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Content uploaded by Mark W. McElroy
Author content
All content in this area was uploaded by Mark W. McElroy on Jun 27, 2015
Content may be subject to copyright.
Content uploaded by Mark W. McElroy
Author content
All content in this area was uploaded by Mark W. McElroy on Jun 27, 2015
Content may be subject to copyright.
Rethinking Social Capital Theory –
A Knowledge Management Perspective
By Mark W. McElroy, René J. Jorna, and Jo van Engelen
Introduction
The social capital literature is now quite extensive with hundreds of papers and
dissertations having been published by as many students and scholars from
around the world (Ostrom and Ahn, 2005, p. xi). Most of this activity has occurred
within the past twenty years, thanks in large part to the influence of James S.
Coleman (1990) and Robert Putnam (1993; 2000).
At this point, it is possible, we think, to put forward a kind of synthesis of social
capital theory that can be expressed in terms of what many, if not most, scholars
in the field think social capital is and what its major competing schools of thought
appear to be. Once we have developed such a synthesis, the substance of social
capital can then be subjected to further analysis in order to (a) understand what it
fundamentally is, (b) what its role in our personal and social lives appears to be,
and (c) where it comes from or how it comes to exist.
Now all of this, we will argue, not only has important implications for social
development and action theory, but also for the field of Knowledge Management
(KM). For as we will show, most of what passes for social capital is only so many
forms of knowledge. It is precisely the care and feeding of our individual and
collective capacity to create such knowledge that at least some current
conceptions of Knowledge Management see as their primary purpose (Nonaka
and Takeuchi, 1995; McElroy, 1999; McElroy, 2003; Firestone and McElroy,
2003). For them, Knowledge Management might as well be called Social Capital
Management, the purpose of which is to have impact on the quality of action
taken in human social systems by quality-controlling the logic and execution of
learning and problem-solving.
In this paper, we emphasize collective action, but this focus does not rule out the
importance of individual actors. Indeed, every collective consists of (groups of)
individuals; and individual behavior and knowledge, in turn, are necessary
ingredients for collective action and knowledge. This individual perspective can
best be integrated with a view of collectives as Multi-Actor Systems (Gazendam
and Jorna, 1998; Helmhout, Gazendam and Jorna, 2004).
To fully appreciate our thesis, then, one must be able to see social capital as a
blend of individual and collective knowledge. And that will be one of our goals.
Another will be to call attention to a different kind of social phenomenon which is
usually missing from the social capital literature, but which arguably deserves a
Copyright © 2006 Emerald Group Publishing
full seat at the table – namely, social learning or innovation, or what some refer to
as, 'social innovation capital' (McElroy, 2002); or in other contexts, 'knowledge
creation' (Nonaka and Takeuchi, 1995; Jorna, 2006).
What makes social innovation capital so important to social capital theory is that
it is arguably the source of most of the other forms of social capital that we rely
on. Thus, it may be the most valuable form of social capital, even though it is
rarely acknowledged as such in the literature. We will call further attention to this
error of omission in the literature in our more extended remarks below, as well as
to certain notable cases of inclusion; and also to our own views on how to correct
the problem by installing knowledge and learning, or innovation, into the fabric of
social capital theory where they clearly belong.
Finally, we will recognize social capital as a type of capital that humans can
produce on demand. Unlike some other forms of capital, such as natural capital,
when faced with shortages of social capital we can simply create more of it. To
the business of managing the production of social capital, we will give the name
'social capital constructivism'.
A Synthesis of Social Capital Theory
For present purposes, we propose to synthesize social capital theory from two
different perspectives: 1) Major Schools of Thought, and 2) Analytical Aspects of
Social Capital. Before we do either, however, we wish to offer our own definition
of what social capital is:
Social capital consists of knowledge and organizational resources
that enhance the potential for individual and collective action in
human social systems.
Here we adopt the view that social capital theory is a species of action theory
(Coleman, 1990, p. 304; Putnam, 2000, p. 288; Ostrom and Ahn, 2003. pp. xiii-
xv). As the latter two authors put it, "social capital is a general rubric. The
fundamental theoretical question is how collective action is achieved" (Ostrom
and Ahn, 2003, pp. xv–xvi). Thus, the ultimate question for us is how does social
capital contribute to making individual and collective action possible.
