Exploring Shared Understanding in Virtual Electronic Networks: The Role of Cognitive Social Capital

Recognition of the role played by social capital in the way in which entrepreneurs access resources and information has grown in recent years. Social capital refers to „productive potential‟ which is derived from relationships between actors (Coleman, 1988). According to Nahapiet and Ghoshal (1998) social capital has three distinct dimensions: structural, relational and cognitive. While the structural and relational dimensions are widely studied, cognitive social capital has received little attention from management academics. This paper illustrates the creation of cognitive social capital by examining the activities of a young, hightechnology entrepreneur who used two distinct forms of information technology to develop his business activities. The data demonstrates that different electronic communication tools (an issue tracker and a multi-media trading network) are very different in their potential for creating cognitive social capital and promoting entrepreneurial learning. The conceptual contribution made by this study is to demonstrate the importance of cognitive social capital in developing virtual communities of practice. Practical implications include the importance of entrepreneurs being encouraged to develop a more open and reflexive learning style which acknowledges the benefits of negative as well as positive experiences.