Abstract
This paper offers a social capital explanation for the purported relationship between human capital investment and an organization’s innovation capability. We argue that social capital plays a mediating role in the relationship between the level of individual knowledge of employees and organizations’ innovation capabilities. The mediating mechanism is attributed to the role of social capital in knowledge exchange and combination that help enhance knowledge creation. Using survey data of 319 manufacturing firms in Korea, we conducted structural equation modeling (SEM) analysis to verify the mediating role of social capital in firms’ innovation performance. The results demonstrated that relational and cognitive dimensions of social capital are important mediators in realizing organizational innovation performance.
Highlights
What makes organizations innovative? The antecedents of organizational innovation are one of the most widely studied research topics among management scholars, as innovation is considered a core element for corporate growth and crucial for companies attaining sustainable competitive advantage [1,2,3,4,5]
We elaborated on how the different dimensions of social capital affect innovation and tested a detailed model of investment in human capital’s effects on corporate innovation performance
The results demonstrated that social capital is an important mediator in realizing organizational innovation performance
Summary
What makes organizations innovative? The antecedents of organizational innovation are one of the most widely studied research topics among management scholars, as innovation is considered a core element for corporate growth and crucial for companies attaining sustainable competitive advantage [1,2,3,4,5]. Innovation capability is understood as being closely tied to a firm’s ability to utilize its knowledge resources [1,2,6,7], and scholars have emphasized the role of individual manpower in the increase of innovation capability, in that the knowledge and skills brought into the firm by scientists and engineers can help firms innovate [7,8] In this regard, it has been popular for firms to bring in innovative geniuses who possess the required technical skills and expertise to enhance their innovative capabilities. Google Cafés, which are designed to encourage interactions between employees within and across teams, and to spark conversation about work as well as play [9], are a good example In line with this argument, previous research suggests that organizational innovation performance depends on an organizational culture or work practices that can foster innovation [10,11,12,13,14]
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