We also wish to point out that given our definition above, social capital is, strictly
speaking, two steps removed from action itself (see Figure 1). First, there are the
resources that we call social capital, such as trust, rules, norms, etc.; and then
there is the potential for collective action that people (or actors) might actually
use or appropriate. And even when such collective resources have been
developed and are available, all of that still differs from their delivery (i.e., through
action) to users or co-actors of such action who need it.
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Social Capital
Capacity for Collective
Action of Some Kind
Collective Action
Collective Action Consumed
or Appropriated
A
Collective
Actor
An Individual
or Collective
Figure 1 – Social Capital’s Chain of Influence
We will come back to our definition of social capital shortly. Let us now move on
to our syntheses.
- Major Schools of Thought in Social Capital Theory
Much of what we see in the social capital literature can be organized into two
broad classifications (Sandefeur and Laumann, 1988; Adler and Kwon, 2000;
Lesser, 2000): 1) ego-centric or psycho-centric theories (e.g., Granovetter, 1973;
Burt, 1992; Coleman, 1990; Portes, 1998), and 2) socio-centric theories (e.g.,
Brehm and Rahn, 1997; Fukuyama, 1997; Putnam, 1995).
These two orientations to social capital theory differ mainly in terms of who or
what they see as the focal actor in action-oriented scenarios. In the case of ego-
centric theory, the focal actor is an individual who appropriates resources from
social networks or relationships in which he or she is situated, in order to take
individual action.
In the case of socio-centric theory, the focal actor is a collective, such as an
organization or a society, and social capital is found in "the internal linkages that
characterize [their] structures [and which] give them cohesiveness" (Adler and
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Kwon, 2000, p. 92) and an enhanced capacity for collective action. Collective
action may then be appropriated by users who need it, be they the host
organizations or social systems themselves (for their own sake), or their
constituents or stakeholders for whose benefit such systems exist.
Because we take the perspective of the individual in any Social Capital Theory
for granted, our orientation is in line with the socio-centric school. In particular,
we intend to show in this paper how the collective capacity to take action in
human social systems can be seen as something which rests on a view of social
capital as knowledge. But we will also go one step further. If most of what passes
for social capital is only one form of knowledge or another, as we claim, we must
also concern ourselves with the question of how such knowledge is produced.
And so we will.
This question of how social capital is produced is not altogether missing from the
literature, just insufficiently stressed, in our view, with few exceptions (see, for
example, Bourdieu, 1985; Coleman, 1993). Coleman, in particular, argued
strongly that sociology must give more deliberate attention to "purposively
constructed organization", and that to be fully relevant, contemporary training in
sociology must teach "both undergraduates and graduates, to be the architects
and architectural aides in the design of social institutions" (1993, p. 14).
Like Coleman, Putnam claims that "it is within our power to reverse the decline of
[social capital over] the last several decades" (2000, p. 25), and that "applied
social capitalism" (Ibid., p. 317) which focuses on creating and activating local
social capital can be effective in restoring the capacity of people in communities
to take collective action.
For purposes of this paper, we wish to explicitly align ourselves with Coleman's
views on constructed social capital, and Putnam's as well, and shall refer to this
school of thought as social capital constructivism of the socio-centric type. It is
supply-side in its orientation because of its focus on the production of social
capital (in the form of organizations and other kinds of social institutions), and it is
socio-centric because the focal actor envisioned in such acts of production are
collective actors, not the least of which may be society itself – that is, society (or
organizations, for that matter) creating social-capital-laden institutions for the
purpose of facilitating collective action of importance to its own members or to
others who need it.
We will return to this idea shortly, but let us first turn to our synthesis of the
analytical aspects of social capital.
- Analytical Aspects of Social Capital Theory
The key issue we would like to address next is what social capital consists of.
What does it amount to, or what forms does it take? Of course, the literature is
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full of competing points of view on this question. Adler and Kwon (2000), for
example, provide a listing of no less than sixteen different definitions from
different authors, each classified as to whether it fits within the ego-centric
school, socio-centric school, or both.
