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Social capital theory and implications for human resource development.

Abstract

More organisations are becoming aware of the importance of social interactions and relationships at work. Consequently, organisations are faced with a challenge to understand this phenomenon and its implications on the workplace. This paper reviews the theory of social capital as presented by N Lin in Social Capital: A Theory of Social Structure and Action, critiquing its stage of theoretical development using Susan Lynham's applied theory building research methodology. Additionally, the literature on social capital indicates that as a strategic business partner, there is an immediate need for the scholars and professionals in the field of human resource development to address this emerging challenge. Therefore, a review and critique of social capital theory is necessary to determine the viability and applicability of this theory.

Keys Words: Social Capital, Theory Building Research, Human Resource Development, Social Economics Performance

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Social Capital Theory

Organisations are struggling to address the demands of a changing economy and marketplace while searching for new ways to enhance employee performance and improve financial profitability. The theory of social capital as described by sociologist Lin (2001), refers to investment in social relations with expected returns in the marketplace. The theory of social capital has emerged as a relevant concept of utility to many researchers across disciplines such as sociology, psychology, economics, political science, management, community development, agriculture, and anthropology (Baker, 2000; Portes, 1998; Woolcock, 1997; Putnam, 1995; Putnam et al, 1993; Bourdieu, 1986; Schmid, 2003; Amrit et al, 2002).

As the literature indicates, there are many definitions and approaches to the theory of social capital. There is a growing consensus that social capital stands for the ability of actors to secure benefits by virtue of membership in social networks or other social structures (Portes, 1998). Baker (2000), on the other hand, describes social capital as the resources available in and through personal and business networks. Coleman defined social capital as any aspect of social structure that creates value and facilitates the actions of the individuals within that social structure (1990). Very strong complementarities are the technical way to incorporate into a utility-maximising framework in which social forces have tyrannical power over individual behaviour; individuals are "forced" to conform to social norms; culture is dominant, and other powerful effects of social structure on behaviour are commonly emphasised by sociologists and anthropologists (Becker and Murphy, 2000).

This paper attempts to provide an in-depth review of the theory of social capital as a multi-dimensional phenomenon; determine the developmental stages of the theory in general; study Lin's (2001) social capital theory through Lynham's (2000) applied theory building research methodology; and using the review and the critique of Lin's theory to present the implications and the utility of the theory for the field of human resource development (HRD).

The paper purposefully examines Lin's theory of social capital because it stands out as the most well-defined and fully-described model in understanding the nature and dynamics of social capital phenomenon. Although there are other scholars studying this phenomenon; they do not provide a model to thoroughly examine and outline the internal structure and external relationships of the theory in question. Therefore, Lin's theory of social capital is worthy of consideration as the focal point of this study. Furthermore, without a model like this, it would not be possible to attempt to review and critique a theory which would lead to either confirmation or disconfirmation of the phenomenon.

As a transdisciplinary field, HRD constantly strives for quality research in order to effectively respond to a rapidly changing business environment and maintain its status as a strategic partner within the organisation. Lin proposed his theory of social capital from a sociological perspective; therefore, as a social field, HRD can study the utility and implications of the social capital theory in the workplace, which potentially may benefit employees, work teams, and the organisation as a whole. This is especially important as the theory of social capital has significant implications both to the collective and individual good in terms of information, influence, social credentials, and reinforcement. The recognition that social capital is an important input in an organisation's production function and performance has major implications for organisational change and utilisation of organisational resources.

Historical Development of the Social Capital Theory

The term social capital was first discussed by sociologists in 1916 (Lin, 2001). It was not until the 1980s that the term social capital was used by scholars. Later on, Bourdieu (1986) offered the first systematic contemporary analysis of social capital defining the concept as the aggregate of the actual or potential resources, which are linked to possession of a durable network of more or less institutionalised relationships of mutual acquaintance or recognition. The concept of social capital has recently been studied in depth by various scholars (Lin, 2001; Coleman, 1988; Bourdieu, 1986). Each scholar, however, approached the phenomenon from his own respected discipline. As a result, in the literature, there have been various definitions and implications of the theory reflecting this variance.

From the business stand point, social capital refers to many resources--information, ideas, business opportunities, financial capital, power, emotional support, goodwill, trust, and cooperation--available to us in and through personal and business networks (Baker, 2000). Cohen and Prusak (2001), on the other hand, state that social capital consists of the stock of active connections among people: the trust, mutual understanding, and shared values and behaviours that bind the members of human networks and communities and make cooperative action possible.

