Building Social Capital In A Company Commerce Essay Example

responsibilities, and identification. These two types are similar to bridging (structural) and bonding (relational) as mentioned earlier. Cognitive social capital is an additional concept that refers to the resources used to build and maintain relationships such as shared codes, language, and narratives. For their own research, Adler and Kwon define social capital as the goodwill available to individuals or groups, which originates from the structure and content of their social relations. The effects of social capital stem from the information, influence, and solidarity it provides to the actors. Therefore, a definition that includes both external bridging and internal bonding social capital is preferred. This definition also hints at the benefits for an organization in building and maintaining social capital.According to Adler and Kwon (2002), the significant advantages of social capital in an organization include information, influence, and solidarity. Having more social capital improves the quality, relevance, and timeliness of information for individuals within the organization. Social capital also grants access to power and influence, which contribute to socio-political interactions within the company. Additionally, solidarity can be achieved through the promotion and practice of norms and beliefs within the social networks of the company. Building relationships and bridging groups with weak ties can also enhance solidarity. According to Glaeser, Laibson, and Sacerdote (2002), an organization possesses both internal and external social capital. The internal social capital refers to the company itself as a social network. Meanwhile, external social capital stems from employees' associations outside of the organization, which contribute to the organization's social capital. Maintaining social capital can be a way to increase the value of the organization. Moreover, new employees can bring social capital into

the company by maintaining relationships from previous work experiences. However, acquiring social capital comes with a cost.Investing in societal capital, like investing in physical capital, involves a tradeoff. The profitability of societal capital investment for a company depends on the income or value it generates in relation to the costs. Adler and Kwon (2002) emphasize that money spent on societal capital is irreversible and unconvertible. Additionally, Nahapiet and Ghosal (1998) note that unlike other forms of capital, societal capital does not deteriorate with use but instead decreases if not actively maintained.

However, the construction of societal capital is not without risk. In their study on the findings of Morten T. Hansen, Adler and Kwon (2002) highlight the high costs associated with maintaining strong ties between project teams. The information benefits gained from these ties do not outweigh the expenses involved. Hansen suggests that weaker ties may be more effective in this regard.

Furthermore, while building societal capital can foster a strong sense of in-group solidarity, it may also lead to resistance to external influences and a reduction in creativity. This poses a risk of groupthink and increased vulnerability.

Like everything else it is a tradeoff.In order to look into if societal capital investing is profitable to the company the entire income or value coevals must be put in relation to how much it costs.Adler and Kwon ( 2002 ) have the same statement for investing into societal capital adding that like investings into physical capital, money spent is irreversible and unconvertible.Similarly Nahapiet and Ghosal ( 1998 ) add that societal capital, unlike other signifiers of capital, will non deteriorate with usage but instead lessening if it is non

being used and attempts is non made to maintain it.Constructing societal capital is non without hazard.Adler and Kwon ( 2002 ) study on the findings of Morten T. Hansen in his 1998 paper `` Combining web centrality and related cognition: Explaining effectual cognition sharing in multiunit houses '' .In this paper Hansen comes to the decision that even though strong ties existed between undertaking squads and those ties meant information benefits, they were non economically feasible.The information benefit did n't outweigh the high cost needed to keep the ties.In this respect Hansen sees weak ties as more effectual than strong 1s.Further a strong in-group solidarity, as is one of the benefits of constructing societal capital as discussed above, may besides make unsusceptibility towards positive external influences.This means a danger for reduced creativeness and higher hazard for groupthink.