Despite the differences found in the literature, there are substantial areas of
overlap as well – significantly so. Our aim here will be to confine our remaining
discussion to only those areas of significant overlap between prevailing theories
of social capital which most scholars seem to agree account for the bulk of the
phenomenon. In particular, we will address the following major elements, or
forms, of social capital: Trust, Beliefs, Norms, Rules, and Networks.
Briefly described below, then, are the five major forms of social capital of interest
to us. For the sake of brevity, we will only include one or two references from the
literature for each, relying as we do on perspectives that we think are sufficiently
representative or emblematic of current, mainstream thought.
- Trust
For Putnam, "trust is an essential component of social capital" (1993, p. 170).
"Trust lubricates cooperation. The greater the level of trust within a community,
the greater the likelihood of cooperation. And cooperation itself breeds trust"
(1993, p. 171); "Social networks allow trust to become transitive and spread: I
trust you, because I trust her and she assures me that she trusts you" (Ibid., p.
169).
Fukuyama defines trust as "the expectation that arises within a community of
regular, honest, and cooperative behavior, based on commonly shared norms,
on the part of other members of that community" (1995, p. 26).
Some scholars also make the all-important distinction between the trust of a
trustor, and the trustworthiness of a trustee. Ostrom and Ahn (2003) see both as
important forms of social capital. As for trustworthiness, they say, "We
emphasize that individuals' intrinsic values are an independent reason for
behaving cooperatively and reserve the term trustworthiness primary to refer to
such intrinsic motivation" (Ibid., p. xix). We will come back to this statement later
on in our analysis of social capital as knowledge.
- Beliefs
Although beliefs are by definition held by human individuals, Coleman sees
mutually-held or shared beliefs as fundamental to the process of collective
action, and as closely tied to the flow of information in networks. He says, "The
role of information in changing rights through changing beliefs suggests a major
source of the power inherent in the control of information" (1990, p. 55).
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Adler and Kwon assert the importance of shared beliefs to social capital as
follows: "Social capital stems in part from the availability of a common belief
system that allows participants to communicate their ideas and make sense of
common experiences. Such communicative resources allow common world-
views, assumptions, and expectations to emerge among people and facilitate
their joint action" (Lesser, Ed., Chapter 5, p. 99).
- Norms
Norms are perhaps the most commonly discussed form of social capital in the
literature. According to Coleman, "a norm is a property of a social system, not of
an actor within it" (1990, p. 241). Norms "specify what actions are regarded by a
set of persons as proper or correct, or improper or incorrect" (1990, p. 242).
Coleman's definition of what a norm is clearly rests on statements. In other
words, a norm is often expressed in linguistic form as a kind of policy, so that all
who may be subject to it can be aware of its existence and content. Thus, he
says, "Norms can only arise when there is communication" (1990, p. 253); and
they "depend on regular communication" (Ibid., p. 321). He goes on to add,
however, that "individuals do internalize norms" (Ibid., p. 293), and that
predictions of behavior must therefore take the internalization of norms into
account.
Putnam claimed that "Voluntary cooperation is easier in a community that has
inherited a substantial stock of social capital, in the form of norms of reciprocity
and networks of civic engagement" (1993, p. 167). Indeed, he later defined social
capital as something which "refers to connections among individuals—networks
and the norms of reciprocity that arise from them" (2000, p. 19). Ultimately, what
makes norms of reciprocity qualify as social capital for Putnam is that "they lower
transaction costs and facilitate cooperate cooperation" between individuals
(1993, p. 172).
Elinor Ostrom provides what is perhaps the most rigorous treatment of norms to
be found in the literature (2005). She does this by specifying and applying a very
precise syntax that can be used to distinguish between norms and rules.
According to her syntax, the main difference between a norm and a rule is that
while both are statements that can permit, prescribe, or proscribe action, a rule
includes an "OR ELSE" specification of reinforcements or sanctions, whereas a
norm does not (2005, p. 140). Thus, a norm can be said to be 'softer' than a rule.
