Linking social capital to organizational growth

In the current discussion of the intellectual capital, three main themes have been brought up: intangible assets, the dynamic capabilities to create and modify these assets, and the social relationships in which the knowledge processes take place, that is social capital. Within the latter view, knowledge is understood as a socially constructed and shared resource, and the focus is on the characteristics of the social relationships connecting the various actors and on the benefits these bring to the participants. Even though it is widely agreed that knowledge is essentially social by nature and that social capital does matter to the corporate bottom line, there are relatively few previous studies that have empirically examined the impact of social capital on organizational growth. To bridge this gap, the paper empirically examines how social capital residing in both intra-organizational and inter-organizational relationships of firms is related with organizational growth. The results suggest that contrary to the theoretical claims in the existing literature, social capital has only meagre role in promoting organizational growth. Knowledge Management Research & Practice (2010) 8, 4-14. doi:10.1057/kmrp.2009.29