Discussion: Social Business Applications

Discussion: Social Business Applications

Discussion: Social Business Applications

Most fi rms don ’ t really have a choice of creating competitive advantage by manipulating industry forces either through their use of information resources or IT‐enhanced activities. Yet, like Zara , they can leverage the IT resources they do have to create and sustain strategic value for their fi rms.

Strategic Alliances The value chain helps a fi rm focus on adding value to the areas of most value to its partners. The resource‐based view suggests adding value using externally oriented relationship skills. The Eras framework emphasizes the importance of collaborative partnerships and relationships. The increasing number of Web applications focused on collaboration and social networking only foreshadow even more emphasis on alliances. These relationships can take many forms, including joint ventures, joint projects, trade associations, buyer–supplier partnerships, or car- tels. Often such partnerships use information technologies to support strategic alliances and integrate data across

Social Business Lens: Social Capital A management theory that is gaining in popularity as a tool in understanding a social business is the social capital theory. Social capital is the sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit. Relationships associated with networks have the potential of being a valuable resource for businesses. The theory ’ s focus is not on managing individuals but on managing relationships.

The value from networks may be derived in one of three interrelated ways: structural, relational, and cognitive. The structural dimension is concerned with the pattern of relationships in the network—who is connected to whom. The relational dimension looks at the nature of relationships among members in the network (i.e., respect, friend- ship)—how the connected people interact. The third cognitive dimension looks at the way people think about things in the network, in particular whether they have a shared language, system of meanings or interpretations— how the connected people think. The unusual thing about social capital is that no one person owns it. Rather, the people in the relationship own it jointly. Thus, it can ’ t be traded easily, but it can be used to do certain things more easily. In particular, in social business applications, social capital may make it easier to get the information needed to perform a task or connect with certain key people. In IS development teams, social capital may improve the willingness and ability of team members to coordinate their tasks in completing a project.

Source: J. Nahapiet and S. Ghosal , “ Social Capital, Intellectual Capital and the Organizational Value , “ Academy of Management Review , 23 , no. 2 ( 1998 ), 242 – 66 .

12 For an excellent discussion of criticisms of the resource‐based view, see J. Kraaijenbrink , J‐C Spender , and A. J. Groen “ The Resource‐Based View: A Review and Assessment of Its Critiques ,” Journal of Management , 36 , no. 1 , ( 2010 ), 349 – 72 .

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