Social and intellectual capital (Jun. 28)

The fact that we live within a market-based globalized capitalist society renders traditional hierarchical, mechanistic organizations obsolete. Thus, we have been told that in a post-industrial economy, intangible assets, knowledge-based organizations and social capital are the way forward, as expressed in Manning (2010). Indeed, the very notion of capitalism has changed within neo-capital theories, according to which the market is subordinated by social and political realities. While classic capitalism underlines returns on investments and profit-maximizing as an organizational goal, neo-capital theories couple financial goals to social-based objectives such as sociability, acceptance, status and power. Furthermore, the concept of capital is shifted or extended to include human and intellectual capital. As such, the concept of social capital was introduced as an umbrella concept for social sciences emphasizing the positive effects of sociability for organizations. In addition, this movement offers the use of analytical tools based on social relations (e.g. social network analysis) in order to design and evaluate knowledge management strategies to foster and develop social capital.

But, as Manning argues, social capital is not just about creating or modelling social relations, it is about the reciprocity, norms and beliefs that should be coupled to those relations in order for real value or wealth to be generated. For a strong social fabric to emerge, expectations and trustworthiness must be part of the social network and effective information channels must be in place. Those conditions are typically only possible within closed networks with clear norms that enforce a behavior that strikes the right balance between individual self-interest and group-wide goals. This balance is hard to achieve because norms can either foster or restrict behavior, resulting in conflicting trade-offs. In addition, while the closure of the network prevents easy entry or exit (which results in less commitment or identity) it may also render the network less able to adapt to the dynamics of the globalized capitalist market. If social capital building initiatives are not built strategically with an eye on long-term impact, further negative outcomes may include: discrimination, "old boys club" effect, conflicts around the legitimacy of knowledge ownership and potential threats to privacy.