The Clute Institute International Academic Conference

Munich, Germany 2014

Organizational Social Capital And Its

Importance In Human Resources
Management
A. Aslan endodu, Necmettin Erbakan University, Turkey
Meral Erdirenelebi, Necmettin Erbakan University, Turkey

ABSTRACT
Human resources managers put much emphasis on social capital due to its role on value creation
process today. Organizational social capital is defined as common language and working
environment for employees of an enterprise coming together for common purpose of mutual trust,
commitment, cooperation, interaction, not being selfish and even with the dimension of adoring
themselves for others. The objective of this study is to highlight the growing importance of
organizational social capital and the necessity of placing this phenomenon into the focus of
human resource management. Within this context, it could be claimed that the firms that
internalizing the phenomenon of organizational social capital can increase their competitiveness
in todays globalised world.
Keywords: Organizational Social Capital; Human Resources Management; Organizational Social Capital and Its
Importance in Human Resources Management

1.

INTRODUCTION

Organizational social capital emphasizes on the social dimension of "together we are stronger" saying in
the organization. In other words, organizational social capital can be expressed as the cooperation in addressing to a
common goal among the employees in the organization, strong social networks, and breathing the same air in an
atmosphere of confidence and working enthusiasm that is a reflection of "robustness of a chain is as much as the
robustness of the weakest link" saying.
In the study, organizational social capital is introduced conceptually as well as it is noted that it is a
phenomenon that has the characteristic of catalyst to be used by the human resource managements in increasing
competition nowadays.
2.

ORGANIZATIONAL SOCIAL CAPITAL

It has been observed that the studies of Bourdieu, Coleman, and Putnam exposing and deepening "Social
capital," conceptually gained intensity after 1990s when the location of social relationships in economic activities
drew the attention. Coleman and Putnam who are called as the functionalist of the social capital indicate that social
relationships increase the economic interaction in this context.1

Bourdieu, evaluates social capital as instrumental. According to Bourdieu, social capital; is the total of real or potential sources gained by an
individual or a group thanks to having mutual recognition and definition that is more or less institutionalized in permanent relationships network
(Eki, 2009, p. 11). Differently from Putnam and Coleman, Bourdieu (with the recognition of the effects of social capital on economic activities)
affirms the concept. He examines the approach by a critical approach.
In this respect, while Bourdieu is insisting on power relations, concrete network links, logical strategies and individual benefits, Coleman focuses
on socialism, families, rational participants strategies and social benefits and Putnam tries to explain the subject in terms of civil traditions,
political systems and social benefits (Waldstrm & Svendsen, 2008, p. 1502).
1

Copyright by author(s)

362

The Clute Institute

The Clute Institute International Academic Conference

Munich, Germany 2014

Social capital expresses the social relationships between the people facilitating the emergency of creative
results. Through this capital type content of which is composed of social confidence, social norms and social
relationships, people have been trying to solve these common problems (Kapu, 2008, p. 269). Besides this, social
capital is a type of capital increasing other capital types such as economic, human, financial, and environmental
capital but separating from them for its unique characteristics. In an organization, the quality of social relationships
can be evaluated as employees perception about support level provided in an organization (Hagan, 1994; Boyas &
Wind, 2010, p. 381)
Social capital can be explained by three dimensions: the structural dimension, relational dimension and
cognitive dimension. Structural dimension of social capital means linking the individuals to information channels
for higher social interaction. It includes linking types, the individuals and/or groups consisting of individuals, the
types of the links patterned with the relationships among the organizations and the shape of the structure. Relational
dimension is expressed as the reliability of individual actors and the trust between members. The cognitive
dimension shows interactive understanding and sharing among members. Status of the parties covers the whole of
values given as reference values in interpreting the situations (Kervenoaelet et al., 2009, p. 796; Advice & Arbil,
2012, p. 729). In this context, these three dimensions consisting of this social capital is an indicator of the capacity
of ability to work together to achieve a common goal in the organization.
On the other hand, with the thought that the concepts such as "confidence," "interpersonal relations,"
"social interaction" are used to maximize the personal benefits, the social capital is being criticized, and it has been
stated that the values are commoditized by indicating them to be handled as capital (t & Erbil, 2009, p. 78).
However, if the social capital can manage well the potential advantages on one hand and the disadvantages on the
other hand (Rao, 2007, p. 733), it has the power to make a positive contribution to organizational performance.
Developing social capital focuses on network analysis and performance (Burt, 2000, p. 346). It focuses on
cooperation, effort, emotional and cognitive competence (ability) and intent in achieving the goals (School, 2003).
With this aspect, social capital may facilitate the value creation of organizations (Weber & Weber, 2007, pp. 13-14).
In this context, in the value creation process, the prevalence of trust and loyalty culture among members of the
organization can play a key role.
Organizational social capital, is the gain obtained as a result of enabling and sustaining the interactions
making it possible to increase cooperation and coordination among the employees and in the units of the
organization and the other actors outside of the organization (competitor businesses, suppliers, governmental and
non-governmental organizations, etc.) and to reach the new sources /produce new sources, catching and assessing
the opportunities for the purpose of using the sources owned by the organization in the best way in line with its
purposes (t & Erbil, 2009, p. 71).
The relevance of social capital with organizational performance led to increase the studies conducted on it.
The results obtained from some of the studies carried out on organizational social capital can be listed as follows:
Lin et al. (2006) has observed, as a result of the investigation they made on 125 firms using high-tech in Taiwan,
that the high-tech entrepreneurship has a complex structure and successful entrepreneurs make an adjustment taking
into account the interaction entrepreneurial strategies and the interaction of the skills due to the social capital (Lin et
al., 2006, p. 168). Chuanget et al. (2013) has detected in his study on 161 participants that there is a positive
relationship between human resources management applications and organizational social capital (Chuanget et al.,
2013, p. 678).
In conclusion of a research made on 310 professional, Chiu et al. (2006) observed that trust, reciprocity,
common vision, common language norms and motivation affects the information sharing behaviors of the
individuals in terms of organizational capital (Chiu et al., 2006, p. 1872). On the other hand, Krauseet et al. (2007)
studied on the effect of social capital at multi-level on performance by taking advantage of different performance
measurement tools. In conclusion of the study, when the social capital is considered in terms of shared values and
relations, buyers and suppliers, it is found to be significant in positive direction in decreasing the product cost and
the total cost and in terms of performance relationship.

