SOCIAL CAPITAL

This type of capital generates a positive product as a result of human interaction.

Researchers see two primary forms of social capital:

  • Bonding refers to social capital created within a group with shared interests and goals. A neighborhood association is an example.

  • Bridging is the creation of social capital across groups. If the bridging is successful, individuals in the two groups discover shared interests and goals and work together to achieve them. A neighborhood association that links up with a local police department is an example.

 
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IN BUSINESS TERMS

Social capital is the contribution to an organization's success that can be attributed to personal relationships and networks, both within the organization and outside of it.

BROADLY SPEAKING

Social capital is a set of shared values that allows any group of people to work together effectively to achieve a common purpose. As such, the study of how social capital works or fails to work pervades the social sciences.

IN PRACTICAL TERMS

It is estimated that up to 85% of jobs are filled through informal networking rather than through job listings. That is social capital in action.

 

EXAMPLES OF SOCIAL AND
RELATIONSHIP CAPITAL

The Internet has revolutionized the concept of social capital, effectively creating an infinite number of social connections suitable to any occasion.

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QUALITY CONTROL

Users of web services from Airbnb and Uber to eBay use social capital in order to make a selection based on the reviews of past users. The same people contribute to social capital by leaving their own reviews later. The companies that own those sites use reviews as an essential component of their quality control programs.

SHARE EXPERIENCE

Social networking sites such as Facebook strengthen bonds based on personal interests, such as hobbies, or past experiences, such as a shared hometown or a past employer.

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MAKE A SELECTION

Users of web services from Airbnb and Uber to eBay use social capital in order to make a selection based on the reviews of past users. The same people contribute to social capital by leaving their own reviews later. The companies that own those sites use reviews as an essential component of their quality control programs.

SOCIAL NETWORKS

Social networks also have become a primary source of social capital for small business people, who can showcase their products and services online as effectively, if more cheaply, than big corporations.

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