Social Capital

Firm’s environment is becoming more complex and dynamic, consequently continuous innovation is considered a key element to gain competitive advantage. According to the knowledge-based view, knowledge is considered the central element in the innovation process and its effective management is the key to achieve higher innovation performance. Since social networks involve knowledge and information embedded into inter-organizational network, social capital is considered the engine fuelling the innovation activities. Through an intensive review of the literature, the chapter seeks to uncover the effect of social capital on innovation through enhancing its fundamental knowledge-based activities. The social capital literature provided controversial approaches about its contribution to the innovation performance. The chapter contributes to the literature by mapping the different views, trying to clarify its contribution to the enhancement of knowledge-based activities, and revealing the effect of different social configurations on innovation outcomes. To do so, the chapter first analyzes the different views of social capital and explains its contribution within the organization studies. Further, the key role of the knowledge and its management to the innovation outcomes is discussed. Finally, the chapter clarifies the implications of social capital to the innovation performance and its typologies as radical or incremental ones, as well as designs a theoretical framework for recognizing both its beneficial and constraining effect. Further, the chapter proposes a balanced approach to the structural social capital reconciling two controversial camps in the literature.