According to this view, what Coleman and Putnam describe as norms are really
not norms at all because they come with sanctions attached. From Ostrom's
perspective, they are rules.
- Rules
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Coleman speaks of rules in practical, instrumental terms. He says, "Like other
forms of capital, social capital requires investment in the designing of the
structure of obligations and expectations, responsibility and authority, and norms
(or rules) and sanctions which will bring about an effectively functioning
organization" (1990, p. 313).
Putnam also cites the importance of rules in his work. In explaining his theory of
alternative possible societies in terms of evolutionary equilibriums, he wrote, "In
other words, reciprocity/trust and dependence/exploitation can each hold society
together, though at quite different levels of efficiency and institutional
performance. Once in either state of these two settings, rational actors have an
incentive to act consistently with its rules. History determines which of these two
stable outcomes characterizes a given society" (1993, p. 178-179).
As already mentioned, Ostrom prefers to think of rules as norms with teeth, so to
speak. Rules come with reinforcements or sanctions attached, norms do not. In
her joint work with Ahn (2003), they say: "Rules are the results of human beings'
efforts to establish order and increase predictability of social outcomes […]
Therefore, a rule of law, a democratic atmosphere, and a well-structured
government (if these exist) are valuable social capital for any society" (Ibid.).
- Networks
As Putnam points out, "the core idea of social capital theory is that social
networks have value. Just as a screwdriver (physical capital) or a college
education (human capital) can increase productivity, so too social contacts affect
the productivity of individuals and groups […] social capital refers to connections
among individuals—social networks and the norms of reciprocity and
trustworthiness that arise from them" (2000, pp. 18-19). Elsewhere he refers to
social capital as "[n]etworks of civic engagement" (1993, p. 173) and "networks of
reciprocity" (2000, p. 81).
Ostrom and Ahn (2003) see networks as one of three "broad forms of social
capital that are particularly important in the study of collective action" (p. xiv). Like
Putnam, they claim that "dense networks of social exchange are a crucial
condition for the rise of the norm of generalized reciprocity" (p. xxi); and also that
trust is enhanced when individuals "are networked with one another in multiple
ways, and are within institutions that facilitate the growth of trust" (p. xvi).
* * *
With the obvious exception of how beliefs are handled by scholars in the social
capital field, it should be clear from our synthesis above that most of what passes
for mainstream thinking in the literature has failed to recognize social capital as
consisting mainly of knowledge. So let us now turn our attention to the business
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of correcting that error. In order to do so, however, we must first explain what we
mean by knowledge.
What Is Knowledge?
Here we have chosen to rely on a definition of knowledge developed under the
auspices of the Knowledge Management Consortium International over the past
several years (see, for example, Firestone and McElroy, 2003, Chapter 1). The
most recent derivative of that work reads as follows:
Knowledge is a tested, evaluated and surviving structure of
information (e.g., DNA instructions, synaptic structures, beliefs, or
claims) that is developed by a living system to help itself solve
problems, and which may help it to adapt.
Of particular relevance to our present analysis of social capital theory are two
types of knowledge found in human social and organizational settings: 1)
subjective personal knowledge, or knowledge in minds such as beliefs, and 2)
objective or sharable knowledge, or knowledge expressed in linguistic forms
such as in books, theories, and claims (Popper, 1972). Thus, we take a pluralistic
view of knowledge and regard some knowledge as internal or endosomatic to
humans (in minds), and other knowledge as external or exosomatic (in
statements, polices, books, etc.).
In taking this position, we explicitly reject the classical notion of knowledge as
'justified true belief' so often found in interpretations of Plato. We do so because
of our view that knowledge can be expressed in exosomatic forms (i.e., is not
restricted to beliefs in minds), and also because of our respect for fallibilism: the
view that humans can never really justify their knowledge as true with certainty
(see, for example, Peirce, 1955 and Popper, [1935] 1959, 1963).
Now because of our position, which recognizes the existence of
knowledge expressed in linguistic form, we can (and should) reasonably
ask: What kinds of statements made in language can legitimately be
viewed as knowledge? Certainly not all statements made in language
count as knowledge. How can we recognize those that do, including the
types of social capital that happen to take linguistic form and which we
allege are knowledge?
