Trust, Social Capital and Organizational Effectiveness

Many authors have argued that social capital is positively related to economic prosperity, regional development, collective action, and democratic governance. But it alone can not explain all of these phenomena in societies. The concept of trust can not be neglected in the social capital literature. Considerable confusion exists concerning the relationship between social capital and trust, namely whether trust is a precondition of social capital or a product of it. This paper begins to explore their relationships by tracing the origins and development of the concept of social capital. It then discusses the relationship between social capital and trust by comparing their origins or sources. Finally, these two ideas are placed in organizational context to develop an analytical distinction between trust and social capital while clarifying and exploring the implications of these two primary perspectives on organizational effectiveness. The paper concludes that trust and social capital are mutually reinforcing -- social capital generates trusting relationships that in turn produce social capital.