Understanding social capital

Social capital is the invisible value in strong internal working relationships in the workplace. Social capital is based on three key concepts: Trust, fairness and cooperation.

Example: Short on staff due to sickness – but we'll manage

It’s the day before the big sale, and now both Gitte and Henrik are home sick with the flu. There’s so much to do before the sale starts, and the day is already busier than usual.

Luckily, there’s a good collaborative environment at the shop, and there’s a sense of trust that if you make an extra effort today, you’ll be appreciated and rewarded tomorrow. So, the employees distribute all the tasks amongst them and stay at work for an extra hour to get everything done.

After a long workday, the shop is ready for the big sale and there’s free pizza for everyone as a reward.

What is social capital?

Capital refers to the value of a company’s resources. For example, you break down the financial capital of a company into physical capital, in the form of properties, production equipment, etc., and human capital, i.e. employee training and experience.

Social capital is the invisible value of having strong, internal collaborative relationships at the shop. There is a clear relationship between a high level of social capital and:

  • High quality and productivity in day-to-day work
  • More ideas and knowledge sharing
  • Better performance of core tasks, i.e. to sell products to customers and give customers a good shopping experience
  • Increased wellbeing and job satisfaction.

Three key concepts

The three key concepts in social capital are trust, fairness, and collaborative skills/collaborative environment – often referred to as ‘the three diamonds’.

The three diamonds

  • Trust: You can count on each other. You trust what your colleagues and management say, and management trusts you, the employees,  to perform well on your own.
  • Fairness: Everyone at the company feels they are being treated fairly. This is not just about fair distribution of benefits; it’s also about fair and appropriate communication, processes, organisation, etc.
  • Collaborative skills/environment: Employees and management can work efficiently and effectively together on core tasks: selling products to customers and giving customers a good shopping experience.

Last revised at 04. July 2023