Social Capital: Everything you need to know

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Social capital is a collection of people networks and relationships connected by shared norms/ideas, values, and behavior that facilitate co-operation & growth. These networks are like WhatsApp groups, friend circles, LinkedIn connects, professional cohorts, etc. Putnam[1] defined it as “features of social organization such as networks, norms and social trust that facilitate coordination and cooperation for mutual benefit.” Social capital results in collective assets (tangible or intangible) like:

  • Shared norms (when someone sneezes, you say “Bless you!”)
  • Values (loyalty to your family or relevant group)
  • Beliefs (religious beliefs)
  • Trust (interpersonal trust)
  • Networks (Professional networks like Facebook groups, relations student-teachers/ mentorship)
  • Social relations (family, friends, colleagues)
  • institutions (government, educational institutes)

Social capital facilitates cooperation, individual and group well-being, collective action for mutual benefits, innovative ideas, possible opportunities, and access to information.

Characteristics of Social Capital

There are multiple core elements[2] of social capital.

  1. Community – It is a group of people in a certain geographical boundary that usually have shared group goals, values, norms, ideas, etc. Community is central to social capital as capital is seen between and within communities.
  2. Social Networks – They refer to the variety of ties one has with people within one’s community or outside the community. There are formal and informal networks where formal usually refers to ties made through some sort of formal organization while informal networks include our family and friends.
  3. Participation – People’s social participation is considered extremely important to health by WHO.
  4. Volunteering – It refers to people freely giving their time and effort to work towards a certain goal. It is an important aspect of social capital at the community level.
  5. Trust – Social capital revolves around two kinds of trust – trust between familiars or interpersonal trust and generalized or social trust which refers to trusting strangers.
  6. Social Exclusion – Some groups are defined by excluding certain people from the social, economic, and political areas of a community. It also includes the marginalization of communities. 
social capital theory psychology
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Relationships between people are described with Strong/Weak Ties & Horizontal/Vertical Ties

Strong & Weak Ties

Strong and weak ties aren’t specifically types of social capital but rather talk about the strength of a certain tie amongst people in a group. Granovetter distinguished between social ties based on their strength[3]. Strong ties refer to close and binding relationships like relationships with immediate family members and close friends. Weak ties are the exact opposite where there isn’t much cohesiveness and is usually causal and momentary. It can also be contingent on certain things. People meeting for the first time or on a blind date is an example of this. Strong ties are usually based on trust, understanding, solidarity, affection, willingness to help and knowing one another. Weak ties allow informational exchanges and link people to the broader communities and a wider range of potential resources.

Vertical & Horizontal Ties

The horizontal and vertical social ties refer to those that exist based on hierarchical[4] structures or positions and show the direction of the relationship. 

Horizontal social capital tends to reflect ties that exist among people or groups of equal resources, power, etc. It is a lateral relationship amongst equals and operates via shared values and norms while vertical social capital operates through formal hierarchical structures. Vertical capital talks about relationships between hierarchical or unequal individuals or groups having different access to resources and power. 

Types of Social Capital: Bonding, Bridging, and Linking Capital

The types[5] of social capital are classified based on group dynamics, the strength of the tie (relationship bond), and hierarchical structures. These refer to the types of social[6] ties based on the interests and goals of a group. 

Bonding Social Capital

Bonding refers to social capital created within a group having the same interests and goals. It acts as a social support safety net. This kind of social capital results from close bonds such as family members, spouses, or even neighbors and are often alike (ethnicity, race, age, education, religion, gender, or even political affiliation).

Bridging Social Capital

Bridging is the social capital created between groups. It refers to relationships that are relatively more distant and more loosely associated like out-of-touch friends or workmates. Members in the bridging capital typically do not belong to the same group. It narrows the gap between groups and is crucial for mobilizing community resources. When individuals in different groups realize their shared interests and goals, they work together to achieve them. It also enables people and communities to procure community resources. 