The common idea that social capital increases organisational performance, enables employees to get better jobs, better pay, and faster promotions through the social capital that they build is the driving force attracting the business to further investigate and explore the opportunities and possibilities that social capital may present. Social capital directly enters preferences and is a complement in preferences with various goods (Becker and Murphy, 2000). The World Bank (2002), from a financial and developmental perspective, defines social capital as the institutions, relationships, and norms that shape the quality and quantity of a society's social interactions to enable people to coordinate action to achieve desired goals. Putnam (1995), as a political scientist defines social capital as features of social organisations such as networks, norms, and social trust that facilitate coordination and cooperation for mutual benefit.

Despite the fact that social capital phenomenon has only recently been discussed in the general literature, in practice, networks for the production of goods and services have always been an essential function of all organisations, whether small or large. But what makes an organisation distinctive is the predominance, in the marketplace, of social capital in the form of productive organisations operating according to the organisational mission and goals. Coleman (1988) refers to social capital as a variety of entities with two elements in common: they all consist of some aspect of social structures, and they facilitate certain action of actors--whether persons or corporate actors--within the structure.

Social capital can be generated either as a by-product of existing social relations, or as a direct product of new structures of social interaction created by agents to meet specific objectives (1990). The current body of knowledge represents three levels of social capital: macro, meso, and micro. As such, when social structures are broadly viewed in terms of what they are comprised of, it may be concluded that social capital theory is a relevant term to HRD at the micro, meso, and macro levels (Portes, 1998; Grootaert, 1997; Woolcock, 1997; Serageldin, 1996). The following model represents the interactions and relationships among these layers.

Social Capital at Macro Level

Macro level is the stage where social capital is utilised at the widest range. At macro level, social capital includes institutions such as government, the rule of law, civil, and political liberties (Grootaert, 1999). Knack's study suggests that there is overwhelming evidence that such macro level social capital has a measurable impact on national economic performance (1999). Macro level social capital is critical in determining how a government functions (Putnam et al, 1993) and what types of private sector is developed in an economy (Fukuyama, 1995). In terms of public sector, constructive government involvement in economic development is contingent upon a delicate balance between external social ties and internal cohesiveness. At macro level, social capital deals with government effectiveness, accountability, and the ability to fairly enforce rules; economic growth in terms of enabling or disabling the development of domestic firms and markets; and encouraging or discouraging foreign investment (Rodrik, 1997; Putnam et al, 1993). As far as the private sector is concerned, Fukuyama's study (1995) found that more expansive social networks of the United States and Germany generate a greater number of large corporations than do societies like China, in which family networks form the foundation of private enterprise. There is significant evidence that social capital at macro level has a measurable impact on national economic performance (Knack, 1999). In organisations, social capital at macro level deals with environmental stability and successful performance. Overall, social capital at macro level is more concerned with the social development and economic growth.

Social Capital at Meso Level

Social capital at meso level refers to the networks and norms that govern interactions among communities (Grootaert, 1999). At this level, social capital may be viewed from a structural perspective in which the network of social capital is structured and the ways in which resources flow through the network. Thus, an analysis of social capital at meso level is focused on the process of network structure development and distribution. Social capital at meso level also refers to social identity and belonging, organisations, and inclusion of insiders and exclusion of outsiders in a common social circle (Coleman, 1990). As such, local associations can be a manifestation of social capital (Grootaert, 1999). Although early contributors to the concept of social capital were pessimistic about the ability of the state to stimulate social capital formation, recently, there has been a groundswell of interest in the application of community development principles to foster social capital at the micro level (Wallis et al, 2004). In organisations, social capital at meso level involves the nature of the work teams, whether homogenous or heterogeneous, and the duration of these work teams. Overall, social capital at meso level is more concerned with local development and organisational growth.

