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Social Capital

Social Capital: Why Networks are Valuable to an Individual: Social capital refers to many aspects in the social network and remains rather ambiguous as different theorists define social capital in different ways. A more individualistic approach, which focuses on an individual’s personal career development and status attainment, provides a concept of social capital that is more comprehensive of other theorists’ perspectives. Nan Lin, explains social capital as, “Instrumental utility of accessed and mobilized resources embedded in social networks”. Social capital refers to the stock of resources provided by the relationships, or ties, that an individual holds through his or her network. Social capital allows individuals to draw on resources from other members of their network, providing them value and opportunity through connections rather than personal attributes alone. This concept of capital supports the well-known saying, “It’s who you know, not what you know.”

Social Capital is a central concept in many career success theories such as weak tie theory, structural hole theory, and social resource theory. Today, it has become even more critical to career development as the proliferation of technology has increased individuals’ social relation capacity and enhanced individuals’ ability to mobilize these social resources.

Social Capital as an Asset: Social capital provides leverage for the advancement of individual status attainment and career opportunities. Just like education (human capital) and innate skills (individual capital), social capital can give an individual an advantage in career development and status attainment. From this perspective, social relations can be viewed as an investment with expected beneficial returns. Just like financial investments are assets that have expected returns of profit, social investments are assets that provide opportunities for personal advancement. Unlike other types of capital, social capital is owned jointly. A relationship must be maintained in order for the social capital to continue to exist. Investment in social capital consists of active social efforts to a) build and maintain existing personal relationships and b) develop new relationships.

Resources Provided by Social Capital: The central concept of social capital is that networks provide individuals connections with people (contacts) in influential positions who can provide valuable career resources either directly or indirectly (through another contact). Social capital provides access to key resources: information, influence, and opportunity. Most prominently, social capital provides access to job opportunities, which is the information regarding job availabilities or needs that, would otherwise be unknown to the perpetrator. Information is the details and advice exchanged regarding job opportunities and general career advancement. One might receive information about the conditions of a job, helping that individual to make a more informed decision in choosing his job or career, resulting in a better fit and greater satisfaction. Influence can be exerted by higher connections to assist the perpetrator in attaining a desired job and upward mobility.

Evaluating Social Capital: In “Social Capital and Finding a Job: Do Contacts Really Matter?“ Ted Mouw defines the difference in the size, or quality, of the social network of an individual and the utility the network provides the individual. The utility provided by an individual’s social capital is influenced by many factors such as position, number, variety, strength, and formality of connections. The effective exertion of social capital resources can be seen as either endogenous or exogenous to social capital. Nan Lin defines it as access to social capital and mobilization of social capital. This is a fundamental ongoing debate about social capital that is critical to determining the effects of social capital on career development, status attainment, and social mobility for individuals of different race, ethnicity, gender, and background.

Structural Holes

In the context of networks, social capital exists where people have an advantage because of their location in a network. Contacts in a network provide information, opportunities and perspectives that can be beneficial to the central player in the network. Most social structures tend to be characterized by dense clusters of strong connections . Information within these clusters tends to be rather homogeneous and redundant. Non-redundant information is most often obtained through contacts in different clusters. When two separate clusters possess non-redundant information, there is said to be a structural hole between them. Thus, a network that bridges structural holes will provide network benefits that are in some degree additive, rather than overlapping. An ideal network structure has a vine and cluster structure, providing access to many different clusters and structural holes.

Information Benefits Networks rich in structural holes are a form of social capital in that they offer information benefits. The main player in a network that bridges structural holes is able to access information from diverse sources and clusters. This is beneficial to an individual’s career because he is more likely to hear of job openings and opportunities if his network spans a wide range of contacts in different industries/sectors. This concept is similar to Mark Granovetter’s theory of weak ties, which rests on the basis that having a broad range of contacts is most effective for job attainment.

Social Capital Mobility Benefits In many organizations, members tend to focus their activities inside their own groups, which stifles creativity and restricts opportunities. A player whose network bridges structural holes has an advantage in detecting and developing rewarding opportunities. Such a player can mobilize social capital by acting as a “broker” of information between two clusters that otherwise would not have been in contact, thus providing access to new ideas, opinions and opportunities. British philosopher and political economist John Stuart Mill, writes, “it is hardly possible to overrate the value...of placing human beings in contact with persons dissimilar to themselves…Such communication [is] one of the primary sources of progress.” Thus, a player with a network rich in structural holes can add value to an organization through new ideas and opportunities. This in turn, helps an individual’s career development and advancement.