Linking Social Capital

Linking refers to connecting two or more members of bonding or bridging social capital with varying social positions, norms, functions, and power. It helps reach out to people outside of the community. These people are those who connect networks of people. Some of them could be influencers, advisors, or people with multiple professions.

Bonding and bridging include mostly horizontal ties as they are relationships with equals or people having similar interests, goals, etc. Linking is a mostly vertical social capital because it is rooted in a hierarchical structure. 

Strong Ties Weak Ties
Bonding (horizontal ties)Close friends or immediate family with similar social aspects like social class or religionMembers with the same professional identity from different companies
Bridging (horizontal ties)Trusted members with different primary groups like friends from different colleges or sports teamsMembers with different interests or social characteristics
Linking (vertical ties)Work colleagues with different hierarchical positions from the same companyDistant colleagues with different hierarchical positions

14 Ways to build your social capital

A strong social network opens up a variety of avenues and opportunities and is as important as any other type of capital. Social capital is especially important in recent times with the internet increasing connectivity. Building social capital implies improving the way people interact, create, collaborate and live together. Individually, a person can build their social capital by looking at their intentions and attitudes whereas, on a societal level, it relates to social structure. This process can focus on the structural as well as the cognitive dimension of social capital. For example, civic workers[7] are more involved in civic affairs than other citizens which facilitate group benefits for non-civic workers. 

  1. Network with people proactively. 
  2. Create a diverse network.
  3. Keep in touch with your school and college mates.
  4. Milk the advantages of social media.
  5. Always follow up.
  6. Volunteer help and even ask for help.
  7. Compliment people and show you value them.
  8. Do small collaborations with people.
  9. Take an interest in their work and express how you resonate with it.
  10. Don’t always focus on reaping social benefits.
  11. Participate in social gatherings and do small talk.
  12. Stay fresh in other people’s memory.
  13. Hone your transactive memory (memory of who knows what).
  14. Take the effort to remember your last conversations with people, birthdays, hobbies, and life events.
Social relationships can act as currency when you build your social capital strategically.  Share on X

Dimensions of social capital

Janine Nahapiet and Sumantra Ghoshal identify three dimensions[8] of social capital that can apply to any relationship or group connection. So each WhatsApp group, Company, Religious organization, coaching class, sports team, family, friend circle, place of worship can be described according to its Structural, Cognitive, and Relational properties. These are closely tied to one’s identity, which itself has multiple levels.

Structural Cognitive Relational
Social structureShared understanding Nature & Quality of Relationships
Network properties, Roles, Rules, ProceduresShared language, codes, and narratives, Shared values, attitudes, and beliefs, Shared goals, purpose, and visionTrust and Acceptance, Norms and privileges, Obligations and expectations, Identity

Structural social capital

It is the underlying pattern of social networks and other structures like associations, clubs, cultural groups, and institutions. These social[9] structures have particular rules, procedures, and precedents that govern them. These structures provide various benefits to members like help them get a job, certain information, and access resources. 

Cognitive Social Capital

Cognitive social capital[10] refers to the type of social capital that provides shared representations, interpretations, schemas and systems of meanings within a certain group. It is visible through shared vocabulary and narratives. It is as the basis for communication through shared language and thinking patterns, common goals, vision, and culture. 

Relational Social capital

It is the affective dimension of social capital that talks about the characteristics and qualities of personal relationships. The main aspects of this dimension include[11] trust, obligations, respect, relational closeness and reputation and describes[12] relationships in terms of interpersonal trust, the existence of shared norms and identification with other individuals.

Difference between structural, cognitive, and relational social capital

Structural social capital reflects how connected a person is to a given community (e.g. participation in organisations), or simply put, what people ‘do’. Cognitive social capital reflects subjective feelings (trust, norms of reciprocity, connectedness) or what people ‘feel’. Structural social capital is tangible and is visible through its roles, rules, precedents, and procedures. The relational dimension is a function of people’s cognition and is intangible as it looks at what people are feeling. Thus, each dimension can be applied to a single relationship. 

