Tuesday, 6 October 2009

What’s the difference between social capital and trust?

Trust is “a key facet of social capital” {Nahapiet, 1998} that you can use to build up social capital. So is there any difference?

Assuming trust promotes useful knowledge {Levin, 2004 } - hence the value added bit - then you'd share knowledge with people you trust, but it's something that feeds into social capital, an aspect of social capital.

Pinto et al {2008} say trust facilitates positive relationships on projects. That's adding value too, but it's facilitating an aspect of social capital - it isn't social capital. But you couldn't have social capital without trust. Trust provides a competitive advantage to the consultant (Block, 2000) so would help a consultant to build social capital in a new project.

Trust cements critical stakeholder relationships {Pinto, 2008}, which is what a consultant must be looking at - the various stakeholders. Pinto et al's study views it as valuable to manage interorganisational relationships to improve trust, so it's a kind of lubricant {Costa, 2009} - an oil (which is what some of my interviewees suggested).

Fukuyama relates trust to culture, 1996}; networks are a means of trust generation and networks can save on transaction costs. That's really interesting because it suggests that the networks of social capital generate trust, but trust also generates social capital - there's a positive feedback loop.

Wenger's new book 2009 Digital Habitats "learning together depends on the qualities of trust and mutual engagement that member develop with each other" (p8) so he doesn't say trust is a facet of engagement but trust and engagement together lead to learning. And how does that differ from social capital?

Fukuyama, F. (1996). Trust : the social virtues and the creation of prosperity. London, Penguin.
Levin, D. Z. & Cross, R. 2004. The Strength of Weak Ties You Can Trust: The Mediating Role of Trust in Effective Knowledge Transfer. Management Science, 50(11): 1477-1490.
McCormick, T. i. r. i. c. o. M. 1999. The impact of large-scale participative interventions on participants.
Nahapiet, J. & Ghoshal, S. 1998. Social capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23(2): 242-266.
Pinto, J. K., Slevin, D. P., & English, B. 2008. Trust in projects: An empirical assessment of owner/contractor relationships. International Journal of Project Management, In Press, Corrected Proof.

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