Understanding Organisational Social Capital Building Benefits

Among the primary concerns of any organisation are profit maximisation and employee satisfaction, and which have achieved through variety of means and outcomes. One path to ensuring organisations (including small and medium-sized enterprises-small and medium enterprises) not only increase its profit base, but also survive in a very competitive environment is to leverage on its internal resources (its people). Organisation comprises networks of people engaged to carry-out specific tasks and responsibilities. These responsibilities and tasks are executed within a negotiated framework, which involved formal (official relationships, organisational structures, job description, etc.) and informal (human social interactions, norms and culture) relationships. The informal relationships within the organizations have been accorded as ‘social capital’ by many scholars. These social interactions among the actors (Human resource personnel and employees) within organizational network has been established in academic literature to play crucial roles such as effective discharge of duties, employees moral and motivations, job satisfaction, commitment, and employees work life balance. However, there is paucity of knowledge in terms of what are the specific indicators for determine social capital building within an organisation. This paper reviewed literature on strategic human resources management, social capital, organisational behaviour, human resource practices in small and medium enterprises, organisational social capital and strategic management to give a robust understanding of social capital building in organisations, especially in small and medium enterprises, and how it can be stimulated through human resource practices and functions.