A social capital broker also reaps control benefits of being the facilitator of information flow between contacts. In the case of consulting firm Eden McCallum, the founders were able to advance their careers by bridging their connections with former big 3 consulting firm consultants and mid-size industry firms. By bridging structural holes and mobilizing social capital, players can advance their careers by executing new opportunities between contacts.

There has been research that both substantiates and refutes the benefits of information brokerage. A study of high tech Chinese firms by Zhixing Xiao found that the control benefits of structural holes are “dissonant to the dominant firm-wide spirit of cooperation and the information benefits cannot materialize due to the communal sharing values” of such organizations. However, this study only analyzed Chinese firms, which tend to have strong communal sharing values. Information and control benefits of structural holes are still valuable in firms that are not quite as inclusive and cooperative on the firm-wide level. In 2004, Ronald Burt studied 673 managers who ran the supply chain for one of America’s largest electronics companies. He found that managers who often discussed issues with other groups were better paid, received more positive job evaluations and were more likely to be promoted. Thus, bridging structural holes can be beneficial to an organization, and in turn, to an individual’s career.

Weak Ties

Introduction

In organizational sociology, ‘weak ties’ refers to a special relationship between members of networks. A ‘tie’ is defined as an interpersonal relationship that is measured by “a combination of time, emotional intensity, the intimacy, and the reciprocal services which characterize that tie.” Typically, people live in tight clusters that share access to common information (people with ‘strong ties’). People who live outside of these clusters, people with whom one has only a marginal connection with, have access to entirely different information. This section will explain the value of these ‘weak ties’ in greater detail and outline how it is they are leveraged in career attainment.

Studies on Weak Ties

Several studies of demonstrated the value of weak ties within one’s network. In 1974 Mark Granovetter conducted a study of 282 workers in a Newton, Massachusetts. Through his interviews he determined that men who had used interpersonal connections to get their job tended to be happier and have better jobs. Nan Lin asserts that Granovetter’s conclusions “challenge the taken for granted and attributed value given to strong ties… Granovetter alerted us that weak ties, promoting access to different and new information, are socially valuable as well.” An additional study, conducted by Nan Lin in 1978 expanded on the value of these weak ties. In this study, participants were asked to forward a packet of information along to people that they knew on a first name basis with the eventual goal of reaching a target individual. Lin concluded that successful chains inevitably moved upwards to higher status individuals before moving down to the target. The strength of weak ties would thus also lie in its ability to give vertical access to people higher in the social hierarchy. These people, it is argued, have a better view of the social hierarchy in general due to the pyramidal nature of most social structures.

Weak Ties and Job Attainment

Weak Ties and Job Attainment

Weak ties and social networks have special relevance to job hunting and job attainment. To understand this we will consider the job hunt of Person A. Person A has a strong tie with his roommate in college, Person B. Current theory suggests that people with whom someone has a strong tie will most likely have access to the same information that the first person does. That is to say, any job opportunities that Person B might know of will most likely be known to Person A as well. Let us assume that Person C is a professor at Yale University and is acquainted with Person A’s college professor at Harvard University. Person C would be much more likely to provide information that leads to Person A getting a job. This is because she is a weak tie and thus has access to information not available to Person A. Additionally, Person A would be reaching vertically upwards in the social hierarchy (assuming that professors hold higher statuses than students). Person C has a better view of social networks from her position at the top and would be better fit to make a connection that leads Person A to getting a job.

Information Technology and Social Networking Systems

File:Linkedin Logo.png

Linkedin Logo

As we move from the industrial age to the information age, community can be redefined as a gathering of people in cyberspace , and social networking sites (SNS) like Linkedin can facilitate networking in these communities by creating groups according to shared geography, identity, or interest. Not only do these sites help people make personal connections at a distance, thus increasing the global talent pools, but they are also flattening organizations by distributing access to information so that everyone is equal on the social network and no hierarchies are needed to get involved in the recruitment process. As a result, there is a spillover of knowledge about labor talent between firms, and in an era when employees are switching companies more frequently, a site like Linkedin provides a useful platform of mechanisms for members to connect with people who have similar career or personal interests, thus aligning their career goals and building social capital, or an “investment in social relations by individuals through which they gain access to embedded resources to enhance expected returns”.

