What do you mean by social capital?

I use Adler and Kwon's definition of social capital:

"the goodwill that is engendered by the fabric of social relations"

but Putnam who also identified bridging and bonding social capital, conceptualised it as

"arising from a stock of networks, norms and trust"

My research draws heavily on Nahapiet and Ghoshal's paper, which refers to Bourdieu's concept of social capital as the actual or potential resources that can be accessed through networks of relationships, and that potentiality is important in a situation like a project where participants haven't yet interactedl, and social capital has yet to be mobilised.

Although there isn't one agreed definition of it, social capital theory is relevant to explaining relationships so it's relevant to what I've been researching, but social capital theory doesn't go far enough in explaining ab initio relationships where people have not yet interacted and exchanged social capital. To explain such new relationships we need a theory that extends on the theory of social capital.

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Adler, P. S. & Kwon, S.-W. 2002. Social Capital: Prospects for a New Concept. Academy of Management Review, 27(1): 17-40.
Nahapiet, J. & Ghoshal, S. 1998. Social Capital, Intellectual Capital, and the Organizational Advantage. Academy of Management Review, 23(2): 242-266.
Putnam, R. D. 2000. Bowling Alone : The Collapse and Revival of American Community. New York ; London: Simon & Schuster.
Putnam. 1993. The Prosperous Community: Social Capital and Public Life. American Prospect, 13: 35-42.

Transaction costs again

Why don't I want to use economic and risk management theories for this research? Specifically why don't I want to use transaction costs?

Moran and Ghoshal start their1996 paper by describing two campers facing a tiger. One reaches for his running shoes despite not being able to outrun a tiger, but he points out that he only needs to outrun his colleague. That attitude indicates the type of relationship they have, and it doesn't involve trust, working together, getting things done together. It is not collaborative. Moran and Ghoshal point out that the attitude depends on two assumptions:

• human nature behaviour is opportunistic
• efficiency

What are transaction costs? Economists define them as the costs of administration of contracts and relationships between firms, and Fukuyama, {1996} says networks are a means of trust generation and networks can save on transaction costs

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Armbrüster, T. (2006). The economics and sociology of management consulting. Cambridge, Cambridge University Press.
Ghoshal, S. and P. Moran (1996). "BAD FOR PRACTICE: A CRITIQUE OF THE TRANSACTION COST THEORY." Academy of Management Review 21(1): 13-47.
Moran, P. and S. Ghoshal VALUE CREATION BY FIRMS. Academy of Management Best Papers Proceedings, Academy of Management.
Fukuyama, F. (1996). Trust : the social virtues and the creation of prosperity. London, Penguin.
MCKENNA, C. D. (2006) The World's Newest Profession: Management Consulting in the Twentieth Century, Cambridge University Press.

Projects and social capital

Nahapiet & Ghoshal’s (1998) model assumes the existence of social capital; the fed back intellectual capital is apparently the only input to sustain social capital. Nahapiet & Ghoshal point out,

“much of this capital is embedded within networks of mutual acquaintance and recognition”

so interaction is essential for the development and maintenance of social capital but that development takes time. Something needs to create the social capital in the first place.

In a project context, which by its nature is temporary and time bounded, the various project members may well come without pre-existing relationships, and hence, without social capital as a means to create and exchange intellectual capital. Without initial social capital, Nahapiet & Ghoshal’s model cannot start to apply.

Project members must create initial social capital. How do they get started? That's where they need to engage with each other.

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Nahapiet, J. and S. Ghoshal (1998). "Social capital, intellectual capital, and the organizational advantage." Academy of Management Review 23(2): 242-266.

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?

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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.

Questions I currently have

The questions I currently have about my study are:

• how to link the various facets of the dimensions of engagement that I've identified to the social capital dimensions that Nahapiet & Ghoshal identify.
• if this structure for the theoretical framework is okay, then I have to write why it's okay, which has something to do with outcomes of engagement. Good outcomes create and maintain social capital.
  
• which facets overlap and how do I write them so that the reader (especially my supervisors) understand what I mean?
• how to explain the value that accrues from engagement so that practitioners understand its value and want to engage in order to use that value in their IT projects.

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Murray, R. (2002). How to write a thesis. Buckingham ; Philadelphia, Open University Press. See Murray's prompts, page 88
Nahapiet, J. and S. Ghoshal (1998). "Social capital, intellectual capital, and the organizational advantage." Academy of Management Review 23(2): 242-266.

Wedges under can lids

Yesterday's work was a struggle to fit together the theoretical framework from Napahiet & Ghoshal along with the literature on engagement. Eventually, I came up with a framework based on the engagement literature, and think I'm getting somewhere, though it still needs more work. I feel as if I've shoved a wedge under a can lid, and with just a little more effort will be able to open it, but sometimes those wedges fall out and you have to start again.

Shoe horn engagement

You know what a shoe horn is? It's a tool for helping you fit into a shoe that's just a bit too tight.

For the last two weeks, I've been trying to shoe horn the phenomenon of engagement into Nahapiet and Ghoshal's framework of three dimensions of social capital. And it doesn't quite fit, or it's too tight. Their framework includes trust, and that seems to be an aspect of engagement. It's aspects of the relational dimension that seem most relevant.

