Social Capital ,Knowledge Processes and
Entrepreneurial Success
~Sharada B.
Social Capital ,Knowledge Processes and
Entrepreneurial Success
Social Capital
of firm
Knowledge
Creation
/Acquisition
Knowledge
Assimilation
Knowledge
Exploitation
Knowledge Processes of firm
Entrepreneurial
Success
Focus Areas
Social Capital
Knowledge Processes (Creation,
Assimilation, Exploitation)
High Technology Entrepreneurship
Background Areas
Resource based View
Entrepreneurship
Social Capital
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Social capital is defined as “The sum of actual and potential resources
embedded within ,available through, and derived from the network of
relationships possessed by an individual or social unit. Social capital thus
comprises both the network and the assets that may be mobilized through
that network”(Nahapiet and Ghoshal).
The 3 dimensions of social capital that have been discussed in literature are
the Structural, Relational and Cognitive.
High Technology Industries
Medcof 1999 :“one whose business activities are heavily dependent upon innovation in
science and technology”.
Baruch, 1997 :those in which R&D accounts for a substantial portion of the business’s
operations, in which technological innovation is on the cutting edge, and in which a
large proportion of the employees have university degrees (10 percent or more equals
a high tech firm)
Reeble 1990 :“high-technology industries engage in activities that have high rates of
change, high levels of research and development expenditures, and innovative
products”.
Shanklin & Ryans, 1984 :high technology ventures are grounded in science and work
with technology that obsoletes previous technology
Review
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Social capital, intellectual capital, and the organizational advantage. Academy of
Management
J Nahapiet, S Ghoshal - The Academy of Management Review, 1998
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Discusses the different dimensions of social capital .Contributes by adding a new dimension
called cognitive dimension. Conceptual paper linking social capital, intellectual capital and
organizational advantage. Social capital provides enables the activities of knowledge and
exchange thereby resulting in greater intellectual capital.
Social Capital, Knowledge Acquisition, and Knowledge Exploitation in Young TechnologyBased Firms
Helena Yli-Renko, Erkko Autio and Harry J. Sapienza
Strategic Management Journal,2001
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Knowledge acquisition mediates between social capital and knowledge exploitation. Studies the
relationship between the firm and only its key customer.
Social capital :Social interaction, relationship quality, network ties.
Knowledge Exploitation : New product Development, Technological Distinctiveness, Sales costs
Review
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Social capital and entrepreneurial growth aspiration: a comparison of technology- and nontechnology-based nascent entrepreneurs
Jianwen Liao and Harold Welsch,2003
How the 3 dimensions of social capital interact among each other and their relationship with
entrepreneurial growth aspiration in tech and non tech ventures.
Social capital, knowledge management, and sustained superior performance
Hoffman, James J.; Hoelscher, Mark L.; Sherif, Karma
Journal of Knowledge Management,2005
5 dimensions of social capital: information channels, social norms, identity,obligations and
expectations, moral infrastructure
Social capital can enhance knowledge management within an organization by
Facilitating combination and exchange required for creation of IC (Nahapiet and Ghoshal,1998)
Role in the development of core competencies (Kogut and Zander,1996)
Increases efficiency of action(Lesser,2000)
Encourages co-operative behavior (Coleman 1988, Nahapiet and Ghoshal,1998)
Important element in development of human capital(Coleman,1988))
Provide access to resources through network ties(Burt,1992)
Review
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Knowledge creation process in new venture strategy and performance
Tsai, Ming-Tien and Li, Yong-Hui
Journal of Business Research, 2007
Knowledge creation process is positively linked to firm performance.
Knowledge creation focus on SECI model.
PROCESSES OF KNOWLEDGE CREATION IN KNOWLEDGE-INTENSIVE FIRMS: A
COMPARATIVE STUDY BETWEEN BOSTON´S ROUTE 128 AND SPAIN
Pedro Lopez Saez, José Emilio Navas López, Gregorio Martín de Castro
Technovation,2008
Although theoretical models ( SECI ) of Knowledge creation are important ,context matters.
Each business context imposes important conditions on how process of knowledge creation is
structures in real firms
Knowledge creation is a dynamic process that required social constructionist approach.
Social Capital
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Social Interaction
Relationship Quality
Customer Network ties
Social Capital, Knowledge Acquisition, and Knowledge Exploitation in Young TechnologyBased Firms
Helena Yli-Renko, Erkko Autio and Harry J. Sapienza
Strategic Management Journal,2001
•Structural Dimension: Network ties, Network configuration, Appropriable
organization
•Cognitive Dimension: Shared codes and language, Shared narratives
•Relational Dimension: Trust, Norms, Obligations, Identification
Social capital, intellectual capital, and the organizational advantage. Academy of Management
J Nahapiet, S Ghoshal - The Academy of Management Review, 1998
High Technology Ventures
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Research intensity (ratio of R&D expenditures to sales);
Total R& D expenditures
Sales growth.
Number of scientific/technical types would be another indicator of a high
technology firm.
External sources ( the extent to which the venture uses strategic alliances,
acquisition, licensing agreements or outright purchase of technology).
The degree of radicality of innovation
Intellectual property (patents, copyrights, trademarks, or trade secrets)
THE FOUNDATIONS OF HIGH TECHNOLOGY START-UPS: THE WHO, WHERE, WHEN, AND WHY
Timothy M. Stearns, California State University, Fresno
Kathleen R. Allen, University of Southern California
Knowledge creation process
Socialization
Cooperative projects across directorates
The use of apprentices and mentors to transfer knowledge
Brainstorming retreats or camps
Employee rotation across areas
Externalization
A problem-solving system based on a technology like case-based reasoning
Groupware and other learn collaboration tools
Pointers to expertise
Modeling based on analogies and metaphors
Capture and transfer of experts' knowledge
Combination
Web-based access to data
Web pages
Databases
Repositories of information, best practices, and lessons learned
Internalization
On-the-job training
Learning by doing
Learning by observation
Knowledge creation process in new venture strategy and performance
Tsai, Ming-Tien and Li, Yong-Hui ,Journal of Business Research, 2007
Knowledge Exploitation
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Technological Distinctiveness
New product Development
Sales costs reduction
Social Capital, Knowledge Acquisition, and Knowledge Exploitation in Young TechnologyBased Firms
Helena Yli-Renko, Erkko Autio and Harry J. Sapienza
Strategic Management Journal,2001
New venture performance
Efficiency
Return on investment
Return on equity
Return on assets
Growth
Change in sales
Change in employees
Market share growth
Profit
Return on sales
Net profit margin
Gross profit margin
Knowledge creation process in new venture strategy and performance
Tsai, Ming-Tien and Li, Yong-Hui ,Journal of Business Research, 2007
• Thank You
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Identifying 'Super-Technology' Industries
Author: Medcof, John W.
Source: Research-Technology Management, Volume 42, Number 4, 1 July 1999 , pp. 31-36(6)
Publisher: Industrial Research Institute, Inc
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Market Networks and Corporate Behavior
Wayne E. Baker
The American Journal of Sociology (1990)
Social Capital positively Related to firm performance .
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High tech sectors
Aerospace technology
Biotechnology
Information technology
Nanotechnology
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Robotics
• Connor, K.R., 1991. A historical comparison of resource-based
theory and five schools of thought within industrial economics: do we
have a new theory of the firm?. J. Manage. 17, pp. 121–154.
• Deeds, D.L., DeCarolis, D. and Coombs, J.E., 1998. Firm-specific
resources and wealth creation in high-technology ventures:
evidence from newly public biotechnology firms. Entrep. Theory
Pract. 22 3, pp. 55–73.