Social Capital and Trust

Firstly, what is social capital?

Wikipedia: Social capital is a form of economic and cultural capital in which social networks are central, transactions are marked by reciprocity, trust, and cooperation, and market agents produce goods and services not mainly for themselves, but for a common good.

There are also different types of social capital as described by Smith (2009):

  • Bonding social capital which denotes ties between people in similar situations, such as immediate family, close friends and neighbours.
  • Bridging social capital, which encompasses more distant ties of like persons, such as loose friendships and workmates.
  • Linking social capital, which reaches out to unlike people in dissimilar situations, such as those who are entirely outside of the community, thus enabling members to leverage a far wider range of resources than are available in the community. (Woolcock 2001: 13-4)

“Whereas physical capital refers to physical objects and human capital refers to the properties of individuals, social capital refers to connections among individuals – social networks and the norms of reciprocity and trustworthiness that arise from them.” (Putnam 2000).

Putnam’s central message is that “Interaction enables people to build communities, to commit themselves to each other, and to knit the social fabric.”

From a business perspective, fostering these connections/communities will contribute to employees positive feelings towards the employer/organisation and will encourage a sense of ownership and loyalty to the employer.

Social media has “… changed the ways in which business is conducted as well as how people interact with each other in many of their personal and professional dealings.” (Mello 2012).


Social Media is blurring the lines between personal and business. People are connected 24/7 and the expectation is that they can remain connected at all times, even while at work.  Millennials (also known as Generation Y, those born between the early 1980s to around 2000) in particular are going to expect to be able to use social media at work – it is an important part of their day to day behaviour to be connected with their friends online at all times – not being able to do so while at work could be interpreted as a lack of trust by the employer.

For older generations, the perception may be that the younger workers are wasting company time when they are checking their social media feeds etc. Management may use monitoring tools to evaluate the usage on company time. However as described by Mello (2012), this type of monitoring could have a negative impact on trust:

“Despite the justifications for employer monitoring, there can be a significant downside to this activity. Employees can often view electronic monitoring by employers as an invasion of their privacy which serves to erode any trust relationship which exists between employees and employers.  Eroded trust can have detrimental effects on employee morale, commitment, performance, retention and self-esteem.” (Mello 2012).

One solution could be employers having clearly defined policies in place that detail what is “acceptable usage” of social media on company time.  With social and digital becoming integrated into our day to day lives, employers need to be open to the fact that people will expect to have access to social media while at work.

Beyond these factors of trust between employers and employees, there is also the context of trust from a business perspective – it is important that a business is considered trustworthy by its customers (or potential customers).  As stated by Gefen et al., 2003, “trust may be at the heart of all relationships.”

Potential Issues of Social Media

The three main areas of potential concerns that are discussed about Social Media are:

  • safeguarding identity;
  • maintaining privacy; and
  • personal safety on the Web.

From a business perspective, having detailed procedures and policies in place would help to mitigate some of the potential risks.  Employers could also provide training/education around good practices for social media usage.


Kennedy, M. & Sakaguchi, T. (2009). Chapter XII Trust in social networking: Definitions from a global, culture viewpoint. In C. Romm-Livermore & K. Setzekorn. Social networking communities and e-dating services: Concepts and implications (pp. 225-238). Hershey, NY: Information Science Reference.

Mello, J. A. (2012). Social media, employee privacy and concerted activity: Brave new world or big brother? Labor Law Journal, 63 (3), 165-173, Retrieved from Business Source Complete Database

Smith, M. K. (2000-2009). ‘Social capital’, the encyclopedia of informal education. [ Retrieved: 25/04/2016].


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