Relationship between social capital and organizational learning

Author: Iloka Benneth Chiemelie

Published: 9th of March 2014

The extent a company can achieve competitive advantage in the market is critically influenced by the level of effective knowledge transfer within the system. Notwithstanding the high volume of literature on organizational knowledge and effective transfer of such knowledge (Argote and Ingram, 2000, Hansen et al., 1999; Ingram and Roberts, 2000; Gupta and Govindarajan, 2000; Tsai, 2002; Zander and Kogut, 1995; Szulanski, 1996), there are a number of unresolved issues such as: if one phase of knowledge transfer will explain the other phase; the kind of knowledge that is being shared; and the effects, interrelations and significance of social context, connections or networks that enhance such transfers of knowledge. Both organization earning and control measures of the firm are internal mechanisms that enhance information processing as well as knowledge transfer (Popper and Lipshitz, 1998; Crossan et al., 1999; Guns, 1996; Turner and Makhija, 2006). The question now becomes, how can external mechanisms be used to enhance the process of knowledge transfer and overall organizational learning? The answer is clearly social capital. Social capital is the ability of actors to benefit by the virtue of their membership with particular social networks and this can be used to enhance the level of knowledge transfer both within and outside the organization (Yli-Renko et al., 2002; Wide´n-Wulff and Ginman, 2004, Nahapiet and Ghoshal, 1998; Inkpen and Tsang, 2005). From that argument, it can be seen that social capital helps improve overall organizational learning ability by feeding the system with relevant information about their consumers and how their products are perceived outside the company as well as necessary enhancement they can make to their products in order to be more competitive.

For instance, my company actively engages in Facebook, Twitter, Google+ and other social networks. On numerous occasions, I have received complaints about our products and services through these networks and it have helped in our overall learning ability and effectively increased our performance. Thus, social capital is very important because it increases the level of knowledge transfer between the company and its external environment; increasing the level of knowledge transfer and performance of the company effectively.

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