Page 339 - Using MIS

Q3 How Do SMIS Increase Social Capital? 307

Franklin invented the public library, he would ask powerful strangers to lend him their expen-
sive books. In that same sense, organizations have learned that they can strengthen their rela-
tionships with you by asking you to do them a favor. When you provide that favor, it strengthens
your relationship with the organization.
Traditional capital depreciates. Machines wear out, factories get old, technology and com-
puters become obsolete, and so forth. Does social capital also depreciate? Do relationships
wear out from use? So far, the answer seems to be both yes and no.
Clearly, there are only so many favors you can ask of someone in power. And there are only
so many times a company can ask you to review a product, post pictures, or provide connections
to your friends. At some point, the relationship deteriorates due to overuse. So, yes, social capi-
tal can be spent.
However, frequent interactions strengthen relationships and hence increase social capital.
The more you interact with a company, the stronger your commitment and allegiance. But contin-
ued frequent interactions occur only when both parties see value in continuing the relationship.
Thus, at some point, the organization must provide you an incentive to continue to do it a favor.
So, social capital can be spent, but it can also be earned by adding something of value to the
interaction. If an organization can induce those in its relationships to provide more influence,
information, social credentials, or personal reinforcement, it has strengthened those relation-
ships. And, continuing a successful relationship over time substantially increases relationship
strength.

Using Social Networks to Connect to Those
with More Resources

The third measure of the value of social capital is the value of the resources controlled by those
in the relationships. An organization’s social capital is thus partly a function of the social capital
of those to whom it relates. The most visible measure is the number of relationships. Someone
with 1,000 loyal Twitter followers is usually more valuable than someone with 10. But the cal-
culation is more subtle than that; for example, if those 1,000 followers are college students and
if the organization’s product is adult diapers, then the value of the relationship to the followers
is low. A relationship with 10 Twitter followers who are in retirement homes would be more
valuable.
There is no formula for computing social capital, but the three factors would seem to be
more multiplicative than additive. Or, stated in other terms, the value of social capital is more in
the form of

Social Capital = Number of Relationships × Relationship Strength × Entity Resources
than in the form of
Social Capital = Number of Relationships + Relationship Strength + Entity Resources

Again, do not take these equations literally; take them in the sense of the multiplicative in-
teraction of the three factors.
This multiplicative nature of social capital means that a huge network of relationships with
people who have few resources may be of less value than a smaller network of relationships
with people who have substantial resources. Furthermore, those resources must be relevant to
the organization. Students with pocket change are relevant to Pizza Hut; they are irrelevant to a
BMW dealership.
This discussion brings us to the brink of social networking practice. Most organizations
today ignore the value of entity assets and simply try to connect to more people with stronger re-
lationships. This area is ripe for innovation. Data aggregators such as ChoicePoint and Acxiom
maintain detailed data about people worldwide. It would seem that such data could be used by
information systems to calculate the potential value of a relationship to a particular individual.