Social Capital at Micro Level

At micro level, social capital emphasises the individual's ability to mobilise resources through local network institutions such as community-based organisations, extended families, and social organisations. Dense and overlapping social networks increase the likelihood of economic cooperation by building trust and fostering shared norms (Grootaert, 1999). Social capital generated within and between firms is especially important for lowering risk and uncertainty at micro level (Fountain, 1998). Social capital at this level enhances valuable information exchange about products and services; and, furthermore, it reduces the costs of contracts and extensive regulations and enforcement. In organisations, micro level social capital refers to recognition (Lin, 2001; Coleman, 1990), cooperation and personal trust (Mutti, 1983), solidarity, loyalty, reputation, and access to sensible information (Lin, 2001). In organisations, social capital at micro level is concerned with the demographic features of employees, length of employment, and human capital. Overall, social capital at micro level is about the steady relations of ego with others, individual development, and personal growth.

Introduction to Theory Building Research Methodology

Theory building is the process of recurring cycle by which coherent descriptions, explanations, and representations of observed or experienced phenomena are generated, verified, and refined (Lynham, 2000). There is an increasing interest and emphasis among HRD scholars towards theory building research methodology due to the need to understand the underlying theories applicable and essential to the practice and success of HRD in organisations. Dubin states that a theory tries to make sense out of the observable world by ordering the relationships among elements that constitute the theorist's focus of attention in the real world (1976). Torraco, on the other hand, suggests that a theory simply explains what a phenomenon is and how it works (1997). Thus, theory building research methodology is a scientific and scholarly inquiry (Lynham, 2002; Swanson, 1997; Gall et al, 1996; Kaplan, 1964). As such, it allows the researcher to engage in multiple research paradigms within the same study (Kaplan, 1964). The research paradigms to be engaged in are dictated by the nature of the theory building method, not by the preferred inquiry methodology of the researcher-theorist or the practitioner-theorist (Lynham, 2002). Theory building research methodology allows the researcher to use quantitative or qualitative research either driven by deductive or inductive rationale while implementing the general theory building research phases such as conceptual development; operationalisation; conformation or disconfirmation; application; and continuous refinement and development. As a result, the methodology provides the researchers with a significant advantage when compared to some other methodologies that lack these utilities and functions; quantitative research, grounded theory research, meta-analysis research, social constructionist research, and case study research, to name a few.

Table 1 (Lynham, 2002) illustrates the contrasting features of empirical-analysis, interpretive, and critical science approaches to theory building research methodology. As the following framework indicates, each approach has its unique and distinctive area of human interest and application; assumptions about knowledge; empirical purpose; and desired outcomes related to the field of HRD. Thus, this framework can be used as a guideline for dominant research methodologies to conduct a study based on theory building research methodology. However, as a prerequisite, the researcher or theorist needs to have expertise of both the phenomenon central to the theory as well as the theory building research methodology itself (Lynham, 2002; Cohen, 1991; Gioia and Pitre, 1990; Campbell, 1990; Van de Ven, 1989; Patterson, 1986; Dubin, 1976; Reynolds, 1971; Hearn, 1958). Thus, there is a recursive nature of the conversation between practical and theoretical expertise inherent in applied theory building inquiry.

In order to establish the expertise function, theory-building model involves two types of sub-expertise, knowledge and experience. Knowledge, in this context, thus, refers to the researcher's or theorist's existing knowledge on the theory being investigated in terms of its foundations and essentials. Experience, on the other hand, refers to prior expertise the researcher's or theorist's has on the theory in terms of its applications and implications to the discipline under study. When these two types of expertise are successfully combined the investigators may carry out the study using theory building research methodology. The following figure by Lynham (2002) displays this relationship between the practical and theoretical expertise required for theory building research methodology.

Nevertheless, it is important to realise that, unlike other research methodologies, an applied theory is never considered complete but rather "true until shown otherwise" (Lynham, 2002; Root, 1993; Cohen, 1991; Dubin, 1978; Reynolds, 1971; Kaplan, 1964). Thus, using a focused, disciplined empirical inquiry and discovery (research), achieving the development and accumulation of a system of coherent, disciplined, and rigorous knowledge and explanation (theory), and practicing an informed and improved action (practice), the theory is under a continuous refinement and development process of which its components constantly reinforce one another. Consequently, the growth cycle of theory-research-practice illustrated in Figure 3 is fundamental for building rigorous and relevant applied theory (Lynham, 2002; Dubin, 1978).

[FIGURE 3 OMITTED]

Overview of Lynham's Applied Theory Building Model

Lynham is one of the scholars in the field of HRD who extensively studied theory building research methodology and its implications to the field. As a result, she proposes the following model for theory building research methodology. To conceptualise the methodology as a recursive system Lynham suggests five distinct phases: a) conceptual development; b) operationalisation; c) application; d) confirmation or disconfirmation; and e) continuous refinement and development of the theory. Figure 4 presents the five-phase depiction of Lynham's model of applied theory building.

