Creating social and intellectual capital through IT career transitions
Introduction
The need for organizational innovation through information technology (IT) has never been greater as firms attempt to build flexible, extendable infrastructures to support new business models. The effective management of both social and intellectual capital has been proposed as a critical element of organizational flexibility and innovation (Rockart, 1988, Henderson, 1990, Ross, 1996). An ongoing challenge for organizations, however, is to develop effective social networks and IT knowledge throughout the organization (Nelson and Cooprider, 1996, Rockart, 1988, Reich and Benbasat, 2000).
Many organizations have attempted to raise the capability of business units to use IT for organizational advantage. A number of strategies have been developed, including renting (hiring consultants to work with business units), buying (hiring new employees to create IT units within business units), leasing (moving IT people temporarily into business units for a specific project or timeframe) and training (adding IT knowledge to existing business unit employees). Each of these approaches has its own strengths and weaknesses relating to social network and IT expertise creation. In this research, we explore another option-the option of moving employees from the IT department permanently into business units, into line positions such as administration, marketing, and customer service. A theoretical lens was used to investigate the effects of permanent moves of IT people into business units. We hope to create a framework that can be used by organizations wishing to adopt the IT-to-line strategy to raise their success using the information technology to transform their business.
This research uses a case study of Clarica Life Insurance Company1 to illustrate how the permanent transitions of IT professionals into non-IT business positions resulted in increases in intellectual and social capital, and through these changes, organizational advantage with IT. Our analysis of the case data draws upon the co-creation theory presented by Nahapiet and Ghoshal (1998) to illustrate the benefits that resulted from Clarica's IT-to-line career transitions. We also explore extensions to this model by illustrating key issues at Clarica important to initiating and sustaining the complex interplay of intellectual and social capital, so that organizational advantage could be achieved.
In the following sections we present a brief overview of theory, the research methods, and the career transitions at Clarica. Then the discussion, extensions to the theory, and conclusions are presented.
Section snippets
A theoretical lens
The theory (Nahapiet and Ghoshal, 1998) suggests that social capital creates the environment in which intellectual capital can be created, leading to organizational advantage and to further increases in social capital. In effect, they propose a self-sustaining spiral of social and intellectual capital. In the next section we briefly explore this theory, associated literature, and how they relate to information technology. The theory is pictorially represented in Fig. 1.
Research methods
Our data collection at Clarica focused on capturing the phenomenon of the IT-to-business career transfers and the outcomes. We began this study informally in 1991 with an initial interview with the Vice President of IT. We followed up with intensive interviews of key individuals in 1993 through 1996, with a set of matched surveys, and follow-up interviews. From that time to the present, we have regularly corresponded with Clarica to keep abreast of their activities. Appendix A provides
Career transitions at Clarica
In this section the story of career transitions of IT professionals at Clarica is told in two ways. First a summary of the transitions is presented, outlining the moves in aggregate and identifying some of the key reasons for the moves and their results. In the second part three profiles of individuals are presented, so that specific stories can be told.
Discussion
Nahapiet and Ghoshal's theory suggests that social capital, through the mechanisms of combination and exchange, creates intellectual capital, organizational advantage and further increases in social capital. This section applies this model, using the profiles, survey, and interview data from Clarica. These findings are shown on Fig. 2.
Extending the social capital model
Our analysis of the Clarica case provides support for the theoretical model proposed by Nahapiet and Ghoshal (1998) and its use as an interpretive lens. It also suggests two extensions to the model: 1) enablers of the initial levels of social capital, and 2) inhibiters of the social and intellectual capital spiral.
Fig. 3 illustrates this extended model. Since our data is exclusively from Clarica, we can speak only to their experiences for these model extensions.
Conclusions
There are two main contributions of this research. First, Nahapiet and Ghoshal (1998) theory is illustrated through a rich case study of IT career transitions at Clarica. Second, extensions to their theory are suggested by adding enabling and inhibiting elements.
Acknowledgements
We gratefully acknowledge the support of Professor Sid Huff, University of Victoria at Wellington, the financial grants provided by Hewlett Packard, the University of Richmond, and the Social Sciences and Humanities Research Council of Canada. We also thank Dorothy Leidner, our senior editor at JSIS, and the reviewers for their excellent guidance for revisions.
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