Social Capital Theory Definition

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2.2 Social capital theory
An important interpretation of social capital recognized by Adler & Kwon (2002) is that the goodwill others have towards a person or company is a valuable resource . In order to understand social capital theory and comprehend how social capital theory can be applied to buyer-supplier relationships - in the field of supply chain management or business context in general - it is important to clarify the patterns and definitions that have emerged from earlier work regarding social capital in different fields of study. After reviewing and discussing social capital in comparison to other forms of capital and different conceptualizations of social capital theory, the definition used in this study will be provided.
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The first pattern, widely acknowledged by social network theorists, is that individuals can benefit from their own social capital. They consider social capital as a private good that can be used (for example) for career advancement (Burt, 1997). This view postulates that there is a single actor that acquires and builds social capital through social interactions and relations with other actors and then uses this social capital to gain personal benefits. The second pattern recognized by Inkpen and Tsang (2005) is the conceptualization of social capital as a public good which is an attribute of a social unit and not possessed by an individual. In this way, the availability and benefits are not only enjoyed by the creators but by the entire group (Kostova & Roth, 2003). In this study, social capital is regarded as a public good as it is argued that the company reaps the benefits of the social capital created between two or more individual actors of two…show more content…
These dimensions will be introduced here and further elaborated on during the hypothesis development. The first dimension of social capital is structural capital which is derived from structural embeddedness as imposed by Granovetter (1992). Structural capital refers to the overall configuration of connections between actors (Inkpen and Tsang, 2005) and can be seen as network ties which can be measured in density, connectivity and hierarchy (Nahapiet & Ghoshal, 1998). Structural capital is primarily focused on the frequency and level of interaction between two companies. The second dimension, relational capital, attempts to describe the particular relationship between two actors which is developed through a history of interactions and can explain their behaviour (Granovetter, 1992; Nahapiet & Ghoshal, 1998). Relational capital focusses on the strength of a relationship and is embodied by factors as trust, commitment, respect and reciprocity as imposed by Kale, Singh and Perlmutter (2000) and later adopted by many scholars (e.g. Carey, Lawson & Krause, 2011; Gelderman, Semeijn & Mertschuweit, 2016; Krause et al. 2007). Cognitive capital is the third and final dimension and refers to having shared interpretations, understanding and meaning between network members (Nahapiet & Ghoshal,
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