Nahapiet and Ghoshal’s (1998) seminal paper is one of the most cited papers on SC theory3. The authors recognised that different writers in the field presented different definitions, dimensions and theories of SC; they integrated the various ideas to produce a framework of SC based on three different interdependent dimensions – structural SC (SSC), relational SC (RSC) and cognitive SC (CSC). Lee (2009) reviewed the SC literature and concluded that SC research was concentrated into the three core dimensions identified by Nahapiet and Ghoshal. Originally described as a framework for understanding the collective nature of SC, the three dimensions also provide a useful way of understanding, describing and analysing individual SC. It is for these reasons that the Nahapiet and Ghoshal framework has been chosen as the basis for this study. The three dimensions are discussed in more detail below:
Structural SC describes the linkages between people and is related to social networks and the size, density, hierarchy and centrality of networks – i.e.
who are you connected to and how you reach them. Krackhardt (1989) referred to the importance of the absence or presence of network ties between actors and the network configuration in terms of its ability to provide access to information, resources and support for the achievement of individual goals and objectives. Burt (199 ) suggested that the ‘luck’ some people had in getting faster promotions was more to do with an individual’s network connections.
Improving the size of networks and the quality of the individuals within it improves access to other SC resources (Forret, 2006). Bonding networks (based on a small closely knit group of strong ties) enhance interaction efficiency (Krackhardt, 1992), build financial resources, reputations and legitimacy (Uzzi, 1999) and create psychological closeness and the flow of privileged information and resources (Walker, Kogbut and Shan, 1997).
3 The ProQuest academic search engine showed 1995 citations on 10 September 2013.
Alternatively, bridging networks, developed through brokering structural holes, create wider access to knowledge and resources including an increase in career mobility and executive interaction (Gabbay and Zuckerman, 1998).
Relational SC refers to “the kind of personal relationships people have developed with each other through a history of interactions” and may reflect friendships that affect behaviour (Nahapiet and Ghoshal, 1998, p. 244).
Granovetter (1985, p. 504) had already observed that “most behaviour is embedded in networks of interpersonal relations” and that personal relations within the social structures contributed to individual achievement. This is linked to the motivation needed to use SC for others’ benefit and is related to concepts such as reciprocal exchange, trust that such exchanges will take place (Nahapiet and Ghoshal, 1998) and respect, trustfulness and friendliness (Liao and Welsch, 2003). This suggests that social actors may have similar connections within their networks but the quality of their relationships and emotional attachments may differ leading to different benefits and outcomes for each individual. As such RSC refers to assets that are created and used through relationships based on behaviours rather than on structures.
Nahapiet (1999) describes three key features in building effective social relationships: 1) genuine commitment to the relationship believing it to bring some on-going and future mutual benefit (i.e. reciprocation, identification and obligation; 2) a high level of trust, which is often based on the competence of others as well as their commitment to shared objectives and 3) strong personal bonds, although these may be difficult to establish. The earlier discussion of SC intimated that these features may be easier to build within established networks sharing strong bonds and this reflects Bourdieu’s (1998) notion that this may lead to power differentials that are created and recreated over time.
The study of trust has received considerable attention in a variety of contexts but will not be covered in detail in this thesis. However, trust is needed for effective interdependent relationships (Moran, 2005) and is predicated on norms of behaviour. Trust is generally defined as the belief that “the results of somebody’s intended action will be appropriate from our point of view” (Misztral,
1996, p. 11) and interpersonal trust is based on “reliability, predictability and fairness” (Zaheer, McEvily and Perrone, 1998, p. 143). Coleman (1990) believes that a norm exists when the socially-defined right to control an action (behaviour) is held not by the actor but by others.
Bonding (closed) networks are seen to be better for building trust as they rely on the co-operation and mutuality of actors (Tsai and Ghoshal, 1998) and reciprocity, solidarity and transparency (Lin, 1999b). Bonding networks made up of strong ties also facilitate a sense of belonging (identity) through emotional intimacy, self-esteem, reputation and status attainment (Oh, Labienca and Chung, 2006). Alternatively, actors involved in bridging networks are seen to be self-serving and need to develop more generalised or “swift trust” (Meyerson, Weick and Kramer, 1996, p. 167) to enable the use of network resources such as knowledge and information (Levin and Cross, 2004). In many of these studies the presence (or absence) of a closed network has been seen as a proxy for trust rather than seeing trust as a characteristic reflecting the quality of interpersonal relations (Moran, 2005).
Cognitive SC refers to resources within the network that are influenced by shared values, interpretations and systems of meaning between social actors that are developed over time (Nahapiet and Ghoshal, 1998). Tsai and Ghoshal (1998, p. 465) describe this dimension as “… attributes like a shared code or a shared paradigm that facilitates a common understanding of collective goals and proper ways of acting in a social system” and Staber (2006, p. 195) sees CSC attributes as “… created and sustained through relationships, which, themselves, evolve in a changing environment. Meaning systems evolve over time as actors continually negotiate a shared understanding of what they are doing”.
Liao and Welsch, (2005) found that actors who shared values around behavioural expectations, and had similar attitudes, created efficient verbal exchanges. Shared narratives and stories helped facilitate information exchange between actors thus creating and sustaining the context in which the exchange takes place (Nahapiet and Ghoshal, 1998) and helped to establish
easily accessible recurrent conversations (Youndt and Snell, 2004). It is these shared histories and meanings that help to guide an individual’s behaviour and provide expectations for what is and is not acceptable in collective life (Walumbwa and Christensen, 2013). This relates to Bourdieu’s (1989) idea of symbolic structures and creates a link between the cognitive structures of individuals and broader social structures which may ultimately lead to taken-for-granted assumptions.
Although considered to be a powerful component of SC, this third dimension has not been discussed to any great extent in the SC literature (Liao and Welsch, 2003; Nahapiet and Ghoshal, 1998). In addition, Ibarra, Kilduff and Tsai (2005) called for the need to examine more closely the links between interactions within a network structure and an actor’s perceptions and actions, whilst Kilduff and Tsai (2003) advocate the use of qualitative methodologies that enable researchers to get closer to understanding actors’ perceptions, interpretations and meanings of relational and CSC and how these are played out through network activity.