Social Capital

Outcomes of Social Capital

Robert Putnam, in his book Bowling Alone, argues that social capital carries vast importance, which allows resolving collective problems easily, increasing individual benefits by mutual cooperation, ensuring compliance with established norms, and alleviating the individual burden in carrying out their missions. It establishes an environment where people are trustworthy, which leads to repeated interactions and creates a cost-effective environment in businesses and social transactions. Social capital constitutes the flow of information, facilitates achievement of goals, and in general contributes a significant value to one's life.

Even though there are many affirmative outcomes of social capital, there is no guarantee that it will produce only positive results. First, social capital significantly facilitates access to broad resources of information and knowledge. A high level of social capital provides vast access to information resources and facilitates enhancement of timely and high-quality information. Second, the benefit of social capital can be described as influence, power, and control. Power factors affect the ability to get things done and increase leadership opportunities. The third benefit of social capital is solidarity. Organizations with high solidarity, culture, and norms take advantage of a reduced need for formal controls and monitoring. Frequent interaction among actors, faster dispute resolution, and increased organizational trust and commitment are affected by high solidarity. [Page 787]One of the main disadvantages of maintaining social capital is related cost effectiveness.

Social capital requires a substantial investment in development and maintenance of relationships. The establishment of these relations often results in being less cost-effective in certain situations. The development of strong ties among actors requires a large amount of time and resources, which are less cost effective. The provision of weak ties costs less and, more often than not, they are more preferable to use. Having contacts with actors who in turn also have contacts with other actors sometimes creates a vague situation. This means if the actor who receives information and is dependent on focal nodes and also has a relation with other actors, then it causes this actor to be less dependent on focal nodes and expands its power. While having positive sides, it also represents some negative aspects. Solidarity may affect the relationship among actors and decrease the flow of new ideas and innovation in order to preserve cohesion of the group. Actors may be so embedded and loyal to their organizations or each other that they lack the adaptation of novel ideas. Strong norms among actors may dictate the sharing of resources, which may discourage individual incentives and slow the development of social capital. Another risk factor is that powerful networks and a high level of social capital, if not utilized, can be used for wrong purposes, such as the destruction of others. Also, individuals or actors who behave differently than the accepted culture, tradition, and manner that are characteristic for networks may be banished or kicked out.

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