Importance of Social Capital

Social capital facilitates the efficient working of people towards a common goal or purpose through trust, shared identity, norms, values, and mutual relationships. The scope of social capital is vast and is applicable to not only society but also businesses and large organizations, politics, and many other areas. It is as important as financial and human resources. A recent study[13] describes its importance in sustainable disaster relief and management. A study even showed that excess bonding capital can predict higher corruption[14] in towns compared to excess bridging capital. Research[15] suggests the individual and team levels of social capital are linked to increased job performance, work engagement & psychological well-being. Social capital quite simply can even help you get a job, a recommendation, personal favors, opportunities, business investors and partners, etc. 

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Personality & Social Capital

A study in 2018[16] looked at creating social capital and psychological characteristics using the Big Five personality test and the Social Survey of the Networks of the Dutch. Social capital is associated with extraversion and openness leading to the creation of instrumental social capital. Emotional stability, extraversion, and agreeableness predict expressive social capital. Conscientiousness aided instrumental social capital when the respondents were older or especially when weak ties existed. 

Internet & Social Capital

The internet has essentially brought the world closer together especially through social media sites and apps like Facebook, Instagram, Twitter, etc. These apps and websites are instrumental in building social capital. Many small businesses use these websites to market and sell their products. The pandemic also saw a surge of people shifting their physical businesses online and building their customer base all over the country. A study[17] saw how Facebook promotes bonding social capital in the network of high school friends, and traditional media promotes both bridging and bonding social capital.

What is measured in Social Capital?

Social capital is difficult to measure due to a lack[18] of a standard definition, varying levels of analysis, lack of context, etc. However, the most common aspects of social capital that you can measure meaningfully are:

  1. Trust between members within a group and between groups
  2. Diversity of people within a group
  3. Exchange of information
  4. Range of status levels
  5. Frequency & quality of volunteering help and support
  6. Satisfaction with the existence of members and groups in your network
  7. Togetherness & unity

These can be assessed at an individual, group/organizational, and community/national level.

Community or National Level

  • Structural SC: Institutional trust, governing trustworthiness, structural characteristics and network formation (network density, strong ties and weak ties, ties within the community), association membership, engagement and voluntary activities (civic engagement, social and political participation).
  • Relational SC: Social interactions, relationships, and cohesion. 
  • Cognitive SC: Affective bonds, shared language, inside jokes & references, and collective goals. 

Group or Organizational Level

  • Structural SC: Network structural characteristics (network links, centrality, density, diversity, size, frequency, redundancy), network ties (strong ties, weak ties, bonding, bridging and linking ties), association membership and institutional links and trust. 
  • Relational SC: Ties with close people (immediate family members, friends & colleagues at work) and external stakeholders (e.g. executives from other businesses, board members, political leaders, government bureaucratic officials, and community leaders), interpersonal trust
  • Cognitive SC: Group norms, values & obligations, reciprocity, goals, and attitudes & beliefs.

Individual Level

  • Structural SC: Degree of trust, social network position (network centrality, size, density, homogeneity/heterogeneity, homophily/heterophily, tie strength), number of memberships, social participation, social connections and relationships (bonding, bridging, linking, connectedness), and the volume of social resources
  • Relational SC: Social interactions, relationships, networking, social support, cohesion, and associability.
  • Cognitive SC: General and interpersonal trust, group goals, culture, reciprocity, safety, and opinions on multiculturalism to see the individual’s tolerance of diversity.

Disadvantages & Problems of applying Social Capital

Social capital[19], like most things, is not always useful.

  1. It can foster behavior that diminishes rather than improves economic performance by favoring certain people.
  2. It may act as a barrier to social inclusion and social mobility leading to the division of communities
  3. It may aid in the facilitation of crime, education underachievement, and health-damaging behavior by creating an us vs. them attitude.
  4. It can constrain individual attitudes, behaviors, choices, and actions to align with a group.

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