[FIGURE 4 OMITTED]

Evaluation of Lin's Theory of Social Capital

Consequently, applied theory-building research consists of two broad components such as theorising to practice and practice to theorising (Lynham, 2002). Each of these components are crucial in producing distinct in-process outputs to guide the applied theory-building research, and ultimately, result in a trustworthy, rigorous, and relevant theory for improved action (Lynham, 2002; Denzin and Lincoln, 2000; Marsick, 1990; Van de Ven, 1989). Furthermore, Lynham (2002) suggests that the five phases of the applied theory-building research method take place within this larger two-component theory-building frame.

In the following sections, using the five-phases of Lynham's theory building research model, the paper will review and critique Lin's social capital theory. Which phase is carried out first in the theory-building process is dependent on the theory-building method being employed by the researcher-theorist (Lynham, 2002). As a result of Lin's approach, the discussion would sequence the phases from perspective of a theorising-to-practice strategy of applied theory-building research.

Conceptual Development

In the conceptual development phase, the theorist formulates initial ideas in a way that depicts current, best, most informed understanding and explanation of the phenomenon, issue, or problem in the relevant world context (Dubin, 1978); Lynham, 2000, 2002). The phase of conceptual development is one of the two phases that dominate the theorising component of theory building research methodology (Lynham, 2002). In this phase, the paper will discuss whether Lin's theory of social capital develops an informed conceptual framework that provides an initial understanding and explanation of the nature and dynamics of the social capital phenomenon as the focus of the theory. Consequently, the paper will examine the development of the key elements of the social capital phenomenon; provide an initial explanation of the interdependence of these key elements; and present the general limitations and conditions under which the theoretical social capital framework can be expected to operate.

Key Elements of Lin's Theory of Social Capital

The premise behind the notion of social capital is simple and straightforward: investment in social relations with expected returns in the marketplace (Lin, 2001).

Lin (2001) offers four reasons why embedded resources in social networks enhance the outcomes of actions. There are four key elements involved in Lin's theory. These four elements--information, influence, social credentials, and reinforcement--may explain why social capital works in instrumental and expressive actions not accounted for by forms of personal capital such as economic or human capital (Lin, 2001).

The flow of information is facilitated. Lin (2001) suggests that in the usual imperfect market situations, social ties located in certain strategic locations and hierarchical positions can provide an employee with useful information about opportunities and choices otherwise not available. Hence, such information can help organisations in staffing--especially practising the "person-organisation fit" recruitment model. This is mutually beneficial for both parties--the organisation and employees.

These social ties may exert influence on organisational agents who play a critical role in decisions involving the actor. Lin (2001) argues that some social ties, due to their strategic locations and positions, also carry more valued resources and exercise greater power on organisational agents' decision making process. Consequently, the social ties of an employee may positively influence people involved in the decision-making processes in the organisations.

Social ties and their acknowledged relationships to an employee may be conceived by the organisation or its agents as certifications of the employee's social credentials, some of which reflect the employee's accessibility to resources through social networks and relations--employee's social capital. As a result, an employee with such network ties, to an extent, reassures the organisation and the agents involved in the organisational decision-making processes that he or she is capable of providing added resources beyond his or her personal capital (Lin, 2001).

Social relations are expected to reinforce identity and recognition. Some people reach higher levels of creativity, consciousness, and wisdom. Maslow identifies this level as "self-actualisation" (1970). The need for self-actualisation is the desire to become more and more what one is, to become everything that one is capable of becoming. People who have everything can maximise their potential. Social capital plays an essential role in this highest level of Maslow's theory--self-actualisation. Individuals may not achieve this level without the help and the support of others. In a sense, to achieve self-actualisation, individuals need to utilise their social capital. Thus, the final element of reinforcements is essential for the maintenance of mental health and the entitlement to resources (Lin, 2001).

Interdependence of Key Elements in Lin's Theory of Social Capital

As Figure 7 indicates, the four elements involved in Lin's social capital model are interdependent of each other in respect to their functionality and utility both by the individual and the organisation. Without the presence of one of the elements, the others will not fully function; thus, social capital may not be thoroughly achieved. As a result, "information" affects "influence", which, then, structures "social credentials", and all these three elements are constantly empowered by "reinforcement." It may be concluded that Lin's theory of social capital provides a holistic view of the phenomenon under study.