But I can't quite work out how to adapt their diagram to include engagement. Somehow social capital drives and includes engagement, and that helps the combination and exchange of intellectual capital, so increases value. That's my hypothesis anyhow.

But perhaps I shouldn't be trying to use a shoe horn, because if a shoe doesn't fit, then it hurts.

Collecting data

My head's spinning with data I've been collecting from a couple of projects. I've got loads of transcribing to do so will take ages before I get to analysis. But I'll jot down immediate impressions for supervisors and myself. Later, I think I'll use the Nahapiet and Ghoshal paper to identify initial codings, because first impressions suggest existence of various dimensions of social capital.

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Nahapiet J, Ghoshal S. 1998. Social capital, intellectual capital, and the organizational advantage. Academy of Management Review 23(2): 242-266.

Knowledge and communities of practice

Wenger writing on knowledge transfer and communities of practice, argues CoP are “cornerstones of knowledge management" and suggests that there are three characteristics to communities of practice: domains, communities and practice. The combination of characteristics allows communities of practice to manage knowledge. It is their combination that enables CoP to manage knowledge.
He relates these domains to strategy.

• domain - you need knowledge to do what you want
• communities - you need people to have knowledge
• practice - you need experience to produce usable knowledge & what have we learned?

It seems to me that there is some overlap of these characteristics with the Nahapiet and Ghosal dimensions of social capital (structural, cognitive & relational), and Wenger’s description of these characteristics in relation to knowledge has given me other angles on questions to ask in interview.

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Nahapiet, J. and Ghoshal, S. (1998) 'Social capital, intellectual capital, and the organizational advantage', Academy of Management Review, 23 (2), pp. 242-266. 842
Wenger, E. (2004) 'Knowledge management as a doughnut: Shaping your knowledge strategy through communities of practice', Ivey Business Journal, 68 (3), pp. 1-8. 1051

Interview questions from Nahapiet & Ghoshal

I'm splitting up the questions to match the different dimensions of social capital that Nahapiet and Ghoshal refer to, but then I have to work out how those questions help me to answer the research questions.

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Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23(2), 242-266.

Devising interview questions from the literature

It's sensible to leave an audit trail that shows how the data you collected relates to the literature you read. So, I'm attempting to devising interview questions from relevant literature, like Nahapiet & Ghoshal's paper. Hence, for example, they had a theoretical model of different dimensions to social capital. One dimension is structural, so I'm trying to work out questions that related to structure, like

• who do you know. or
  
• tell me about who provides access to resources?
  
• what other people have you known at other stages of the project life cycle (which should tell me about network ties)

But creating something practical from a highly academic and theoretical model is taking a bit of time and thought.

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Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23(2), 242-266.

Conceptual framework

Somehow I want to use Nahapiet & Ghoshal's dimensions of social capital to write my interview questions, but those questions also need to relate to my research questions and I am not getting them to be close enough to show the audit trail. The table below shows beginning thoughts.

	Client	Consultant
Client	much social capital through institutionalisation too much capital leading to negative consequences might be another reason for bringing in consultants in some circumstances
Consultant		perhaps there’s less social capital, especially for the insecure consultants who work in liminal spaces

The matrix comes from the NAO advice on engaging between client-client, client-consultant, consultant-client and consultant-consultant. What do I put in the empty boxes?

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Nahapiet, J. and Ghoshal, S. (1998) 'Social capital, intellectual capital, and the organizational advantage', Academy of Management Review, 23 (2), pp. 242-266. 842
NAO (2006) Central Government's use of consultants Vol. HC 128 Session 2006-2007 (Ed, National Audit Office) HMSO. 577

Social capital and social networks

Social capital and social networks are not the same thing. Social networks are relationships that create the social capital.

Social networks are not always good. Being too close and therefore unbalanced relationships may for example lead to group think. I think I read that in Scott (1996). Arguably, the advent of consultants could correct the imbalance and lead to new more balanced and therefore more productive relationships.

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Scott, J. (1996) 'A Toolkit for Social Network Analysis', Acta Sociologica (Taylor & Francis Ltd), 39 (2), pp. 211-216. 843

Theorising engagement

Supervisor #2 has come up with an idea that nicely relates to the way I am thinking about relationships. He suggests that rather than using Actor-Network theory that I consider social network theory. He's come across this paper by Nahapiet & Ghoshal that describes how the structures of social networks can improve social capital and the structure of those networks can also lead to increased intellectual capital {Nahapiet, 1998}. There are three dimensions to creating intellectual capital through social capital:

1. structural dimension: who is connected to whom, i.e. network ties, network configuration, appropriable organisation
2. cognitive dimension: to what extent are there shared concepts between people, i.e. shared codes & language, shared narratives
3. relational dimension: what are the established norms of how people behave, i.e trust, norms, obligations, identification.

Each dimension contributes in different combinations. The combinations and exchange of intellectual capital are:

• access to parties for combining/exchanging intellectual capital
• anticipation of value through combining /exchanging intellectual capital
• motivation to combine /exchange intellectual capital
• combination capability

These combinations and exchanges create new intellectual capital.

Sounds cool!

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Nahapiet, J. and Ghoshal, S. (1998) 'SOCIAL CAPITAL, INTELLECTUAL CAPITAL, AND THE ORGANIZATIONAL ADVANTAGE', Academy of Management Review, 23 (2), pp. 242-266. 842