Thriving on the knowledge of outsiders: Tapping organizational social capital

Abstract

Executive Overview Organizations are operating in increasingly complex worlds that require them to apply large amounts of knowledge to their activities. Because knowledge is continuously changing and evolving, most organizations cannot possess all required knowledge within their formal boundaries. Accordingly, they need to acquire large amounts of knowledge from outside the organization by tapping their linkages to external organizations and individuals. A variety of methods can be used to access knowledge that lies outside the organization's boundaries. Such methods vary from tapping the social networks of executives to more involved efforts such as alliances. The method used must be appropriate to the volume and kind of knowledge needed. However, benefiting from the knowledge of outsiders has several additional complexities, and executives need to prepare their organizations to take advantage of social capital. For instance, they need to ensure that the organization has an adequate level of knowledge in the areas to which it is importing knowledge so that it can understand and effectively use the new knowledge. They also need to ensure that they possess some unique proprietary knowledge within their boundaries. Additionally, as organizations develop their relationships with external entities, they need to continuously monitor the quality of knowledge derived from such sources; there is always the danger of such relationships becoming a liability without the organization being aware of it. This article details the various ways through which such pitfalls may be avoided.