Grabbing at the wind: the power forces of social capital

Is attempting to capitalise on social capital just like grabbing at the wind? It’s not particularly tangible and a powerful force that doesn’t always blow the way you want.

I have no doubt that social capital is missing from [most] corporate balance sheets and is certainly a factor that all organisations should take seriously due to its importance in the effective functioning of the organisation.

The importance is increasingly being recognised, as evidenced by the attempts to bank, trade, measure and build social capital.

The problem is that social capital is not directly visible as it exists in the social relationships between people. You can’t touch and feel it, you can’t see it, and you certainly can’t measure it directly.

You can see the consequences of social capital: acts of reciprocity, information sharing, etc, and you can predict the existence of social capital: belonging, trust, rules and norms, social networks, membership, etc.

The problem is that the powerful effects of social capital may not result in positive manifestations, depending on your perspective.

The same social factors that reduce costs due to the efficiencies of employees working together and sharing information can also result in unionism that may increase costs.

As such the ability for social capital to lubricate social action could be perceived as a risk from a certain perspective, but as a benefit from another perspective.

The 2014 platinum strike in South Africa (costing an estimated $2.25 billion) could be attributed to social capital, but too much or too little, or just the wrong types?

There was clearly no shortage of “linking” social capital among the 70,000 workers who organised the social action, but perhaps a shortage of “bridging” social capital between the workers and their corporate managers.

If the corporations involved had valued social capital and actively invested in social capital within their organisation would the strike have happened?

It all depends on the approach.

Most corporations who take notice of social capital take a very top-down approach where senior management or external consultants set the parameters and implement strategies to build social capital within the organisation and to measure their success.

This approach would likely have been ineffective in the case of the platinum strike unless it greatly improved vertical communication (social capital) within the organisations and broke down deeply rooted cultures that resulted in the isolation of the workers from the managers.

Unfortunately a top-down approach would have done little to make the key changes required and this highlights the problem with the current dominant approaches to social capital measurement and building initiatives within organisations.

The solution is clearly a bottom-up approach where the people “at the coalface” are able to define the social capital factors that are most relevant and important to them in their context. By engaging with these factors they indirectly strengthen these factors and focus their attention on them. Ongoing measurement and evaluation activities further strengthen these factors.

This process has flow-on benefits from increased trust in management, ownership of the process, and an increased sense of belonging that comes from the former and from sharing the experiences and ideas of other people in the same context.

Social capital is a powerful wind, but just as capricious, so just grabbing at it may not be the best approach.

Tristan Claridge completed a Masters thesis on social capital theory in 2004 at the University of Queensland. Although Tristan originally wanted to apply social capital theory to natural resource management outcomes in Australia, he found that the current understanding of social capital was not sufficiently conceptualised to allow this application. Read more

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