Social Capital / Diversity Dilemma: The Impact of Racial Identity on Organizational Social Capital Development

The study of social capital in the context of organizations has gained considerable attention in recent years. The rise of the knowledge economy and therefore, the importance of the creation and sharing of tacit and explicit knowledge, have led to reconsider the importance of the social aspects in today’s knowledge intensive and extremely ‘diverse’ organizations.
Indeed, social interaction ties, trust and trustworthiness, and a common vision are fundamental determinants for combining and exchanging knowledge within any type of organization.
At the same time, however, considering that workplaces are becoming more diverse, bringing together people of different races, genders, ages and other socio-demographic attributes, organizations have the need to deal with issues such as, inter-group anxiety, miscommunication and distrust, which may in turn, hinder the leverage of the social facets previously identified.
Certainly, as this thesis later explains, a diverse workforce is an advantage that organizations cannot ignore if they want to remain competitive in domestic and global markets. However, diversity brings with it also new challenges that learning organizations need to consider if willing to harness social capital effectively for knowledge transfer and hence, organizational performance.

As a way to introduce the concept of diversity into a social capital framework, the following study attempts to describe and analyze the impact of diversity on the social capital dimensions within multicultural organizations.
More precisely, using data collected from multiple respondents of randomly sampled organizations operating in the municipality area of Tshwane (South Africa), this study identifies to what extent historically disadvantaged and advantaged racial identity groups social interact, trust each other and agree on a common vision within their companies.
Hence, the term ‘diversity’ as it is used here, is conceptualized in terms of differences of particular relevance to issues of identity, that is: race, gender, age, ethnicity/language, and so forth. This study has a particular concern with the racial attribute, due to the nature of the research sample used.
With the help of a self-administered questionnaire, many insights have been gained on this concern, confirming some previous assumptions in regard to social identity processes in the workplace.
In fact, as findings suggest, the structural and relational dimensions of social capital have revealed to be highly affected by differences in social category membership. Especially members pertaining to a specific racial identity group have demonstrated to establish a positive social identity, confirming affiliation and showing favoritism for members of their own social category, in effect, via ‘closure’ and self-segregation that disrupt group and interpersonal connection.

In general, the discussion presented here, will contribute to organizational social capital theory by adding new insights to this already fascinating topic. More specifically, it will support a recasting of ‘diversity’ issues in terms of the social capital determinants and will serve to gain a better understanding of the social processes that link the socio-demographic compositions of a diverse workforce.
Furthermore, it represents also an attempt to make a scientific contribution to the handling of problems of inter-group relations in South African organizations, serving as an example for other multicultural companies operating in this fierce and highly diverse global village.