Corporate Social Capital and the Intelligent Enterprise

Corporate Social Capital and the Intelligent Enterprise

Laurence Lock Lee (University of Sydney, Australia)
DOI: 10.4018/978-1-60566-084-4.ch005
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This chapter is concerned with building up the concept of Corporate Social Capital (SC) as a critical firm resource in terms the governance of multisourcing relationships. The establishment of Corporate SC as a performance related concept draws from the related concepts of Social Networks (SN), Intellectual capital (IC) and Corporate Reputation (CR). The relevance of the relationship aspects of SN has been established in chapter III (Figure 12). Also addressed in that review was the knowledge based theory of the firm, that will be developed in more detail through an exploration of the IC literature and the CR literature, each seen as contributing to a foundation for Corporate SC and ultimately impacting IT Governance and multisourcing relationships.
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Corporate Social Capital Formulation

With Corporate SC being a relatively new concept for research and application the opportunity exists to take some license in developing a formulation for it. By definition there is significant overlap between the concepts of Corporate SC, IC and CR when it comes to discussing intangibles. Each could be defined to comprehensively cover all of an organisation’s intangible resources. The difference is largely in the historical perspective from which the given area approaches the topic of intangibles. For example, Corporate Social Capital has its genesis in the field of sociology and tends to view intangibles through the lens of personal relationships (Adler & Kwon, 2002; Leenders & Gabbay, 1999). Corporate Reputation has largely been developed through the marketing literature and a focus on brand and image (Fombrun & Shanley, 1990), though with an argument that it represents much more than this (Jackson, 2004). Intellectual capital is seen by many to be represented by an organisation’s intellectual property in the form of its patents and licenses (Petrash, 1996). However, like the other concepts there are many arguments for broadening the definition to encompass the full scope of intangibles (Brooking, 1996; Edvinsson & Malone, 1997; Roos, 2003).

Given that the topic of interest is governing relationships, Corporate SC is put forward as the most appropriate lens for the evaluation of multisourcing relationships. Therefore, for this analysis the concept of Corporate SC will be built up through the incorporation of concepts like Intellectual capital and Corporate Reputation via a critical review of the literature.

The study of Social Capital (SC) as it relates to business and markets is still a relatively recent phenomenon with the majority of the research being of a normative, rather than an empirical nature (Florin et al., 2003; Leenders & Gabbay, 1999). The linkage between SC and Intellectual capital (IC) performance has been largely neglected but this could simply be attributed to the disparate disciplines from which these concepts have emerged, that is, sociology and accounting. The organisational theorists’ approach to intangibles could identify SC as a component of External capital (EC), though in many cases EC is typically defined more narrowly as relationships with customers and suppliers (Sveiby, 1997).

However, SC can have a broader interpretation which can be relevant at the individual, firm or market level. As such, it can be argued that Corporate SC plays a role across all of the identified components of IC, as illustrated in Figure 3:

Figure 3.

Corporate social capital and intellectual capital

The above formulation of Corporate SC incorporates the accepted formulation of IC made up of Human capital (HC), Internal capital (INC) and External capital (EC) (Guthrie & Petty, 2000). It also acknowledges the overlap between formulations of corporate reputation and an expanded formulation of EC to incorporate the structural aspects of relationships. The model shown in Figure 3 identifies an overlap between the structural aspect of SC and the EC component of the IC formulation. It identifies corporate reputation as equivalent to the IC concept, with the addition of financial soundness.

Figure 2.

The different perspective on intangible resources

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