The Benefits and Pitfalls of Social Capital: Empirical Evidence from Two Organizations in the United Kingdom

11 Pages Posted: 18 May 2004  

Linda F. Edelman

Bentley University - Department of Management

Mike Bresnen

University of Warwick - Warwick Business School

Sue Newell

Bentley University - Department of Management; University of London, Royal Holloway - School of Management

Harry Scarbrough

University of Warwick - Warwick Business School

Jacky Swan

Warwick Business School

Abstract

Recently, there has been a shift in the way management scholars view the firm, from traditional models that are based on ideas of opportunism and market failure to newer knowledge-based theories that argue for a more socialized perspective. One of the key components of these theories is the notion of social capital. Social capital is the set of resources that accrue to an individual or group by virtue of their social connections. As such, it is a resource that is jointly owned. Most recent research adopts a more-is-better approach to social capital, suggesting that individuals with larger quantity of ties derive more positive benefits. However in this paper, we argue that using social capital has both benefits and drawbacks for organizations, and that these positive and negative aspects of social capital occur simultaneously. To substantiate our claim, we use data collected from sets of interviews with senior and middle managers in two organizations in the United Kingdom. Our findings indicate that while social capital has many beneficial effects with respect to information access and retrieval, community building, and underlying group norms, there are also a number of less-beneficial aspects, which are under-explored in the current empirical literature. Furthermore, we suggest that organizations must develop an understanding of the bridging and bonding elements of social capital, as these are critical for its implementation. Implications of the research findings and future research directions are discussed.

Suggested Citation

Edelman, Linda F. and Bresnen, Mike and Newell, Sue and Scarbrough, Harry and Swan, Jacky, The Benefits and Pitfalls of Social Capital: Empirical Evidence from Two Organizations in the United Kingdom. British Journal of Management, Vol. 15, No. S1, pp. S59-S69, March 2004. Available at SSRN: https://ssrn.com/abstract=540587

Linda F. Edelman (Contact Author)

Bentley University - Department of Management ( email )

175 Forest Street
Waltham, MA 02145
United States

Mike Bresnen

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

Sue Newell

Bentley University - Department of Management ( email )

175 Forest Street
Waltham, MA 02145
United States
781-891-2399 (Phone)

HOME PAGE: http://ecampus.bentley.edu/dept/mg/management/suehomepage.htm

University of London, Royal Holloway - School of Management

Egham
Surrey, Egham TW20 8DG
United Kingdom

Harry Scarbrough

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

Jacky Swan

Warwick Business School

Coventry CV4 7AL
United Kingdom

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