Social Capital, Intellectual Capital, and the Organizational Advantage

Posted: 17 Nov 2009

See all articles by Janine Nahapiet

Janine Nahapiet

affiliation not provided to SSRN

Sumantra Ghoshal

affiliation not provided to SSRN

Date Written: 1998

Abstract

This research focuses on creating a theory of the "organizational advantage," a new concept identified within business and management. Using social capital research as a foundation for this theory, three of the study's objectives are identified: 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. In order for exchange and combination of resources to occur as a means of creating value, the research identifies three necessary conditions, including the opportunity for exchange and combination to occur, the expectation that exchange and combination generates value, and the motivation that exchange and combination in some way will be productive. This research further identifies a fourth condition, combination capability, as a significant factor in value creation. Due to social capital's influence upon the conditions needed for exchange and combination, social capital aids in the creation of intellectual capital. The research further hypothesizes that a firm's ability to create and utilize social capital contributes to performance differences among firms. Several limitations are identified, including omission of the negative impact of social capital upon a firm and the costs associated with creating and preserving a firm's social capital. The findings of the study are generalized to other institutional situations, and areas for future research are identified. (AKP)

Keywords: Relational embeddedness, Information exchange, Resource management, Social structures, Knowledge management, Social networks, Intellectual capital, Structural embeddedness, Resource model, Organizational learning, Competitive advantages, Knowledge production, Information transfer, Wealth creation, Social capital

Suggested Citation

Nahapiet, Janine and Ghoshal, Sumantra, Social Capital, Intellectual Capital, and the Organizational Advantage (1998). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1505219

Janine Nahapiet

affiliation not provided to SSRN

Sumantra Ghoshal

affiliation not provided to SSRN

No Address Available

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