Professor of Entrepreneurship
Research on social capital has stressed the advantages that networks can bring to managers and other economic actors. The enthusiasm with this bright side of social capital, however, neglects the fact that social bonds may at times have detrimental effects for a manager. The authors try to correct this optimistic bias by looking at the dark side of social capital. Continuing benefits from social capital require that managers can adapt the composition of this social capital to the shifting demands of their task environment. This often implies the ability to create new ties while lessening the salience of some of the old bonds - if not severing them altogether. Available evidence, however, suggests that this ability may be encumbered by the same relationships purportedly responsible for the prior success of the manager. When and how this may happen are the central question the authors address in this paper. The authors argue that strong ties to cohesive contacts limit the managers ability to keep control on the composition of his network and jeopardize his adaptability to changing task environments. They test their ideas with data on managers operating in a special unit of a European high-technology firm.