Towards understanding the roles of social capital in knowledge integration: A case study of a...

Information systems (IS) projects involving multipleorganizations are very common today. Knowledge inte-gration in such projects is a complex task of integratingdiverse knowledge bases across organizations that maypossess distinct strategic goals and even conflicting in-terests. Prior research has indicated that social capital, aresource based on social relationships, positively influ-ences knowledge integration and interorganizationalrelationships, but the exact nature of the interaction hasbeen unclear. Based on an in-depth case study, thisarticle examines a four-organization (three clients andone IT service provider) collaborative IS project whereinthe clients were business partners for 7 years when theyembarked on the project. The study explicitly identifiesthe roles through which social capital can be leveragedfor knowledge integration in a collaborative IS project.Findings suggest that social capital can be leveragedas a motivator, an integrator, and a facilitator during thevarious stages of a collaborative IS project.

Introduction

It is not uncommon today to see information systems (IS)projects involving multiple organizations, for a multitude ofreasons, including increasing complexity of the projectsrequiring specialized knowledge bases that do not exist inone organization. The simplest of such projects may involveone client and one IT service provider, but more complexarrangements could involve multiple clients and multiple ITservice providers. These multiorganizational IS projects arereferred to as collaborative IS projects in this article, sincethe organizations collaborate for the project for a certainperiod of time. Collaborative IS projects as construed in thisarticle also incorporates those IS projects that are embarkedon by collaborating partners.

Apart from the challenges inherent in IS projects (scopecreep, team issues, budget overruns, escalation), collabora-tive IS projects face an additional challenge of integratingdisparate knowledge across organizational boundaries.Indeed, managing the process through which knowledge forthe projects is acquired, shared, and integrated between theorganizations involved is a crucial task (Walz, Elam, &Curtis, 1993), since knowledge is often dispersed, differenti-ated, and embedded in different entities across the collabo-rating organizations (Tsoukas, 1996; Pan, Newell, Huang, &Cheung, 2001; Devadoss, Pan, & Singh, 2005). Addition-ally, in collaborative projects, the participating organizationsmay differ in physical characteristics (operations, business,and size) and social traits (culture and priorities), and maypossess diverse competencies (Pisano, 1994; Levina, 2005)and hence conflicting interests.

Time and again, the importance of social capital (Adler &Kwon, 2002; Walker, Kogut, & Shan, 1997; Nahapiet &Ghoshal, 1998) has been emphasized for knowledge integra-tion (e.g., see Huang, Newell, & Pan, 2001; Pan et al., 2001)and for managing interorganizational relationships (e.g., seeLiebeskind, Amalya, Lynne, & Brewer, 1996; Kale, Singh,& Perlmutter, 2000). Social capital is a resource, based onsocial relationships, that inheres in structures such as organi-zations and organizational networks. It can manifest itself invarious forms such as trust, norms, cooperation, informationbenefits, and power (Adler & Kwon, 2002). In organiza-tional networks social capital can curb opportunistic behav-ior of partners, and reduces the time required to reachconsensus. It aids knowledge integration by developingcohesion within the structure and by aligning the differentstakeholders to the collective’s goal (Huang et al., 2001;Swan, 2001). Despite the indication from prior research ofthe potential role of social capital in collaborative IS pro-jects, the specifics are largely elusive. This study attempts toexplicate the specific roles through which social capital canbe leveraged to integrate knowledge in a collaborative ISproject. The objective of the study is accomplished througha case study of a collaborative IS project embarked upon by

JOURNAL OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE AND TECHNOLOGY, 58(2):263–274, 2007

Towards Understanding the Roles of Social Capital inKnowledge Integration: A Case Study of a CollaborativeInformation Systems Project

Mamata Bhandar, Shan-Ling Pan, and Bernard C.Y. TanNational University of Singapore, 3, Science Drive 2, Singapore 117543.E-mail: {mamatab, pansl, btan}@comp.nus.edu.sg

Received December 31, 2005; revised February 20, 2006; acceptedFebruary 20, 2006

© 2006 Wiley Periodicals, Inc. • Published online 1 December 2006 inWiley InterScience (www.interscience.wiley.com). DOI: 10.1002/asi.20493

264 JOURNAL OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE AND TECHNOLOGY—January 15, 2007DOI: 10.1002/asi

three organizations that were logistics partners for sevenyears through an IT supply chain integrator. The extremelydiverse profiles of the collaborating organizations, and thepotential social capital among them owing to their long-termassociation, makes this an interesting case for the study.

