Social Capital

Social Capital

Reaching Out, Reaching In

Edited by Viva Ona Bartkus and James H. Davis

This book showcases new innovative research in economics, politics, sociology, and management regarding the topic. Leading scholars from a variety of disciplines present ground-breaking new research exploring the still-undiscovered value of social capital. The book employs a self-consciously multi-disciplinary approach to address two objectives: reaching out and reaching in. Through theoretical and empirical scholarship, the authors explore the many contexts in which the phenomenon can have impact. In effect, social capital research reaches out to issues of economic well-being, civic participation, educational achievement, knowledge and norm formation, and competitive advantage. Further, the authors investigate the many connections between the core themes of social capital and the pillars on which it rests, including structural networks, cognition, relationships and trust. This book is fundamentally about bridging – bridging across disciplines, units of analysis, and themes.

Chapter 8: Capitalizing on Connections: Social Capital and Strategic Management

Janine Nahapiet

Subjects: business and management, organisation studies, public management, politics and public policy, public administration and management, public policy


Janine Nahapiet1 Social connections and relationships are a major influence on organizational success. They always have been. However, they are increasingly prominent in current thinking about strategy and organization. Indeed, scholars now argue that we should view the firm as a portfolio of relationships rather than a portfolio of either businesses or capabilities. This view has profound implications for strategic management. Why are we seeing this renewed emphasis on social connections? What theories help us understand and take action if strategy is viewed from a relational perspective? Fundamental changes at the end of the twentieth century radically challenged conventional wisdom regarding competitive success. Two issues emerged: the crucial importance of the knowledge economy and the idea of collaborative advantage. Both implied the need for a new model of strategy – one built around value creation through social relationships. This chapter’s core argument is that social capital provides a distinctive perspective that can address directly these important challenges facing strategic management. Social capital theory focuses on the value of social connections; scholars argue that firms well endowed with social capital create competitive advantage through better access to opportunities, options and resources through their relationships. A growing body of evidence supports this view. The distinctive contribution of social capital lies in elucidating the themes that are emerging as central to strategic management. Recent scholarship shows how social capital helps to explain the mechanisms involved in creating and exploiting collaborative advantage and intellectual capital, both particularly critical to innovation and the knowledge economy....

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