Constructing societal capital

In their manual, Sander and Lowney (2006) provide guidance on constructing societal capital. They emphasize the importance of measuring societal capital while building it, as levels can vary greatly between communities and organizations. Measuring efficiency of the methods used is crucial. However, Sander and Lowney argue that unless the organization is very small, it is not feasible to measure this through specific numbers. Instead, they suggest looking at factors correlated with societal capital, such as societal trust, and conducting surveys on a smaller population to draw conclusions for the entire administration. Alternatively, they propose using a tool developed by themselves that combines these two techniques. For building societal capital, Sander and Lowney (2006) present a matrix that considers trust on one axis and group size on the other. They fill this matrix with examples of activities for

building societal capital. They argue that appropriate methods for building societal capital depend on the initial level of trust within the community and the size of the community. They also emphasize that as the amount of societal capital in a company grows, the methods for generating it must evolve. The unique characteristics of each company will also require customized solutions.However, Sander and Lowney (2006) discuss two key factors to consider when trying to build societal capital: motivations and opportunities. Motivations refer to a person's incentives for generating, strengthening, and maintaining societal capital. As Glaeser, Laibson, and Sacerdote (2002) also noted, individuals will build societal capital when they can benefit personally from doing so. Sander and Lowney (2006) outline three circumstances in which individuals are motivated to build societal capital: engaging in activities they enjoy with others, seeking social connection for personal well-being, and addressing important community issues. Additionally, providing opportunities for employees to build societal capital is crucial. This can be achieved by offering forums, venues, and activities where employees can socialize and communicate. Conversation plays a significant role in relationship building and generating societal capital, as it allows individuals to bond over shared interests and inter-relationships (Sander and Lowney, 2006). Taylor (2007) examines the potential and challenges of building societal capital in a multinational corporation and suggests ways to overcome them.The author utilizes Nahapiet and Ghoshal's dimensions of societal capital (structural, relational, and cognitive) to address how to construct societal capital. The foundation for generating societal capital is employees, specifically High-value Boundary Spanners (HVBSs), who contribute significantly in terms of creation, knowledge sharing, and coordination. These HVBSs also operate in multiple spheres within the

organization, whether they be geographic, cultural, or both. In terms of building structural and relational capital, the author suggests that establishing relationships between networks with various characteristics is more challenging than between more homogeneous networks. In this context, heterogeneous refers to individualistic or corporate societies, specific or diffuse cultures, and low or high status identity cultures. Building cognitive capital, on the other hand, is proposed to have fewer barriers but still easier within homogeneous organizations in terms of individualistic or collectivized culture.

Additionally, Social Networking Services (SNSs) are discussed as communication and collaboration tools within the organization and as communication and marketing tools externally to reach current and potential customers. Marketing professionals are increasingly focusing on online social media, leading organizations to implement online advertising in response to market trends. (Taylor, 2007)Today, advertising strategies have evolved from traditional methods, and organizations no longer have the luxury of sitting back and waiting for results. They must now be more proactive and interactive with their customers, engaging in chat sessions, providing feedback, and supporting client feedback (Webb, 2007). Social networking sites (SNSs) offer the perfect platform for organizations to listen to and address consumer expectations, suggestions, and dissatisfaction (Trusov et al., 2009).

Collaboration and cooperation are vital in organizations, but can pose challenges for large companies with multiple branches in different locations, such as IBM. SNSs can help overcome these challenges by facilitating collaboration and cooperation between employees from different branches. Employees can utilize various social networking tools to work together on the same project. Moreover, employees can acquire new skills by reading blog posts or watching video presentations on YouTube uploaded by the company. Therefore, online training has

become the most cost-effective and convenient method for organizations with multiple branches that require multiple training sessions for new technologies and products.Nowadays, most employees use smartphones and are active on social media platforms. This makes it easier and faster to disseminate information and messages among employees using social networking sites (SNSs) such as IM, Facebook Chat, Twitter, and corporate IM (Lester & Perini, 2010). Problem-solving can also be expedited through brainstorming sessions on a company's blog. It is crucial for organizations and their employees to exercise caution when dealing with social media to avoid negative consequences. The case of Amy Cheong serves as a prime example. Amy Cheong, an assistant manager at NTUC (National Trades Union Congress), made a racist remark on her Facebook wall which quickly spread across social media. NTUC promptly fired her to prevent further harm to the organization. This instance highlights the importance of accountability on social media, even for personal comments or statuses. Depending on the nature of the business, organizations should establish clear guidelines and policies to mitigate security and privacy risks. Therefore, organizations should utilize different SNSs for different purposes in order to maintain control over information and data security (Staples, 2011). IBM's Beehive is an SNS designed for internal information and knowledge sharing, while Dell's IdeaStorm is an SNS that facilitates information and knowledge sharing between the company's staff and consumers.