Copyright by author(s)

363

The Clute Institute

The Clute Institute International Academic Conference

Munich, Germany 2014

Parallel to the developments in the world, the studies about social capital gained pace in Turkey. In the
Ninth Development Plan prepared for the period 2007-2013 in Turkey, it has been stated that the invest on human
will not generate the economic growth as much as being expected unless it is provided a suitable combination
between the social capital and human capital (Tysz, 2011, pp. 86-87). The prediction specified in the macro scale
can be said to be valid for the organizations forming a micro scale. In addition, as a social phenomenon, social
capital has a big role in affecting the development of intellectual capital development (Onyx & Bullen, 2000, p. 23;
Kapu, 2008, p. 267) and in case of being evaluated together interactively, it can be expected to have a significant
contribution in the success of the organization.
3.

ITS IMPORTANCE IN ORGANIZATIONAL SOCIAL CAPITAL AND HUMAN RESOURCE

MANAGEMENT

It is estimated by those who study on this that the individuals in the organization, the units composed of the
individuals or the organization itself may positively affect the activities of the organization in terms of the functions.
In access to resources, in the distribution of resources among units, in the development of new ideas or in accessing
to new ideas, the impact of social relationships is known.
However, it is needed to be evaluated that in what direction and to what extent business functions affect the
organizational social capital. The effects of applications about human resources management accepted as a basic
function of the businesses should be monitored in this regard.
The said requirement is supported by the nature of social capital. The social norms as interaction, trust and
expected social behavior which are often unwritten but recognized are expressed as the basic elements of social
capital. Social capital is not a value that can be produced in a definite time interval (now). It is cumulative (comes
from the past as blended) and a concept related to the future (including expectations, projections and strategies
identified in this context, and approaches) (t & Erbil, 2009, pp. 103-104). Considering that the human resource
management aims at enabling people to remain together and interact with each other and given the role of human
factor in ensuring accumulation and its transfer, the social capital must have been hooked to human resource
management.
Indeed, considering that social capital is in a collective nature and group norms and identities as well as the
expectations and beliefs functionally is examined with the concept of social capital (Gonczaryk, 2011, p. 63;
Walter et al., 2007, p. 700; Chiu et al., 2006, p. 1874), it is impossible to distinguish human resources management
from the concept.
Within the framework of the correlation that is expressed, there are some studies examining the effect of
human resource management on social relations and the business through social relations. Pelling & High (2005)
associate the ability of employees with the characteristics of social ties, thus they connect the said abilities to social
capital. However, Westermann et al. (2005) grounds informal social relationships and network ties on the conflict
management and collaboration norms; criticizes employees' social capital creation potential within the framework of
gender differences and makes a reference to the role of human resource management within this context.
Buller and McEvoy (2012), on the other hand, indicate the potential of the human resources management in
creating social capital in their study in which they associate human resources management with business strategy,
human resources and performance. Over this potential, they evaluate the effect of human resources on business
performance. Ardichvil et al. (2003) mention the social capital through social relationships in their study in which
they associate trust with information sharing within the framework of virtual working environment. They express
that the confidence provided within the environment encourages the information sharing, and strengthens the social
capital as well.
4.

CONCLUSION

The increase in confidence that is one of the basic elements of social capital plays a role in reducing audit
costs which is a very costly process. The effects of social capital on the development of human and intellectual
Copyright by author(s)

364

The Clute Institute

The Clute Institute International Academic Conference

Munich, Germany 2014

capital are undeniable. In addition, its ability to encourage cooperation both awakens the incentive of cooperation
with activities coordinated and leads to an increase in the information accumulation through the shared knowledge.
Thus, it has some benefits such as making a contribution in terms of reaching the aims of the organization and the
advantages of competition.
In addition, when the social capital is evaluated with its aspects such as providing a quality communication
within the organization, ensuring an environment of trust, establishing network ties among the employees and
integrating the employees with the organization, it plays a catalyst role in increasing organizational commitment.
REFERENCES
1.
2.
3.
4.
5.

