Article 311

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The Clute I nstitute I nternational Academic Conference Muni ch, Germany 2014

Copyright by author(s) 362 The Clute Institute

Organizational Social Capital And Its

Importance In Human ResourcesManagementA. Aslan endodu, Necmettin Erbakan University, TurkeyMeral 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 oforganizational 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 todaysglobalised world.

Keywords: Organizational Social Capital; Human Resources Management; Organizational Social Capital and ItsImportance in Human Resources Management

1. INTRODUCTION

Organizational social capital emphasizes on the social dimension of "together we are stronger" saying inthe organization. In other words, organizational social capital can be expressed as the cooperation in addressing to acommon goal among the employees in the organization, strong social networks, and breathing the same air in anatmosphere of confidence and working enthusiasm that is a reflection of "robustness of a chain is as much as therobustness of the weakest link" saying.

In the study, organizational social capital is introduced conceptually as well as it is noted that it is aphenomenon that has the characteristic of catalyst to be used by the human resource managements in increasingcompetition nowadays.

2. ORGANIZATIONAL SOCIAL CAPITAL

It has been observed that the studies of Bourdieu, Coleman, and Putnam exposing and deepening "Socialcapital," conceptually gained intensity after 1990s when the location of social relationships in economic activitiesdrew 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

1Bourdieu, evaluates social capital as instrumental. According to Bourdieu, social capital; is the total of real or potential sources gained by anindividual 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 focuseson 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).
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Social capital expresses the social relationships between the people facilitating the emergency of creativeresults. Through this capital type content of which is composed of social confidence, social norms and socialrelationships, people have been trying to solve these common problems (Kapu, 2008, p. 269). Besides this, socialcapital is a type of capital increasing other capital types such as economic, human, financial, and environmentalcapital but separating from them for its unique characteristics. In an organization, the quality of social relationshipscan 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 andcognitive dimension. Structural dimension of social capital means linking the individuals to information channelsfor higher social interaction. It includes linking types, the individuals and/or groups consisting of individuals, thetypes of the links patterned with the relationships among the organizations and the shape of the structure. Relationaldimension is expressed as the reliability of individual actors and the trust between members. The cognitivedimensionshows interactive understanding and sharing among members. Status of the parties covers the whole ofvalues 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 capacityof 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 beenstated 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 theother 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 oncooperation, 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 theorganization can play a key role.

Organizational social capital, is the gain obtained as a result of enabling and sustaining the interactionsmaking 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 andnon-governmental organizations, etc.) and to reach the new sources /produce new sources, catching and assessingthe 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 takinginto account the interaction entrepreneurial strategies and the interaction of the skills due to the social capital (Lin etal., 2006, p. 168). Chuanget et al. (2013) has detected in his study on 161 participants that there is a positiverelationship 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 theindividuals 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 performancemeasurement tools. In conclusion of the study, when the social capital is considered in terms of shared values andrelations, buyers and suppliers, it is found to be significant in positive direction in decreasing the product cost andthe total cost and in terms of performance relationship.

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Parallel to the developments in the world, the studies about social capital gained pace in Turkey. In theNinth Development Plan prepared for the period 2007-2013 in Turkey, it has been stated that the invest on humanwill 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 scalecan be said to be valid for the organizations forming a micro scale. In addition, as a social phenomenon, socialcapital 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 significantcontribution 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 theindividuals 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 accessingto 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 basicfunction 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 andexpected social behavior which are often unwritten but recognized are expressed as the basic elements of socialcapital. Social capital is not a value that can be produced in a definite time interval (now). It is cumulative (comesfrom the past as blended) and a concept related to the future (including expectations, projections and strategiesidentified in this context, and approaches) (t& Erbil, 2009, pp. 103-104). Considering that the human resourcemanagement aims at enabling people to remain together and interact with each other and given the role of humanfactor in ensuring accumulation and its transfer, the social capital must have been hooked to human resourcemanagement.

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 managementfrom the concept.

Within the framework of the correlation that is expressed, there are some studies examining the effect ofhuman 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 socialcapital. However, Westermann et al. (2005) grounds informal social relationships and network ties on the conflictmanagement and collaboration norms; criticizes employees' social capital creation potential within the framework ofgender 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 increating 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 whichthey associate trust with information sharing within the framework of virtual working environment. They expressthat the confidence provided within the environment encourages the information sharing, and strengthens the socialcapital as well.

4. CONCLUSION

The increase in confidence that is one of the basic elements of social capital plays a role in reducing auditcosts which is a very costly process. The effects of social capital on the development of human and intellectual

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capital are undeniable. In addition, its ability to encourage cooperation both awakens the incentive of cooperationwith 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 theadvantages of competition.

In addition, when the social capital is evaluated with its aspects such as providing a quality communicationwithin the organization, ensuring an environment of trust, establishing network ties among the employees andintegrating the employees with the organization, it plays a catalyst role in increasing organizational commitment.

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