Social capital and innovation: exploring intra-organizational differences

Abstract

The literature recognises the importance of social capital as a key asset in developing innovation capabilities. However, most research treats social capital as homogenous in terms of level and quality, irrespective of who has the capital inside the organisation. This may not be an appropriate representation of the situation, because many social groups coexist inside a single organisation. This research explores inter-group differences regarding social capital and how and why they may explain intraorganisational differences in innovation capabilities and innovation readiness. To this end we conduct an in-depth case study within a small industrial company, where we find three groups of employees who are distinct in (1) the network configuration of the structural dimension of social capital, (2) the presence of shared narratives and goals, and (3) the level of trust and identification towards the organisation. For each group we are able to track the reasons for these differences in terms of the drivers of social capital (stability, closure, interaction and interdependence). Finally, the level of innovation readiness and innovation capability at the group level is analysed and explained in terms of differences in levels and drivers of social capital. We find that higher levels of social capital are associated with increased innovative capability, and we contribute to understanding the nature of this connection, which can be used for capability development