6.

7.
8.
9.
10.

11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

Ardichvili, A., Page, V., & Wentling, T. (2003). Motivation and barriers to participation in virtual
knowledge-sharing communities of practice. Journal of Knowledge Management, 7(1), 64-77.
Boyas, J., & Wind, L. H. (2010). Employment-based social capital, job stress, and employee burnout: A
public child welfare employee structural model. Children and Youth Services Review, 32, 380-388.
Buller, P. F., & McEvoy, G. M. (2012). Strategy, human resource management and performance:
Sharpening line of sight. Human Resource Management Review, 22(1), 43-56.
Burt, R. S. (2000). The network structure of social capital. Research in Organizational Behaviour, 22, 345423.
Chiu, C. M., Hsu, M. H., & Wang, E. T. G. (2006). Understanding knowledge sharing in virtual
communities: An integration of social capital and social cognitive theories. Decision Support Systems, 42,
1872-1888.
Chuang, C. H., Shyh-jer C., & Chuang, C. W. (2013). Human resource management practices and
organizational social capital: The role of industrial characteristics. Journal of Business Research, 66, 678687.
Eki, H. (2009). Sosyal Sermaye nemi, retimi ve lm zerine Bir Aratrma. Seluk niversitesi
Sosyal Bilimler Enstits Unpublished Doctoral Dissertation, Konya.
Gonczaryk, B. L. (2011). Corporate social capital: Results of empirical research in a financial institution.
Procedia Social and Behavioral Sciences, 10, 62-67.
Kapu, H. (2008). Sosyal Sermaye ve Organizasyonlarn ngr Yeteneini Gelitirme Gc, ktisadi ve
dari Bilimler Dergisi, 22, 259-288.
Krause, D. R., Handfield, R. B., & Tyler, B. B. (2007). The relationships between supplier development,
commitment, social capital accumulation and performance improvement. Journal of Operations
Management, 25, 528-545.
Lin, B. W., Li, P. C., & Chen, J. S. (2006). Social capital, capabilities, and entrepreneurial strategies: A
study of Taiwanese high-tech new ventures. Technological Forecasting ve Social Change, 73, 168-181.
t, A., & Erbil, C. (2009). Sosyal Sermaye Ynetimi, izgi Kitabevi Yaynlar, Konya.
t, A., & Erbil, C. (2012). Sosyal Sermaye Asndan Aktrler Aras likilerin Giriimcilik Niyeti ve
Uygulamalarna Etkisi, 11. Ulusal letmecilik Kongresi, Konya.
Partanen, J., Mller, K., Westerlund, M., Rajala, R., & Rajala, A. (2008). Social capital in the growth of
science-and-technology-based SMEs. Industrial Marketing Management, 37, 513-522.
Pelling, M., & High, C. (2005). Understanding adaptation: What can social capital offer assessments of
adaptive capacity? Global Environmental Change, 15, 308-319.
Rao, S. (2007). Safety culture and accident analysisA socio-management approach based on
organizational safety social capital. Journal of Hazardous Materials, 142, 730-740.
Sherif, K., Hoffman, J., & Thomas, B. (2006). Can technology build organizational social capital? The case
of a global IT consulting firm. Information and Management, 43, 795-804.
Tysz, N. (2011). Sosyal Sermayenin Ekonomik Gelime Asndan nemi ve Sosyal Sermaye
Endeksinin Hesaplanmas, Kalknma Bakanl Yaynlar, Ankara.
Waldstrm, C., &Svendsen, G. L. H. (2008). On the capitalization and cultivation of social capital:
Towards a neo-capital general science? The Journal of Socio-Economics, 37, 1495-1514.
Walter, J., Lechner, C., & Kellermanns, F. W. (2007). Knowledge transfer between and within alliance
partners: Private versus collective benefits of social capital. Journal of Business Research, 60, 698-710.

Copyright by author(s)

365

The Clute Institute

The Clute Institute International Academic Conference

21.
22.

23.

Munich, Germany 2014

Weber, B., & Weber, C. (2007). Corporate venture capital as a means of radical innovation: Relational fit,
social capital, and knowledge transfer. Journal of Engineering and Technology Management, 24, 1135.
Westermann, O., Ashby, J., & Pretty, J. (2005). Gender and social capital: The importance of gender
differences for the maturity and effectiveness of natural resource management groups. World Development,
33(11), 1783-1799.
Zhao, L., Lu, Y., Wang, B., Chau, P. Y. K., & Zhang, L. (2012). Cultivating the sense of belonging and
motivating user participation in virtual communities: A social capital perspective. International Journal of
Information Management, 32, 574-588.

Copyright by author(s)

366

The Clute Institute