Limitations and Operating Conditions of Lin's Theory of Social Capital

Like any other theory, Lin's social capital model is not immune from certain limitations and operating conditions. Social capital in organisations is relational (shared) instead of being an individual private property. It is also a group and public good. It is often produced as a by-product of activities oriented to specific goals. While it may be used instrumentally, it may also serve in strengthening social recognition and social identity. Thus, social capital may be viewed as a component and requisite of well-being.

It can be argued that much of the economic backwardness in the world can be explained by a lack of mutual confidence (Arrow, 1972). As a result, trust, in turn, is an outcome and a condition for social capital. Social capital is built upon three types of trust: inter-personal trust inside a group; inter-personal trust among 'strangers'; and systemic trust in public and private organisations. Inside an integrated group, social capital can take the form of exclusive interactions that exclude others from socialisation, power, and benefits the group offers. This may negatively influence the non-group members, and may, to an extent, cause them to feel alienated from the work environment. Despite the fact that social capital is often viewed as a beneficial intangible for the organisation, when a problem arises among employees or groups, social capital, unexpectedly, may lead individuals to distrust each other. In a sense, social capital is based on a fragile structure; and therefore, it is, to an extent, limited to individual assertive intentions and good will.

Operationalisation

In the operationalisation phase, the theory is studied in terms of potential connections between the conceptual development phase and everyday life practices. This phase, however, is subject to confirmation and testing of the phenomenon in real-life situations. In order for the theoretical framework to evoke trust and confidence, the initial explanation of the phenomenon, problem, or issue embedded in the framework must be applied to and empirically confirmed in the world in which the phenomenon, issue, or problem occurs (Lynham, 2002). Cohen (1991) suggests the components or elements necessary to confirm the phenomenon can be in various forms such as confirmable propositions, hypotheses, empirical indicators, and so-called knowledge claims. Thus, a primary output of the theorising component of theory-building research in applied disciplines is, therefore, an operationalised theoretical framework; that is, an informed theoretical framework that has been converted into components or elements which can be further inquired into and confirmed through rigorous research and relevant application (Lynham, 2002). Given this framework, the paper will present the operationalisation phase of Lin's theory of social capital within the confirmable propositions.

Major Propositions and Hypotheses

To support his theory Lin's proposes the following set of postulates and propositions:

The Structural Postulate

Valued resources are embedded in social structures in which positions, authority, rules, and occupants usually form pyramidal hierarchies in terms of the distribution of valued resources, number of positions, level of authority, and number of occupants (Lin, 2001). Thus, in a situation when there is high level of hierarchy, the valued resources will be highly concentrated. Similarly, when there are fewer positions, the command of authority will be higher and the number of organisational agents will be smaller.

The Interaction Postulate

Interactions usually occur among actors with similar or contiguous characteristics of resources and lifestyles (Lin, 2001). As a result, when there is a great similarity among the characteristics of the resources, it will require less effort in interaction, providing a homogeneous environment.

The Network Postulate

In social networks, directly and indirectly interacting actors carry varying types of resources (Lin, 2001). Although some of these resources--personal resources and human capital of the individuals--may be individual's personal possessions, a majority of the resources, however, are indirectly taken for granted as a result of individual's contacts, structural positions that he/she is occupying or is in contact with.

The Action Postulate

Actors are motivated to either maintain or gain their resources in social actions--purposive actions. Purposive actions can be grouped into two actions: expressive actions in which individuals act to maintain their resources and instrumental actions in which individuals act to gain resources (Lin, 2001). Humans, primarily, are motivated to maintain their resources; as a result, expressive action becomes the primary form of action in motivating people to engage in utilising their social capital.

The Social-capital Proposition

The success of action is positively associated with social capital (Lin, 2001). A failure in the actions to maintain or gain resources would also be linked to failure in the attainment of social capital. Only in successful actions can individuals achieve social capital.

The Strength-of-position Proposal

The better the position of origin, the more likely the actor will access and use better social capital (Lin, 2001). It is a human characteristic that higher and stronger positions are always valued higher; therefore, positional influence is important in social capital.

The Strength-of-strong-tie Proposition

The stronger the tie, the more likely the social capital accesses will positively affect the success of expressive action (Lin, 2001). Social capital becomes powerful when the ties among individuals are stronger.

