28/03/2007
Social Capital in Organisations
Social capital has been extensively discussed as a developmental tool. In addition, many research projects show the influence of social capital regarding social policies and social politics. However, over the last couple of years,managers and consultants discovered social capital as an important asset for firms and ultimately for any type of organisation.
For a long time it is part of common knowledge that organisations need financial capital and human capital to grow and perform well. Networks and relationships as an asset have often been neglected as an existing asset in firms. The people who form part of an organisation, the people who work together at one place, interact and cooperate in certain manners. Previously is has often been underestimated that those networks and relationship are essential for the efficiency of organisations. In addition, some authors argue that modern societies are more and more based on knowledge and information and the way of sharing such is most essential for organisations.
This is social capital at it simplest, the networks and relationships that shape an organisation and influence the organisational culture and efficiency off such.
Cohen and Prusak define social capital in their book ‘In Good Company – How Social Capital makes Organisations work’ as follow:
Social capital consists of the stock of active connections among people: the trust, mutual understanding, and shared values and behaviors that bind the members of human networks and communities and make cooperative action possible.[1]
Social capital definitions talk about interconnectedness and networks which are build on common values. The most important value is trust. Even though academics are still arguing if trust should be seen as a pre-condition for social capital or an outcome, they agree that trust is the core value for social capital.
What does that mean in practise?
There are many best-practise examples in the private sector where social capital underpinned the success and growth of big companies. Nevertheless, there are some data that show that social capital works as well in any type or organisation.
Following some practical examples will be presented:
Physical space for engagement: water stations, open-plan offices and escalators foster an environment of communication and information sharing. Space for informal interaction and information sharing is often used to talk about work and share experience.
Face-to-face communication: The new spread of information technology such as emails, webcams and chats are often seen as a substitute for personal talk and engagement. Research results show that face-to-face communication is still essential for the effectiveness of organisations. People develop trust when they talk to each other and interact. Trust is an essential driver for efficiency in organisations. Managers should ensure that they have regular staff meetings and that a lot of positive communication takes place in their units.
Share knowledge and information: Learning networks or communities of practise are important platform to share knowledge and information. The engagement of staff bottom-up in those networks provides staff members with an opportunities to discuss strategic issues and exchange newly gained knowledge with one another.
The boundaries that separateneed to be broken down. Issues like social exclusion, hierarchies, sexism, racisms, and disabilities are often issues that separate staff from one another. Cultural days or similar interventions will help staff to get to know each other.
Teamwork: Structures and systems, particularly in big organisations, often hinder the free-flow of information and foster a culture of silo-thinking. It is essential that staff is motivated to work cooperatively towards the common vision and mission of the organisation. Therefore, managers have to encourage their staff to work in cross-sectoral and cross-departmental teams. In addition, it is the responsibility of managers to create and environment where staff is enabled to do that.
There are many more examples of how to build social capital in organisations. This website will continue to seek for best-practise examples that will be published. The last part will explain why the Provincial Government of the Western Cape chose to apply social capital within the organisation.
In the Provincial Growth and Development Strategy of the Western Cape, iKapa elihlumayo, the Provincial Government spelled out that social capital is one of the leading strategies towards shared growth and development in the province. The responsibility for the implementation of social capital as an instrument for developmental and growth resides within the social cluster departments. In addition to the external implementation, the PGWC decided that the organisation itself, comprising ca. 68000 staff, is a microcosm of the Western Cape. Therefore, it has been decided to adopt social capital as a working approach internally to drive the change of mindset of public servants towards a developmental state.
The provincial government defines features of a developmental state as people-oriented, partnership-based, interventionist and well-managed. As a development approach social capital provides a lens through which policies, systems, processes can be aligned to developmental state.
The Chief Directorate Social Capital Development within the Department of the Premier is currently busy with the internal consultation of their ‘Internal Social Capital Strategy’ which will be published on this website later in the year. The strategy will provide a comprehensive overview of the role of internal social capital for the provincial government of the Western Cape.
If you have any further questions about the internal social capital within the PGWC, please contact the Chief Directorate Social Capital Development.
Our offices are based at the Golden Acre, 11th floor, tel. 021 466 9501
Dir. Social Capital Design: Almo Geldenhuys
Dir. Social Capital Implementation: Ntsietso Sesiu
Dep. Dir. Design:Nazneen
Dep. Dir. Design Carolin Gomulia
Dep. Dir. Implementation: Andile
By Carolin Gomulia
Chief Directorate Social Capital Development1
[1] Cohen and Prusak 2001: 4