This leads us to the theory of language functions, and ultimately to the
work of Karl Bühler, the late-nineteenth and early-twentieth century
German psychologist. Bühler – who, incidentally, was a teacher of
Popper's in Vienna – was perhaps the first to propose the doctrine of the
three functions of language (Popper, 1963, p. 295): 1) the expressive or
symptomatic function, 2) the stimulative or signal function, and 3) the
Copyright © 2006 Emerald Group Publishing 8
Descriptive
1
Signalling
1
Expressive
1
Argumentative
3
Decisional
4
Lower
Functions
Higher
Functions
Value
Predicative
2
Normative
2
Assertive
4
Notes: 1. Proposed by K. Bühler.
2. Proposed by E. Hall.
3. Proposed by K. Popper.
4. Proposed by J. Firestone and M. McElroy
from an interpretation of Popper.
Notes: 1. Proposed by K. Bühler.
2. Proposed by E. Hall.
3. Proposed by K. Popper.
4. Proposed by J. Firestone and M. McElroy
from an interpretation of Popper.
Evaluative
2
Figure 2 – A Hierarchy of Language Functions*
*Source: Joseph M. Firestone and Mark W. McElroy, 2006 (Unpublished)
descriptive function (Buhler, 1934). According to Bühler, these are three
basic things that we humans do with language.
To Bühler's three functions, others can be added that arguably correspond
to other ways in which we use language that are of importance to our
discussion of knowledge (see Figure 2). In particular, Popper proposed
the addition of the argumentative function (1963, p. 295), and Hall (1952,
pp. 154 and 162; 1961, p. 166) proposed the normative and value
predicative functions, which instead of asserting facts as descriptive
functions do, assert values, instead. Hall combined the two into a single
evaluative category (1961, p. 205).
Firestone and McElroy then combined Hall's evaluative and Buhler's descriptive
functions into a single assertive function (Firestone and McElroy, 2006), since
both involve making assertions or claims about the world; and they also added
the decisional function based on a close reading of Popper's critical method
(Popper, [1934] 2002, pp. 91-92). For Popper, it was decisions which "settle the
fate of theories" (Ibid., p. 91). And when we express such decisions in language,
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we employ a function of language that is like no other; that is, we express
choices, or judgments made about knowledge claims. Thus, to answer the
question we posed earlier, linguistic knowledge is made up only of those
knowledge claims that survive our decisions about refutation, along with the
meta-claims providing the background for those decisions. Other knowledge
claims that have not survived, or that remain untested are not linguistic
knowledge.
Now before we move on to consider the specifics of our Knowledge-
Management-inspired view of social capital theory, we wish to pause for a
moment and call the reader's attention to the fact that the assertive
function of language encompasses knowledge of both fact and value. In
other words, we can not only make claims about the world in terms of the
way we think it is, we can also do so in terms of the way we think it ought
to be. Thus, we can assert knowledge of both fact and value (Hall, 1952,
1961). This insight will be critically important to our inspection of social
capital theory, which it is now time to do.
Social Capital As Knowledge
Let us now take each of the major forms of social capital (trust, beliefs, norms,
rules, and networks) and examine them carefully in light of our thesis – i.e., that
most of them can be seen as merely one form of knowledge or another, and that
like all other human social or cultural knowledge, they are our products.
- Trust
We agree with Adler and Kwon when they say that trust "is a psychological state
of individuals" (Lesser, Ed., Chapter 5, p. 101); and we rely on Ostrom and Ahn
(2003) for our reasons for doing so. Drawing on Gambetta (2000), Ostrom and
Ahn define trust as "a particular level of the subjective probability with which an
agent assesses that another agent or group of agents will perform a particular
action" (2003, p. xvi).
Similarly, Numan defines trust as a mental action which "is an expectation which
person A has of an actor B – that this actor B will act positively towards the goals
which the trusting person A has" (1998, p. 36).
