Cultural, intellectual and social capital interactions to support financial capital 

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Context 1

... communication. Cross-cultural business communication on international projects is an important part of managing design on a project basis and managing for design on an organizational level. There are various strategies undertaken by organizations to manage design at both project and organisational levels. Within the context of design management, effective cross-cultural business communication becomes an important part of the organization’s ability to develop knowledge to export, enter new international markets and to then maintain a strategic position within various markets. Information internalisation and the translation of information into relevant knowledge have been identified as an important part of the internationalisation process of SMEs (Morgan et al. , 2003; Knight and Liesch, 2002). The capacity to efficiently overcome the challenges associated with cross-cultural communication in international contexts is greatly impacted by the extent to which firms can identify, maximise and utilise forms of social, cultural and economic capital. As indicated by London et al. (2005), there are three types of non-economic capital that are important for achieving client satisfaction on international projects including; social, cultural and intellectual. Social capital (SC) is the creation of personal relationships and networks based on trust built over time. Working in a network helps spread risks and marketing costs. Social capital has relevance for the project team networks and the organisation and client networks. According to Cohen and Prusak (2001, p. 4): In a study on the internationalisation of Danish architectural firms, Skaates et al. (2002) saw national construction industries as milieus or groups characterised by geographical areas. These milieus had a network of actors with a set of “rules and norms regulating the interactions between these actors” (Cova and Ghauri, 1996). Consistent with Cohen and Prusak’s definition, Skaates et al. (2002) defined social capital as recognition by other actors within the construction industry that the firm is a member of “their inner circle due to one’s dispositions . . . or one’s way of working and tacit knowledge”. Cultural capital (CC) entails physical “dispositions” such as “building visible buildings, winning design competitions, or obtaining important tenders” (Skaates et al. , 2002). These concepts are premised on the reputation of the firm in that the success of marketing architectural services “depends on the firm’s ability to sell and deliver a credible promise” (Lowendahl, 2000). It differs from social capital in that it is the high profile of a firm’s projects that marks the firm as having acquired a high level of cultural capital. Therefore, cultural capital is the firm’s highly regarded past achievements that create trust and credibility. This is different from trust that is formed through relationships or networks, which is social capital. A firm acquires cultural capital through building successful facilities, achieved partially through the public response to a facility’s cultural appropriateness, and partially through the design communities’ recognition of innovation in design. It can be likened to achieving a foothold in a market, where success often engenders further success. Bourdieu (as cited in Swartz, 1997), however, states that cultural capital is not only limited to such “physical dispositions”, whereby it also takes form in another dimension as the embedded “culture” of a firm . . . it refers to the ensemble of cultivated dispositions that are internalized by the individual through socialization and that constitute schemes of appreciation and understanding”. Therefore, a firm is also able to accumulate its cultural capital by employing and/or retaining staff of the desired “culture”. Intellectual capital (IC) is an organisation’s collective skills, experience, competences and knowledge and is critical to the sustainability of firms, particularly in international markets. According to Stewart (1997), the strength of a firm lies within its intangible assets, where he posits that intellectual capital of a firm is “the talents of its people, the efficacy of its management systems and the character of its relationships to its customers”. The understanding of cultural issues and market knowledge is one of the key success factors for firms when exporting their services (Draganich, 1998). A firm’s market knowledge and understanding of cultural issues typically arises from individual experiences with particular markets, clients and projects. General knowledge of a foreign market and the client is improved through successive completion of projects and these experiences create tacit knowledge. Such tacit knowledge will contribute towards achieving increased project performance. Financial capital is significant to all three types of non-economic capital as ultimately all three types are aimed at creating financial capital for the firm (refer to Figure 2). The notion that “economic capital is at the root of all other types of capital” and that these other types are in fact “transformed, disguised and forms of economic capital” is not a new concept at all (Bourdieu, 1987). For example, economic capital makes possible the investment in cultural capital by making possible the investment of time needed to accumulate cultural capital. The relationships between cultural, social and intellectual capital are complex (Bourdieu, 1987). The interrelationships between the types of capital is critical towards achieving effective briefing and design processes and attaining client satisfaction through project performance in terms of both facility and process performance. The performance is measured by achievement of project objectives, which should relate to client organisational objectives. The process performance is primarily measured by efficiency and effectiveness considerations. To achieve efficiency and effectiveness the working relationships between project team members throughout the briefing process is often critical. The development and enhancement of social and business relationships is affected by social capital. Social capital can also be enhanced by an effective exchange of intellectual capital. Briefing involves the development of clear client organisational objectives and project organisational objectives, which is impacted by an understanding of the values of the organization. To understand organisational values an understanding of the client’s culture is critical. Culture is of course both country and organisational and ultimately there is a project culture. It is not difficult to see that social and cultural capital can perhaps play a significant role in project performance. Clearly, intellectual capital is critical to the execution of a project. The concept of intellectual capital is not new either and the study of knowledge management is quite a large field and much has been written on this concept. The fundamental barrier within the briefing process has been described as the complex field of interrelating cross-cultural communication barriers. It has also been discussed that the extent to which a firm is able to strategically manage its non-economic capital resources – social, cultural and intellectual capital – reflects its ability to efficiently and effectively overcome such challenges. Furthermore, we propose that the capacity to positively and flexibly react to change, and responsively allocate and distribute the different forms of capital is a useful measure of a firm’s reflexive capability. In saying this it becomes clear that a firm’s reflexive capability is a critical factor in its capacity to effectively overcome the complexities of the briefing process, especially in international contexts. Figure 3 summarises the conceptual model of client satisfaction through effective briefing process related to types of capital. Reflexivity is a term which comes to us from sociology research and is a useful concept to borrow. According to Kenway and McLeod (2004) there are three main ways in which it is commonly used in sociological research. Key protagonists in the reflexivity field are Bourdieu (1987) and Giddens (1991). Kenway and McLeod (2004) when citing Pillow (2003) also suggest that “reflexivity is a much used term, over determined and under-defined with a multivalent lineage . . . ” For the purposes of this paper Giddens (1991) definition of reflexivity within the context of modernity is most useful. He suggests “modernity’s reflexivity refers to the susceptibility of most aspects of social activity, and material relations with nature, to chronic revision in the light of new information and knowledge” (Giddens, 1991, p. 20). To be able to chronically revise means a continual responsiveness to change by participants in the system. Participants need to have some sense of self-awareness about what practices they are embedded within and be conscious or perceptive of that constantly changing environment and the various processes. Participants not only need this openness to change but also the skills, mechanisms and culture that allow institutional change. To allow for change does not necessarily mean that everything is in a state of flux. This suggests that there is little need for learning and that past experience does not contribute to our current practices. Therefore, there are core principles that are not subject to change and boundaries should be placed around elements that are considered unchangeable. Within our study we are suggesting that a reflexive capability to the briefing process by architects is needed. The ensuing manner in which they strategically manage social, cultural and intellectual capital is highly appropriate to the complex and dynamic environment of international projects. A reflexive capability of the collective firm and its institutionalized culture is the ideal. In reality, architectural firms are typically ...