For example, Linkedin allows people to create unique profiles that are very similar to their resumes, which makes the site “feel” more personal by allowing people to display their picture, education, current and former employers, affiliations, activities, interests, skills, and employee recommendations. Linkedin also allows members to publicize their websites, blogs, or any other pieces of work that reflect their skill set, which improves their search engine results and opens the door for more connections. In addition to the direct contacts, Linkedin also displays contacts that an individual is separated from by two or three degrees, which allows the individual to easily identify nonredundant contacts and use the structural holes as entrepreneurial opportunities for information access, referrals, and control. Therefore, members can affect their career trajectory by “bridging social capital” and using strong ties, or direct contacts, to make weak, but useful, ties with 2nd or 3rd degree contacts.

In addition to bridging social capital like Linkedin, SNSs that are specialized for a specific organization can bond social capital and connect people with similar interests or goals, which implies that there is trust and a sense of obligation that encourages reciprocity. Therefore, they contribute to organizational socialization for new employees and those outside the U.S. by allowing the “network disadvantaged”, who otherwise would need to put in considerable “face time”, to overcome their geographical barriers, build up their network of contacts, and create social capital benefits in work settings for multinational firms. By strengthening informal relationships among coworkers, these types of SNSs provide access to information and opportunities that might not be available within an individual’s close-knit relationships, which helps employees advance their careers by matching their skills with the needs of people higher up in the organizational hierarchy. Therefore, SNSs can help reveal existing contacts’ interests and areas of expertise more fully, helping to reduce the perceived costs of asking for help because of the improved relationships they may foster, or by helping to broker access to expertise through others’ contact lists.

Overall, SNS users are able to maintain larger networks of heterogeneous contacts, and the affordances of the sites support social interaction between users. This helps individuals maintain existing relationships and deepen developing ones, so that their economic activities are embedded in their network of social relations.

Social Networks and Status Attainment

Does Social Capital Work? The term social capital refers to the resources available to an individual through the use of his/her social networks . The concept of the social capital model for socioeconomic status attainment, as described by Lin, includes two different but related components: access to social capital and mobilization of social capital. These models attempt to explain how individuals can use social capital to increase occupational prestige and socioeconomic welfare.

Accessible social capital: The access to social capital model focuses on the network resources available to an individual, and asks whether or not these resources have had an effect on the individual’s socioeconomic status. These social network resources include such factors as education level, prior jobs, as well as the number and status of social ties. Sociologists often use one of two methods to gauge a participant’s ability to access social capital: name generators and position generators. Name generator studies ask the participants to supply their contacts, and then identify those contacts’ levels of social capital, factoring the education, occupation, gender, race, and age of each contact into a social capital measurement. Position generator studies provide a list of jobs and ask the participants to indicate any contacts they might have within their chosen industries. Both of these methods represent attempts to quantify the types of relationships that people develop over their entire lives. Therefore, accessed social capital remains extremely fluid as people’s friends and contacts shift their alliances, change positions or retire. Lin also notes in his pivotal 1999 paper, “Social Networks and Status Attainment” that studies predominantly show that increased access to social capital is positively correlated with bonuses, early promotion, status of first job, and negatively correlated with time required to find a new job after being laid off.

Mobilization of Social Capital: Actually using or mobilizing social capital is most evident during the job search itself. Commonly known as “networking,” mobilization of social capital refers to the act of using the resources to which one has access to for career advancement. Studies looking to measure the effectiveness of mobilization ask: who did the individual contact; how well did he/she know this person; the status and education of the contact; what level of success (i.e. what attained status) resulted from the mobilized approach? The large number of studies done using the mobilized social capital model reveals consistent results-- the status of the contact significantly affects the individual’s obtained job status. This theory seems to hold true across all cultures studied except Spain, where only the lowest income jobs came through social contacts. In Spain the increased levels of bureaucratization made contacts less helpful for high level jobs .

Joint effects of accessible and mobilized social capital: Realistically, neither mobilization nor accessible capital theories can operate totally independently of one another. Lai’s 1998 study looks at the relationship between the two models and offers a relatively simple conclusion: generally speaking, the better an individual’s network, the more accomplished people are whom he/she contacts and the more successful he /she is at attaining a higher occupational status. Thus accessible capital causally influences contact resources, which then directly influence status attainment. One’s accessible pool of social capital holds only indirect influence over status when paired with mobilization. This is logical--the individual must be more active, that is, he or she must “use” his or her social capital in order to benefit from his or her identified network resources in order to attain a higher status.