All of these writers are referring to what one agent may believe another agent will
do at some point in the future. Thus, they are referring to factual beliefs held by
agents about some future state of affairs concerning other actors, but also
concerning our physical surrounding. Trust, then, is a kind of belief. It is an
attitude or predisposition towards a belief, or a belief about a belief. It is an
agent's belief in the probability that another agent will do what he or she says
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they will do. In that regard, it is a factual form of subjective knowledge – beliefs
about what will be in the future.
Turning to trustworthiness, as opposed to trust, again we are dealing with a type
of personal or subjective knowledge that we can think of as the complement of
trust. Here we can make a distinction between a trustor and a trustee. If a
trustor's trust is a belief in the probability that a trustee will take some action, a
trustee's trustworthiness is a belief in the probability that being trustworthy will
fetch favorable or desired results from trustors.
In their own treatment of trustworthiness as a core form of social capital, Ostrom
and Ahn say, "We emphasize that individuals' intrinsic values are an independent
reason for behaving cooperatively and reserve the term trustworthiness primarily
to refer to such intrinsic motivation" (2003, p. xix). They add, "We think that a key
aspect of trust is the belief about others' intrinsic motivation—trustworthiness"
(Ibid., p. xx). They go on to say that "trust and trustworthiness are integral
elements of reciprocity", which itself is a "moral norm" (Ibid., p. xi).
Thus, a commitment to trustworthiness can be seen as either a kind of factual
knowledge involving instrumental beliefs about what will happen if one is
trustworthy, or else belief in the intrinsic value of being trustworthy. One is factual
knowledge, the other is valuational knowledge. Either way, being committed to
trustworthiness is a type of knowledge, which is held either in the form of
personal (subjective) beliefs, or culturally in the form of linguistically-shared
(objective) assertions.
- Beliefs
Our thesis here is self-evident, we think. Beliefs are clearly a form of mental, or
subjective knowledge. Here, however, we are talking about beliefs that we think
multiple individuals may share in a collective setting of some kind. In other words,
the contextual backdrop we assume is a social one in which multiple individuals
share some sort of collective action goal; the point being that shared beliefs
about how to take collective action can obviously enhance the taking of related
action.
It is also worth noting here that when a belief is expressed in linguistic form, an
objective form of knowledge is created. In terms of the language functions shown
in Figure 2, all such expressions could be any of the higher-level functions shown
in the hierarchy, most commonly the assertive functions.
- Norms
Following from our early discussion of Coleman's views, norms as knowledge
can either be subjectively held in minds or objectively expressed in the form of
statements. On the surface, all norms might appear to be evaluative assertions of
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one sort or another, such as normative prescriptions. However, value knowledge
can consist of (or express) either intrinsic values or extrinsic values. In actuality,
extrinsic values reduce to descriptive or instrumental beliefs or claims. For
example, to say 'X ought to do Y' very often means 'If X does Y, Z will happen',
which is a factual or descriptive knowledge claim, not an evaluative claim. Thus,
such claims easily reduce to factual claims and are not really value claims at all.
Intrinsic value beliefs or claims, however, are truly normative or value predicative
and deserve separate treatment. This is because they speak of the desirability or
fitness of ends for their own sake, and not merely of means for the instrumental
sake of obtaining something else. Still, whether a norm is descriptive or truly
evaluative in form, it is a type of knowledge that we produce – be it knowledge of
facts or knowledge of values, as the case may be.
- Rules
As noted above, Ostrom (1995) defines rules as simply norms with "OR ELSE"
reinforcements or sanctions attached. Unlike norms, however, rules can only
exist in linguistic or objective form. They are statements, not beliefs. And to the
extent that they are evaluative kinds of statements in content, they express
knowledge of values, or claims of values. And like norms, rules reduce to either
means-oriented descriptive statements, or bona fide expressions of ends-
oriented intrinsic values.
As Ostrom and Ahn put it in their discussion of rules as institutions, "Institutions
are thus the rules of the game that people devise" (Ostrom and Ahn, 2003, p.
xxii). Rules, then, are a type of knowledge that people produce.
- Networks
Now we come to the last major element of social capital so often cited in the
literature: networks. We have chosen to deal with networks last because of the
importance of calling attention to the knowledge-based nature of the other
elements first. Why? Because networks are both the producers of social or
culturally-held knowledge – networks of a particular type, that is – and outcomes
of such networks. And this is what we wish to discuss.
