The Negative Effects of Social Capital in Organizations: A Review and Extension by Gurumurthy Kalyanaram
In this issue, we are reproducing the introductory section of an important research article, The Negative Effects of Social Capital in Organizations: A Review and Extension, by Pillai, Hodgkinson, Kalyanaram and Nair published in International Journal of Management Reviews (DOI:10.1111/ijmr.12085). This manuscript offers many opportunities for further research and reflection. Accordingly, we are presenting part of this manuscript.
Pillai, Hodgkinson, Kalyanaram and Nair (2015), “The Negative Effects of Social Capital in Organizations: A Review and Extension,” in International Journal of Management Reviews (DOI:10.1111/ijmr.12085). This paper was one of the top five cited IJMR papers from 2017.
Numerous studies have examined the positive effects of social capital in organizations, whereas the possible negative effects have attracted considerably less scholarly attention. To rectify this imbalance, this paper first undertakes a rigorous review of the published scholarly empirical evidence pertaining to the negative effects of social capital in organizations through a search of Web of Knowledge and Scopus, and then enumerates six potentially negative effects arising from increased levels of social capital. Our analysis focuses on negative effects arising from bonding social capital and those arising from dense networks and closure, advancing new theory to elucidate the generative mechanisms that give rise to the proposed negative effects. Finally, we identify potential moderators of the negative effects thus theorized. Using the lens of social identification theory, we argue that dysfunctional identification processes restrict the processing of information and stimulate over commitment to established relationships, diluting in turn the dialectical process, and inhibiting individual learning within organizations, culminating in group think, the postponement of structural adjustments, the non-rational escalation of commitment, and the blurring of firms’ boundaries. Our analysis thus furthers the agenda of a more balanced inquiry into the effects of social capital in organizations.