October 3, 2023
You are here:  Home  >  Regions  >  East Ventura County  >  Current Article

Managers need to develop social capital


Kapp Johnson

By Kapp Johnson

You might be well aware of John Donne’s poem “No Man is an Island.” Written in 1674, it was not originally a poem but prose. It speaks profoundly of what we might call social capital today. The poem speaks beyond networking to a depth of relationships that are more than instrumental.

In organizational context, social capital is resources, resources that not only help the firm achieve its mission and goals but also contribute to its reason to be. In other words, it is the firm’s why.

In this capacity, social capital takes on a very important role. It contributes to the acquisition of information, ideas, leads, opportunities, financial resources, power, influence, emotional support, goodwill, trust and cooperation. Social capital is not personal because it is not possessed by an individual. It is relational.

Social capital is relations that are productive. They help the firm create value, get things done, achieve strategy, fulfill purpose and make invaluable contributions to the world. We can’t live without it, personally or organizationally. Thus, the ideal of doing it alone is fundamentally flawed. Social capital is essential to achieving success from the individual to the firm.

Shared norms, values and understanding bind the firm with groups and individuals to facilitate cooperation. If we think of the firm’s value chain, the quality of that chain is directly related to the quality of the relationships within it. Management should be focused on the development and enhancement of those relationships.

An investment banker I have had many conversations with over the years does this well. He sits at the top of his organization and oversees young, smart and ambitious men and women who work very hard, put in long hours and get paid very well. He, too, is paid very well. His job is not just oversight. He must also nurture the social capital of the firm. He is a bright, experienced executive but his years of experience on Wall Street gave him something possibly even more important — insight and wisdom. He is the calm in the midst of the storm. The captain who holds the ship steady. Those value relationships are brought into line because of his attentiveness.

When we look at how we manage those relationships, ethics comes into play. There is no avoiding it. If relationships are vitally important as a form of capital, the quality of those relationships moves front and center. We must consider whether we are using our relationships as an end or as a means.

It’s very easy to use a relationship as a means to some other end, whether individually or for the firm. But the relationship is an end in itself.

Psychiatrist Viktor Frankl wrote, “It is the pursuit of happiness that thwarts happiness.” It is not the pursuit of social capital that is of use to us, but the relationships that contribute to mutual flourishing.

• Kapp Johnson is a senior lecturer in the California Lutheran University School of Management.