All social systems are, of course, networks of one kind or another, so to say that
networks are features of social capital is arguably redundant. There are,
however, certain kinds of sub-networks within social networks that are of special
significance to our thesis, and those are networks within social systems that
actually produce social knowledge.
Previous works have referred to these sub-networks as "social innovation capital"
(McElroy, 2003). Their relevance to our thesis in this paper is simply that along
with trust, beliefs, norms, and rules, they (let us call them "social innovation
Copyright © 2006 Emerald Group Publishing 12
networks") comprise another very important form of social capital that is rarely
stressed in the literature. They are not knowledge, per se; rather, they are
distinctive patterns of social activity through which the shared knowledge that
makes collective action possible is produced. They therefore deserve special
recognition in our typology of major forms of social capital, and that is what we
wish to propose.
Apart from our own prior work, several others have at least brushed up against
this idea, if not stood on the same ground (see, for example, Nonaka and
Takeuchi, 1995; Fountain, 1998; Nahapiet and Ghoshal, 1998; Firestone, 2003;
and Cavaleri, 2005 to name just a few). Nahapiet and Ghoshal, in particular
(1998), wrote of an "organizational advantage" held by organizations by dint of
their capacity to produce new knowledge or "intellectual capital". Focusing, as we
do, on knowledge as a form of social capital and networks of knowledge
processes as its source, Nahapiet and Ghoshal make the following statement
(Ibid., p. 147):
"Thus, we suggest that differences between firms, including
differences in performance, may represent differences in their
ability to create and exploit social capital [or knowledge, in our
terms]. Moreover, at least regarding the development of intellectual
capital, those firms developing particular configurations of social
capital are likely to be more successful [emphasis added]."
We cannot be sure of what Nahapiet and Ghoshal meant by "particular
configurations" of social capital, but we certainly know what we mean. What we
mean is not just configurations of knowledge as social capital required to take
collective action, but also – and most importantly – particular patterns of social
innovation networks that are either administratively created (top-down) or which
emerge (bottom-up) under their own steam (McElroy, 2003, Chapter 6; 2004),
and which make it possible for social systems to solve problems, learn, and
adapt.
Here we hasten to add that we are not just talking about organizations as
Nahapiet and Ghoshal were. Rather, we are talking about social systems at all
levels of analysis, and about how social capital makes collective action and
development possible for them all.
While Nahapiet and Ghoshal failed to provide any sort of model or framework for
what such a "particular configuration" of what we're calling social innovation
networks might look like, we are prepared to do so. Here we call attention to a
social pattern of knowledge processing developed by members of the Knowledge
Management Consortium International (KMCI) over the past several years (see,
for example, McElroy, 2002, 2003; Firestone and McElroy, 2003). Known as the
Knowledge Life Cycle (see Figure 3), KMCI's model depicts a characteristic
pattern of collective problem solving and knowledge production (with embedded
Copyright © 2006 Emerald Group Publishing 13
individual and group learning), which ranges from the discovery of knowledge
gaps in everyday behavior, to knowledge production and integration in response.
Figure 3 – The Knowledge Life Cycle: A Pattern of Social Innovation
(Source: Mark W. McElroy, Ph.D., Joseph M. Firestone, Ph.D. and the Knowledge Management Consortium International)
For us, then, it is not just the overall networks at the macro level of a social
system that comprise valuable social capital. Rather, it is also the more
specialized social innovation networks that exist within social systems and which
make it possible for their members to collectively solve problems, learn, innovate,
and adapt. These networks are prone to variability in their strength and
effectiveness in human social systems, conferring high social capital value to
some systems and low value to others. And it is only those organizations who
take steps to manage such networks that should expect to benefit from them.
This leads us to our final point of importance in this paper; which is that
Knowledge Management (KM) has a critical role to play in not only the
development of social capital, but in the development of organizations and other
types of human social systems that rely on knowledge and social innovation
networks for their health and well-being. Leaving aside all other definitions or
interpretations of what KM is that may have come before, we take the position
that KM is a management discipline that aims to enhance knowledge processing,
or the quality of social innovation networks (McElroy, 2002, 2003; Firestone and
McElroy, 2003).
