Social Capital

From outside to within


In the previous weeks, we have been looking at the use of social media in an external context; how businesses can add value to their operations and customer management through Web 2.0 technologies. Now we look within an organisation in terms of social capital and business capital in relation to employees and social media.

What is social capital?

OECD insights provide the following definition of social capital;

“those tangible assets [that] count for most in the daily lives of people: namely goodwill, fellowship, sympathy, and social intercourse among the individuals and families who make up a social unit”.

– Lyda Hanifan

Social Capital is not necessarily an organic result. Instead, the business culture that is fostered by the business that engenders people to have a sense of fellowship towards each other and the business is how social capital will be created.

Worldbank emphasise that the ‘capacity’ for ‘social interest groups’ to act in their interests depend on the support of governments but more importantly the business or private sector.The ultimate goal is to form ‘bridges’; linking that goes beyond shared identity. Team cohesion, for instance, is about employees who identify strongly with others in the group and are geared towards a certain goal.

The biggest value social capital has according to Worldbank is the fact that it is shaped by a group’s social and political environment which then, in turn, enables norms to develop. Hence, it is only natural for businesses to try to create norms and values in their corporate culture by building an environment with high positive social capital.

Challenges of social media and social capital

At a first glance, these look like the result of social media being more convenient and more cost effective than traditional paper methods that were previously used by companies.  However, effective social capital can be a hindrance if not maintained properly due to the below considerations.

Effectiveness and Efficiency


Digital Natives


The younger generations are now being described as ‘digital natives‘ or people who are completely comfortable with the increasing use of technology, particularly with social media. Their familiarity with technology can not only show how comfortable they are in  receiving information in this medium but also how they think can potentially be altered by it.

While HuffPost state that they share information and are values driven, this in turns means that the potential for social capital is great. On the other hand, Billout, mentions that being more technology-orientated has enabled him to efficiently find the information he needs is vastly improved. However, he also believes it has come at a cost of a decreased ability to concentrate and even down to the way he now contemplates has now been altered.


There are aspects of information being shared through technology particularly social media is a vital consideration. There may be a legal liabilities to keep information that has been sent through social media by employees. For instance, Sarbanes-Oxley Act states that all emails related to financial information must be kept.  Also, excessive personal use of employer networks and servers can result in network issues and data storage problems


Social media has always been a topic for hot debate particularly in areas relating to someone’s personal life and their professional life become blurred online. Where is the line between the privacy of employees and the representation required by businesses?

Rollingstone provides a  ‘brief history’ of people getting fired from businesses due to their behaviour online. In America,  police liaison, Allard was fired due to his joke about prison rape. Along the same lines, in New Zealand, video footage of prisoners fighting at Mt Eden Prison has led to investigations about the effectiveness of SERCO’s work in the prison, which is taxpayer funded. Both examples are two different aspects of privacy; the personal life of a person and the sharing of sensitive information that could be a result of a ‘whistleblower’.

How do we ‘mitigate’ some of these issues?

Listed below are some suggestions that were provided by author Mello from article, Social media, employee privacy and concerted activity: Brave new world or big brother?, I believe are vital steps towards balancing control and enabling trust;

  • Provide an information security guideline for employees: Plan, implement and follow through with monitoring and punishment if employee breaks it
  • Monitoring: Adding direct employees online is one method, but they have also suggested using engine searches as a method but loss of trust could be an issue

These are my personal opinions about what should be implemented but should be taken on a case by case basis;

  • Make an explicit rule about not being on social media on work networks during working hours; possibly allow during designated lunch breaks
  • Based on University textbook, Global Business Today, try to foster a corporate culture that is big on transparency and trust
  • Utilise Digital Natives and Digital Immigrants to their strengths and see if collaboration between the two types is possible for projects and functional areas is possible




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