Academics tout 'Social Capital' as latest thing in strategic HR - News

HR Magazine, Feb, 2003 by Margaret M. Clark

Several dozen researchers, including those from human resources studies and industrial relations departments at top universities, addressed the concept of "social capital" and directions for further research into it during the 55th Annual Meeting Jan. 3-5 of the Industrial Relations Research Association (IRRA) in Washington, D.C.

Social capital describes networks among individuals and the norms of reciprocity and trust that arise from them. Scholars studying social capital hypothesize that such networks create economic value for individuals, organizations or both.

Fueled in part by an offer of funding by the New York-based Alfred P. Sloan Foundation, IRRA's Human Resource Network members debated how to develop better language for talking about relationships in organizations. Next-level questions, according to panelist Carrie Leana, a professor of business administration at the University of Pittsburgh, include how to measure what social capital means for firms and employees and how to develop "a more vibrant conversation" among researchers in different disciplines (e.g., sociology, business, marketing).

Sloan Program Director Gail Pesyna says the foundation seeks to support research that not only will contribute to the field academically, but that also will be useful to those who actually work in companies.

During a conference symposium, panel chair Arthur Schwartz asked rhetorically, "Is social capital just grandiose schmoozing?

"I think it's more than that," says Schwartz, director of labor planning for General Motors. Organizations are social communities. Employees all network all the time. That leads to cooperation and information sharing that, in turn, produces results, he said.

For example, speaker Lisa Moynihan, a graduate student in human resource studies at Cornell University, reports a small but significant relationship between smaller group size and knowledge-seeking behavior among employees in a company's sophisticated call center operation. Those in smaller work groups also performed better overall as well as on quarterly work sample tests of job knowledge and behavior.

Cornell professor Christopher J. Collins argues that social capital fosters the creation of knowledge, but that it involves more than just linking employees through technology. "Some companies threw technology at it, and nothing happened. They are still losing market share," Collins says. The "more" of social capital is represented by trust and by shared codes and language, Collins suggests.

Collins explains that trust is related to an increased willingness to share information and greater likelihood of seeking help. Shared codes and language contribute to shared understanding and combined knowledge, which increases the likelihood of exchange.

Collins says his research into HR practices of 78 high-tech companies supported his theories. He looked at two different "bundles" of human resource practices on opposite ends of a spectrum: high-commitment, relationship-based practices and transactional, efficiency-based practices.

Common bonds, high degrees of trust and an organization's willingness to develop firm-specific skills and common codes, Collins says, characterize high-commitment practices. In the transactional model, employees spend less time in the organization and there is a lower level of commitment and trust.

Trust and shared codes lead to innovation, Collins found among his sample of scientists and engineers in high-tech companies. Simply bringing in individual smart people did not result in innovation.

Drawing on her research in the airline and health care industries, Brandeis University professor Jody Hoffer Gittell discussed how organizational structure influences coordination networks. Gittell proposed that the extent to which formal organizational practices achieve desired outcomes is related to the way coordination networks are shaped to be more (or less) inclusive of participants in a given work process.

She looked at an array of organization design elements (e.g., meetings, routines, information systems, supervision, training, conflict resolution) and concluded that the more that participants in a work process were included in such structures, the more inclusive their coordination networks were and the higher the performance of the work process was.