A Social Capital Theory of Management

Photo by Zainul Yasni on Unsplash

There are many different theories of management, and real life takes bits and pieces from each one. But few of them revolve specifically around the people who you’re working with — so, this theory serves to add on a social factor as well.

In the real world, we play social games for social capital. In other words, our interactions with others either boosts their relationship with us, or harms it. Optimally, we want all our relationships to have a positive outcome. 

Management works pretty similarly. You have a set of people below you, who you need to do certain tasks. If you interact with them positively, it boosts your relationship with them. If your relationship is positive, then they tend to go along more with what you ask them to do.

But management has another added effect that standard communication doesn’t. In management, you often have to cash out your social capital. Think about this — there’s just been a financial crisis, and your company needs to lay off some people to keep afloat. You layoff part of your team, and now the rest of the team is demoralized. However, the degree to which they are demoralized depends on their status with their manager. If they trust the manager well, then they’ll be more willing to ride out the storm than if they’re with a manager they despise.

This is what makes social capital so important in management: building up rapport with your employees builds a hedge against possible future demoralizing events. One last important thing here — you can’t fake social capital. The best way to follow the social capital theory is by genuinely caring about your employees. No shortcuts, no cheats, no life hacks. Give to them, and they’ll give back to you. 

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