Public Service Organizations: Social Networks and Social Capital

Abstract

There is evidence cited in the literature of a growing trend to network based styles of management, especially in high-technology or expert based organizations. For such network based organizations, the effective management of many external ties is a major invisible asset or form of social capital. It is unclear whether this social capital is owned by leading individuals or by organizations. The question of whether corporate forms of social capital can be created and sustained across the organization is in part an empirical one and not to be assumed through theory.

This chapter adds to the extant literature is two ways—first, by extending this form of analysis to public-service settings such as health care organizations and, second by providing recent qualitative empirical data. Public service organizations remain of substantial scale and significance in many OECD countries, and they need to be fully considered in the management literature.

Data are presented from U.K. health care organizations. An empirical study was undertaken of a set of health care purchasing organizations rated as ‘leading edge’ by peers. The data may not then reflect typical practice but rather as it is developing in an innovative form. A series of interviews and visits took place; full notes were taken and subject to contents analysis.

The study confirmed the importance of networks in health care management, so that the possession of rich ties was a key invisible asset in ‘getting the business done.’ The data does not confirm the conventional picture of total domination of professional networks as more managerial networks were also in evidence. Social capital belonged to individuals or autonomous groups at least as much as to the corporate organization, although there were instances cited of attempts to create more corporate forms of social capital.

However, the depth of the shift to network-based management can be questioned. The transition was only partial, recent in origin, and often mandated by the top. It is still premature to talk of a wholescale transition to network based management in health care, as managerial practice in health care in faddish and characterized by short life cycles.