The Strength-of-weak-tie Proposition

The weaker the tie, the more likely ego will have access to better social capital for instrumental action (Lin, 2001). When the ties among individuals are weak, to increase the strength of their ties, the natural action to take will be instrumental action to gain resources. This is done with the purpose of gaining resources; and thus, increasing social capital.

The Strength-of-location Proposition

The closer individuals are to a bridge in a network, the better social capital they will access for instrumental actions (Lin, 2001). In order to utilise instrumental action, an individual needs to be able to access to a social network. The closer the individual to this network, the more successful his or her instrumental actions.

The Location-by-position Proposition

The strength of a location (in proximity to a bridge) for instrumental action is contingent on the resource differential across the bridge (Lin, 2001). More variety of accessible resources will enable the individual for higher levels of success in his or her attempts to gain resources.

The Structural Contingency Proposition

The networking (tie and location) effects are constrained by the hierarchical structure for actors located near or at the top and bottom of the hierarchy (Lin, 2001). The individual's efforts both in maintaining and gaining resources are partially dependent upon his or her status in the web of networks.

Confirmation or Disconfirmation (Verification)

The confirmation or disconfirmation phase of theory building research methodology can also be called as the decision-making phase, leading to a decision to confirm or disconfirm the theory under review. This phase involves planning, design, implementation, and evaluation of an appropriate research agenda as well as research studies to purposefully inform and intentionally confirm or disconfirm the theoretical framework central to the theory (Lynham, 2002). Lin (2001) states that the propositions made by the theory may be exogenous (given) to the explication of a theory, but there is no guarantee that they are empirically valid. Thus, at this point of time, Lin (2001) neither completely confirms the validity of his theory nor does he disconfirms the validity of his propositions. He suggests that when instruments become available, the assumptions themselves must be subject to further research and empirical examination.

Application

A theory must be threaded through the application phase in order to enable further study, inquiry, and understanding of the theory in action (Lynham, 2002). Furthermore, it is in the application of a theory that practice gets to judge and inform the usefulness and relevance of the theory for improved action and problem solving (Lynham, 2000). Without the application phase, theory-building model, which aims to bring theory and practice together, may be incomplete.

As stated in the previous section, there is no a single study that entirely uses Lin's model to empirically validate the propositions of his theory. However, the literature indicates that there is a variety of studies conducted to measure the applications, implications, and utility of social capital at various levels in different disciplines (Rose, 2001; Dessus, 2001; Fafchamps and Minten, 2001; Siebert, Kraimer, and Liden, 2001; Witte, 2001; Johnson, 2001; Dess & Shaw, 2001; Baker, 2001; Knack, 2000; Grootaert, 1997, 1999; Leenders and Gabbay, 1999; Saegert and Winkel, 1997; Bazan and Schmitz, 1997; Jones, 1983; Louis, 1980). However, it should be noted here that none of these empirical studies have solely implemented Lin's theory of social capital in their research, but they studied some of Lin's propositions to measure and understand the significance of social capital in their respected fields. Furthermore, there is a variety of reasons as to why it is not always applicable to measure social capital. Social capital is a multidimensional concept, in which it is difficult to identify factors, consequences, and functions, and to measure relational dimensions instead of characteristics of individuals.

Continuous Refinement and Development

The recursive nature of applied theory-building research requires the ongoing study, adaptation, development, and improvement of the theory in action and ensures that the relevance and rigor of the theory are continuously attended to and improved on by theorists through further inquiry and application in the real world (Lynham, 2002). As a result, the propositions, hypotheses, and assumptions presented by a theory are in constant state of refinement and development.

Lin has a substantial understanding about theory building research inquiry and the qualities of a sound theory in that he agrees that his theory itself is subject to modification or even refutation when assumptions are invalidated. Furthermore, Lin (2001) advocates the continuous refinement and development of his theory by acknowledging that theory guides research, and it must continuously be subjected to verification and possible modifications. Hence, it is up to the individual disciplines and scholars to refine and develop Lin's theory from the perspective of their respected disciplines.