Proposed Theoretical Model

The utilization of SNSs and tools in constructing societal capital provides administrations with more opportunities and benefits in terms of cost, time, and effort. By utilizing SNSs and tools, administrations with multiple subdivisions in different geographical locations can easily create collective societal

capital for the entire organization, improving collaboration and cooperation among employees. SNSs help maintain connections and constant communication among societal capital members. The construction of societal capital within an organization fosters trust among employees and colleagues, which in turn encourages the sharing of knowledge and experiences. This trust promotes greater efficiency in collaboration, cooperation, and coordination among employees. SNSs allow users to assess the behavior and intentions of other users, which is essential in establishing trust. Through analyzing the profiles of other users/members, individuals can determine whether or not someone should be trusted. It is detrimental to an organization's societal capital if users are unable to view or become acquainted with each other's profiles. Additionally, in such situations, the level of uncertainty among users increases, potentially leading to the failure of establishing societal capital (Valenzuela, Park, Kee, 2009).Social networking sites (SNS) offer users an easy way to develop and maintain societal capital. They allow users to build their societal web without the need for face-to-face interactions or teambuilding sessions (Valenzuela, Park, Kee, 2009). Through technological advancements, users can connect on a larger scale, forming weak ties that provide diverse sources of information and perspectives. At the same time, SNS also facilitate the maintenance of strong ties, such as friendships and family relationships (Steinfield et al., 2009). Weak ties networks serve as bridges for accessing job opportunities and other information, while strong ties networks provide emotional and financial support. From an organizational perspective, societal capital plays a significant role in knowledge exchange among employees. SNS make it easier for individuals to access information, share knowledge, and form social connections (Huy and Shipilove, 2012). However, merely having

a strong SNS presence and utilizing crowd tools is not enough for successful development of societal capital within an organization.According to their research findings, there are several factors that need to be considered in order to become a successful social capital, such as having a community leader who can provide emotional support and boost morale among the members. A study was conducted on two companies that used the same social networking site and it was found that one company failed due to not considering the value added factors. According to Huy and Shipilove (2012), planning is crucial when creating social capital through the use of social networking tools in an organization. They suggest that the first step is for the organization to identify a reputable and trusted community leader. Without a leader in the social networking site, it will not be fully utilized and the desired outcomes will not be achieved due to lack of support, courage, morale and motivation. Secondly, employees should be familiarized with social networking tools before they are officially implemented. This can be done by allowing them to gain general knowledge and experience through free social networking sites such as Facebook and Twitter. Encouragement and motivation are crucial at this stage. Thirdly, employees should be encouraged to build social capital on social networking sites that provide knowledge, fun, and entertainment for them. After that, the organization can begin deploying corporate social networking tools gradually and systematically.The primary focus is on implementing simple and easy tools, such as wikis and podcasts, followed by more complex ones. Ultimately, once employees are comfortable with using these tools, administration can add value by fostering a

culture of information exchange within the organization.

Execution of external and internal Social Networking Sites

This section discusses the use of Social Networking Sites (SNS) to build social capital, using two examples. The first example is IBM's internal SNS called IBM Beehive, while the second example is Dell's external SNS called IdeaStorm. The subsequent section compares the procedures used in these examples with a theoretical model.