Copyright © 2006 Emerald Group Publishing 14
According to this view, KM has a vitally important role to play in the development
of larger social systems such as communities, regions, nations, and even
economies, and in their respective members' capacities to take collective action.
Actors in all of these systems fundamentally rely on knowledge, shared
knowledge, as a basis for taking collective action, and the quality of that action, in
turn, has everything to do with the quality of the knowledge used to take it. And
finally, the quality of knowledge in human social systems is arguably a function of
how well we have been able to operationalize our social innovation networks,
and whether or not we have strong, well funded KM functions to look after them.
Conclusions
In this paper, we have attempted to show that most of what passes for major
forms of social capital in the literature is only so many forms of knowledge. This
applies, in particular to trust, beliefs, norms, and rules. To support our thesis, we
focused on two forms of knowledge, one in mental or subjective form, such as
beliefs, and the other in objective or cultural form, such as claims, theories, and
assertions.
Apart from the more obvious inclusion of beliefs as a form of knowledge, our
claim that norms and rules are also forms of knowledge required us to show, first,
that knowledge can be of two types from a semantic point of view: it can consist
of assertions of fact, on the one hand, or assertions of value, on the other. To the
extent that norms and rules assert intrinsic values about how things ought to be
in the world, they are classic examples of value claims and as such are clearly a
form of knowledge.
We then went on to address the issue of networks as a form of social capital. Of
particular interest to us was not the entirety of social systems themselves as
illustrations of social capital, but a particular kind of sub-network within them that
we called 'social innovation capital' or social innovation networks. These
configurations of sub-networks, we argued, are of enormous value to social
systems such as cities, communities, organizations, and nations because they
exemplify the social processes all collectives need in order to produce new,
shared knowledge. Indeed, we could say that the only form of social capital more
valuable than collectively held knowledge is the collective capacity to produce it.
This notion of social capital as something that we can collectively produce –
unlike, for example, natural or ecological capital – led us to our discussion of
constructed social capital, and to a branch of management that we called 'social
capital constructivism'. Here we claimed that not only is the knowledge that
people produce a product of their collective doing, but so too are their social
innovation networks.
Finally, we put forward the theory that Knowledge Management has an important
role to play in the development of social capital at multiple levels of analysis
Copyright © 2006 Emerald Group Publishing 15
(cities, communities, organizations, nations, etc.). Since effective collective action
at any one of these levels depends heavily upon the quality of shared knowledge
behind it, the quality of knowledge production as the source of such knowledge is
also of vital importance.
This, in turn, is precisely what some conceptions of Knowledge Management call
for: the care and feeding of our social capacity to solve problems, learn, and
adapt. Indeed, it is the vision of KM that we ourselves favor. And it is a vision of
Knowledge Management that is arguably indispensable to any rigorous theory
about how to develop sustainable knowledge-based cities, organizations or other
kinds of human systems.
* * *
So where do we go from here? Where we go, in our view, is resolutely in the
direction of further developing what we mean by social capital constructivism.
Why? Because the world is clearly in need of more social capital, and to meet
that need new research aimed at discovering how to produce it is required.
We have a theory about that. We believe that social capital resources are the
kinds of things that we can collectively create if we put our minds to it; and that if
we are to increase the production and availability of social capital in the world, it
must either come from human sources (i.e., from social networks) that already
have it, or from other sources which have the discretionary, if not surplus,
resources required to produce it.
As we see it, there are only two human institutions on Earth that fit this
description (not counting charitable foundations, which are already doing what
they can): governments and organizations, especially corporations. At the very
least, then, we need tools for measuring and reporting on the extent to which
governments and corporations are contributing to (or diminishing) the stock of
social capital available at the level of cities, communities, nations, and within their
own four walls. And in fairness to their stakeholders, we also need creativity
poured into the question of how such institutions – as the primary repositories of
human wealth on Earth – can contribute to the growth of social capital without
undermining their own stability. We ourselves are prepared to commit to these
goals, and we hope others will be as well.
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