

Social Capital in a 21st Century Organization

• Human Resources used to focus only on within-employee factors. The new competitive landscape requires focusing on between-employee factors.

• In today’s knowledge organization, the goal is to “hire and wire;” to hire the best people with the best network and integrate them into the value chain so that their combined human and social capital provide excellent returns.

• Today's organizations rely less on owned assets. It is not what you control but what you can access.

“Indian companies are growing to be more competitive, both locally and globally. To derive a competitive edge, they need to attract talented people on one hand and business opportunities on the other. To achieve this, they need people who are able to work with teams, have strong interpersonal skills and are able to communicate and influence others across levels, functions and cultures in a sensitive manner,” says Ritu Malhotra, Assistant Director- HR, Canon India.

Social capital indispensable for growth at workplace

The Erdős number describes the "collaborative distance" between a person and mathematician Paul Erdős as measured by authorship of mathematical papers

Erdős Number

Fun Fact

• Successful Managers spend more than 70% more time engaged in networking activities and 10% more time engaged in routine communication activities than their less successful counterparts.

- According to a study by Luthans, Hodgetts and RosenKrantz

Theories of Social Capital

• Weak Ties Theory- In terms of connection with general society and staying in touch with what is going on in the wider world, the weak ties with our acquaintances are paradoxically much more important than the inwardly-focused conversations with our closer friends.(Granovetter-1973)

• Structural Hole theory- The pieces of an organization's or a population's network that don't communicate much are insulated by what are called as "Structural Holes“. We will benefit more if we are able to connect these two unconnected networks. (Burt-1992)

Downside of Social Capital

• Groupthink Teams don't have to constantly work together to be effective. Teams should not attempt to avoid conflict. Team members are encouraged to work independently to achieve

team goals. Conflict is essential to prevent groupthink.

The organization needs to minimize the adverseeffects of excessive social capital.

Advantages of Social networks (Impact on Professional Growth)

Social networks helps the individuals to further their career prospects by delivering the following advantages :

Personal access to information Access to diverse skill sets Enhanced Power Find better jobs more quickly Are more likely to be promoted early Close deals faster Receive larger bonuses

Enhance the performance of their teams Help their teams reach their goals more rapidly Perform better as project managers Help their teams generate more creative solutions Increase output from their R&D teams Coordinate projects more effectively Learn more about the firm’s environment and marketplace Receive higher performance evaluations

Advantages of Social networks (Contd.)

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