Tin at IBM

In the 90s, IBM launched an initiative to provide their employees with an easier way to connect with colleagues. The initial implementation was a Yellow Pages application called Blue Pages (BP), reminiscent of IBM's nickname "Big Blue." Over time, BP evolved from a static phone book into an internal SNS, influenced by various public Web 2.0 SNS initiatives that emerged during its development period.According to Riemer and Richter (2009), the site was well-received and had a large user base. They attribute this partly to how the site evolved within the company, by complementing an already widely used map (phone book) with the functionality that the workers wanted. They refer to this as the co-evolution of the system, both in its development and usage. The primary purposes of the system were to seek experts, connect co-workers in a personal context, and facilitate existing relationships by keeping communication channels open.

In 2007, IBM launched a fully-fledged social networking site called IBM Beehive, following the success of BP (Steinfield et al., 2009). Similar to popular public options like Facebook and Twitter, Beehive allows users to create a customized profile page and connect with others. Users can post both personal and professional content, and communicate with others through various direct or indirect methods. Two years

after its launch in 2009, approximately 15,000 users had registered for an account on Beehive, which accounted for about 15% of the company.

The design of Beehive was modeled after sites like Facebook and MySpace (Steinfield et al., 2009). The goal was to enable employees to communicate actively through direct contact and passively through their profile pages. The profile page served as a way for users to express themselves.(2009) observed that Beehive is used by users for a variety of purposes. These include showcasing their profile, sharing position updates and work-related information (linked to BP), making connections with others, sharing content, creating lists on various subjects, and sharing personal information. Users can also communicate with each other through instant messaging services, commenting on each other's posts, or posting messages on each other's profile pages. Similar to other popular public SNSs, privacy settings can be adjusted to control who can see certain parts of a user's profile page. The site also provides notifications for recent activity among a user's connections and when someone interacts or posts content related to the user. Overall, Beehive is used for both personal and professional purposes, allowing users to communicate their interests and advance their professional endeavors. It also facilitates connections between individuals who may have previously been unknown to each other or limited by geographical distance. Additionally, Beehive serves as a platform for networking and connecting with others who share similar interests.In terms of societal capital, it is valuable to reach a practical decision about the use of Beehive. At IBM, employees who use Beehive more frequently form stronger connections within their network compared to those who use it less or

not at all. Additionally, the weak ties of power-users become more accessible and active. Furthermore, Beehive has a more significant positive impact on societal capital for individuals who lack a strong network, including young and new employees as well as those who are geographically separated from the company's main office. The research team also suggests that a request sent through Beehive is more likely to be taken into consideration than sending the same message through email, as the personal context and common connections present in Beehive are often absent in email communication. DiMicco et al. (2008) identified three different reasons for sharing content on Beehive: caring, climbing, and operating. Caring refers to employees enjoying socializing with their coworkers on a personal level. Climbing is the motive to share in order to advance one's career by promoting oneself on the profile page or establishing strategic connections. However, some employees also express concerns that using the SNS could potentially harm their career.The final reason, candidacy, refers to the use of the SNS to promote the user's internal projects. Beehive can be used to help employees drive traffic to their project page and gain support from peers and managers. IBM is briefly introduced as the company behind Beehive, which qualifies as an internal SNS because information can be posted on the web without censorship due to its internal nature. Beehive also aimed to solve the issue of keeping information up to date. Moving on to Dell, it is a multinational computer and IT product manufacturing organization founded by Michael Dell in 1984. Dell has millions of customers worldwide and has learned a lot about social media's role in