Implications of Social Capital Theory to the Field of HRD

More organisations are becoming aware of the importance of social interactions and relationships at work. Social capital theory has recently begun to gain attention and interest in the field of HRD. As a result, there is an increasing number of studies about social capital in HRD profession (Tuttle, 2002; Storberg, 2002). Another current development in the field of HRD is the increasing significance and influence of applied theory-building research model. Torraco discusses the importance of a sound theory in his paper on knowledge management and states that a theory that purports to advance the understanding of how knowledge is managed in organisations must draw from a broad theoretical base because the phenomenon the theory attempts to explain is itself a pervasive concept that effects every aspect of how an organisation functions (2000). Similarly, social capital theory is an important phenomenon to address the implications and the utility of social ties and relations in organisations.

Lin suggests that his social capital theory proposes four explicit characteristics. The concepts of social capital theory are relational in nature and cannot be reduced to the individualistic or psychological level (Lin, 2001). The field of HRD attaches great importance to the relationships of employees among themselves and with the organisation to ensure the process of developing and unleashing human expertise for the purpose of improving performance is achieved. As such, the basic components of social capital theory, such as social relations among employees, mutual trust--both employees' trust to the organisation, and the organisation's trust to its employees, and employees attitude towards cooperation, are equally important and significant for the field of HRD.

The theory is intrinsically interwoven within a hierarchical structure (Lin, 2001). Organisations, where the field of HRD is practised, are generally composed of various organisational structures. Understanding the fundamental basics of hierarchical organisational structures is important in Organisation Development (OD)--a function of HRD. Thus, the theory may provide the OD practitioners with an opportunity to examine the hierarchical social structures of the organisation during an intervention process.

The theory entails actions on the part of the individuals, thus requiring a micro-level analysis (Lin, 2001). A micro-level analysis would involve reputation and trust of actors who use their own networks in pursuing social capital. Work teams, for example, are a focal point in HRD practices in organisations. A work team can only survive, function, and achieve its goals when its members are motivated enough to willingly take action to involve in the process, interact with other members, and use their human and social capital to achieve common organisational goals.

The development of social capital theory has been on close reciprocal integration of theorising and empirical research; thus avoiding pitfalls of infinite abstract-to-abstract deductions from assumed theories or mindless empiricism (Lin, 2001). Without good theory the field of HRD would be an impoverished domain (Turnbull, 2002). Furthermore, the close proximity of the theory of social capital with theory-building inquiry is meaningful as theory building is important to HRD profession to advance professionalism in and maturity of the field; to help dissolve the tension between HRD research and practice; and to develop multiple and inclusive methods of research for theory building and practice in HRD (Lynham, 2000).

In summary, social capital has become more important than ever because of the critical significance of knowledge sharing to organisations and business success. Thus, HRD can play a strategic role in creating an environment where social capital can be fostered, utilised, and enhanced to increase organisational performance and productivity. Lin's theory of social capital with its proponents and propositions as evaluated through Lynham's theory-building research methodology is capable of utilising one of the most salient forms of capital.
Table 1: Contrasting Features of Empirical-Analytical, Interpretive,
and Critical Science Approaches to Theory Building Research
(Lynham, 2002)

Views of Theory Areas of Human Interest Assumptions about
Building Inquiry and Application Knowledge

Empirical- * Work * Observational data
Analytical * Technical, that is about are considered the
 practice affected foundation of
 through newly developed knowledge
 means to achieve * Generalisations
 establised ends characterised by
 empiricism

Interpretive * Interaction (language) * Constructed meanings
 * Practical, that is, of stakeholders are
 about policy and considered the
 practice informed foundation of
 through interpretations knowledge
 of daily events and
 contexts

Critical * Power (reason) * Constructed meanings
 * Emancipatory, that is, of stakeholders
 about policy and considered the
 practice changed through foundation of
 critique and recovering knowledge
 self-reflection to unite * Critique of
 theory and practice ideologies believed
 to promote needed
 social change, which
 is open and ongoing

Views of Theory Empirical Desired HRD Related
Building Inquiry Knowledge Purpose Outcomes

Empirical- * To explain, * Generalisable laws
Analytical predict, and and explanations of
 control organisational and
 human behaviour

Interpretive * To make sense * Common meanings
 of, understand, and clarifying
 and interpret interpretations of
 organisational and
 human actions and
 experiences

Critical * To enlighten * Underlying, hidden, or
 and emancipate unreflected choices
 through the surfaced to inform
 process of reasoned human
 critique and and organisational
 identifying choice
 potential


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Mesut Akdere

University of Wisconsin-Milwaukee
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