The Strategic Value of Social Capital

The Strategic Value of Social Capital

How Firms Capitalize on Social Assets

Francesca Masciarelli

This groundbreaking book explores whether, how and why firms may generate value from social assets. Based on original empirical evidence, this is the first book that systematically integrates different approaches to social capital and develops a new and more comprehensive framework that relates social capital to various firm’s strategies.

Chapter 1: Introduction and Overview

Francesca Masciarelli

Subjects: business and management, human resource management

Extract

Firm competitiveness depends heavily on the ability to produce new knowledge bases through combinations of knowledge located inside and outside the firm boundaries (Cassiman and Veugelers, 2006; Chesbrough, 2003a; Kogut and Zander, 1993). To increase competitiveness, firms need to be able to leverage complementary resource endowments and knowledge from external actors such as users, suppliers, universities and competitors (Arora et al., 2001; Rosenkopf and Nerkar, 2001; Shan et al., 1994; von Hippel, 1988). Therefore, it is important for firms to identify the contingencies that facilitate access to valuable knowledge and information. The central argument in this book is that social capital plays a key role in enabling knowledge to flow across firm boundaries, allowing firms to exploit knowledge to generate new ideas. Underlying the idea of social capital is that personal and work relationships overlap, and individual attitudes and behaviours affect the collective behaviours of firms. The literature on localized economic activities supports this assumption and argues that multiple-level networks (professional and personal) eventually merge within geographical locations (Brusco, 1982; Saxenian, 1994). The concept of social capital raises several theoretical and empirical questions about the way in which it creates value for firms, and provides entrepreneurs and managers with certain practical challenges. This book explains what social capital means for firm competitiveness and investigates how and why firms are able to generate value from social capital. It combines insights from the relational view of the firm and social capital theory, to advance the thesis that social capital is a key...