business. In the past, Dell faced issues with social media, but they have learned from those experiences and now use it successfully as a business tool. In June 2005, writer and journalist Jeff Jarvis had a negative customer service experience with Dell, which went unresolved for months.In August 2005, Jarvis wrote an open letter to Dell's CEO, Michael Dell, suggesting the importance of addressing negative feedback from social media and the press. He emphasized the significance of regular and direct communication with customers. As a result, Dell began exploring social media platforms. Their first corporate social networking blog, Direst2Dell, was launched in 2006 to strengthen the bond between the company and its customers by sharing knowledge, ideas, and the company's vision. In 2007, Dell entered the online social capital world by creating IdeaStorm, a platform where people could contribute their ideas for improving Dell's products and services and foster a social capital by sharing knowledge and ideas. In June 2007, Dell introduced a Twitter account, @DellOutlet, as an alternative shopping destination for Dell Outlet products and services. By mid-2009, sales reached three million from Twitter alone, and by the end of the year, six million sales were counted from all Dell stores. From 2008 to 2010, Dell launched various channels on social networking sites, including a PartnerDIRECT page on LinkedIn and @DellChannel on Twitter to provide information about Dell PartnerDirect's programs.Furthermore, Dell has created @DellCares and @DellCaresPro as social media outreach squads on Twitter to provide proactive customer support and minimize the spread of negative feedback on social platforms. In December 2010, Dell launched its Social Media Listening Command Centre to monitor all Dell-related posts

across various social networking sites.

Social Media to Social Capital

As mentioned earlier, Dell has established social capitals on different social media platforms. These networks allow Dell to collaborate with its sellers and customers, facilitating the easy sharing of knowledge and experiences within the organization. Furthermore, Dell can effectively communicate its insights, mission, and ongoing activities to a global audience. This strong network with consumers is crucial in the modern business era.

IdeaStorm

IdeaStorm is a key social media platform for Dell in building social capital with customers. While Dell utilizes various social media channels, IdeaStorm specifically focuses on collaboration with customers. Other platforms are more geared towards internal collaboration, social media response, and customer support. IdeaStorm serves as a place where customers can voice their ideas and suggestions, fostering collaboration between them and Dell.And in addition, they can collaborate to improve their thoughts and work together to generate ideas and suggestions. By understanding the perspective of the customer, Dell can enhance the implementation of new products and services. Anyone interested in sharing their experiences, providing suggestions and ideas, or expressing their opinions on Dell's products and services can join IdeaStorm. IdeaStorm, like other social networking sites, requires mandatory registration to become a member. After completing the registration process, users can start sharing their thoughts by posting articles on the website. These posts will be labeled as "Acknowledged" after being reviewed by the IdeaStorm team and meeting the terms of use. If the post is reviewed by multiple business teams and the idea is implemented for business purposes, it will be marked as "Under Review and Implemented." If the idea is already available

in the market, it will be labeled as "Already Offered," and if it does not align with Dell's business plan, it will be labeled as "Not Planned." If a post does not receive any of these statuses within six months, it will be removed from the site. However, IdeaStorm members can still access archived posts for future evaluation.During the process of submitting, implementing, or archiving a station, there is a lot of collaboration between members and employees, as evidenced by the influx of thoughts. Employees usually join the conversations by making remarks. IdeaStorm is supervised by directors and executives who also guide and encourage their employees to participate in relevant discussion sessions. Collaboration with other members, such as voting and providing remarks, can help improve the ideas proposed by members. In 2009, Dell introduced "Storm Sessions" on IdeaStorm, where they create topics and ask customers for their ideas and suggestions. Storm Sessions are only open for a limited time to ensure that all ideas are more relevant and targeted. In 2012, Dell added the "Extensions" feature to IdeaStorm. This allows an idea post to incorporate comments from their post as part of the consideration for further development. Additionally, Dell ranks all posts based on the number of suggestions they receive for a particular idea. To date, Dell has implemented approximately 600 ideas out of the 1,800 submitted ideas. According to Bourdieu and Wacquant (1992), and Coleman (1990), social capital is the result of social structure and collaboration at both individual and collective levels, leading to positive outcomes.IdeaStorm is a platform where Dell collaborates with its clients and members to achieve positive results for its products

and services. This collaboration helps in creating social capital between Dell and its clients, which in turn promotes the image of Dell and builds customer trust worldwide.

Discussion:
How do the model and the case studies align? What other lessons can we learn from the cases? According to Riemer and Richter (2009), BP's success can be attributed to its corporate history.

Decision:
Key findings.