Theoretical Foundation

Knowledge Integration in Collaborative IS Projects

Knowledge integration has been viewed as a mechanismof applying knowledge (Grant, 1996) or as the synthesis ofdisparate specialized knowledge into situation-specific sys-temic knowledge (Alavi & Tiwana, 2002). Adopting aprocess view, Huang et al. (2001) define knowledge integra-tion as an ongoing collective process of constructing, articu-lating, and redefining shared beliefs through the socialinteraction of organizational members, and identify keyknowledge integration processes: boundary penetration, par-adigm expansion, and organizational memory reconfiguring.This study furthers the process perspective and conceptual-izes knowledge integration as the process of combining,applying, and assimilating disparate specialized knowledge.From this view, a collaborative IS project can be construedas a knowledge integration process since it requires knowl-edge across organizations to be combined and applied todevelop and implement the system, and the system needsto be assimilated by the affected organizations, in terms ofchanged work processes or reconfigured organizationalmemory (Huang et al., 2001). Knowledge integration incollaborative IS projects therefore extends beyond organiza-tional boundaries and is achieved through continuous inter-action between the organizational representatives (e.g.,meetings, discussions) within the project structure (e.g., pro-cedures, guidelines, project deliverables), and comprisesseveral activities that lead to the different project-relatedoutcomes. The activities start from the time of conception ofthe project idea to the project launch. For example, achiev-ing buy-in, system design, and requirement gathering areconsidered knowledge integration activities. KI (KnowledgeIntegration) as construed here requires the buy-in of all col-laborating organizations so they can contribute requisiteknowledge for the project.

Although essential, the process of knowledge integrationin a collaborative IS project involves the challenge of inte-grating cross-functional knowledge (e.g., business processknowledge and software knowledge for software implemen-tation) and knowledge that is often dispersed, differentiated,and embedded (Grant, 1996; Pan et al., 2001) in differententities. According to Grant (1996), knowledge integrationin organizations may be considered as a “hierarchy of inte-gration.” At higher levels of the hierarchy, a broader spanof specialized knowledge is integrated (cross-functionalknowledge) and at lower levels of knowledge integration,one kind of specific knowledge is integrated across individ-uals and groups (Okhuysen & Eisenhardt, 2002). At higherlevels of knowledge integration, multiple areas of specific

knowledge need to be synthesized either to produce newknowledge or to create value through knowledge application(Demsetz, 1991; Nahapiet & Ghoshal, 1998; Carlile &Rebentisch, 2003). Knowledge integration is most complexwhen a wider span of knowledge is being integrated (Grant,1996). This is typically the case in collaborative IS projectssince they involve integration of at least software knowledgeand functional knowledge (e.g., manufacturing, logistics,finance). As Levina (2005) points out, despite the high po-tential for innovative outcomes when multiple experts arebrought to work on a project, there is even greater potentialfor conflicts if they come from different organizations.

Knowledge integration in collaborative IS projects is alsoplagued by the fact that organizational representatives mayconstantly be trying to balance their own organization’s in-terests with that of the collaboration’s goals, which mightmake them guarded in contributing requisite knowledge tothe project. There may also be conflicting interests betweenthem (Levina, 2005; Choudhury & Sabherwal, 2003) whichcan affect their contribution to the project. For instance, in aclient-IT service provider relationship, the client may try tosqueeze in more and more requirements and the IT serviceprovider may try to charge for every small modification.Such conflicts, although healthy from each organization’sperspective, may stifle the process of knowledge integration.How then can knowledge integration be achieved in collab-orative IS projects? Many prior studies indicates the positiveinfluences of social capital on knowledge integration (Panet al., 2001, Huang et al., 2001, Huang & Newell, 2003) andin maintaining and building interorganizational relationships(Liebeskind et al., 1996; Kale et al., 2000, Walker et al.,1997).

Social Capital

Social capital is an asset that resides in social relation-ships (Walker et al., 1997) and that exists or emerges insocial structures (like projects, organizations, and organiza-tional networks) through interaction between members(Adler & Kwon, 2002). In the context of knowledge and or-ganizations, Nahapiet and Ghoshal (1998) define social cap-ital as the resource embedded within, available through, andderived from the network of relationships possessed by anindividual or social unit. It is called a resource or assetbecause by manifesting itself in forms such as trust, norms,information benefits, and power, it can be beneficial to thestructure and its members. For instance, in an interorganiza-tional network where the collaborating organizations haveworked together for a long time, certain conflicts are re-solved based on their social relationships developed over theyears, and all issues do not necessarily require formal con-tracts or legal clauses for resolution. Not only can socialcapital help resolve conflicts between collaborating organi-zations, it can also enhance the knowledge integrationprocess by developing cohesion within the structure, align-ing stakeholders to the collective’s goal and reducing thetime and effort associated with developing an agreement in

JOURNAL OF THE AMERICAN SOCIETY FOR INFORMATION SCIENCE AND TECHNOLOGY—January 15, 2007 265DOI: 10.1002/asi

the network (Coleman, 1988; Huang et al., 2001; Pan et al.,2001). For example, when social capital manifests itself astrust in a general sense, it can assure organizational membersthat the knowledge they contribute to the project will not bemisused.

Although the above discussion suggests that social capi-tal can influence knowledge integration in collaborative ISprojects, there exist numerous views of social capital, and ithas been applied in varied contexts (e.g., organizations,human resource management, economics, nations, and com-munities) with different conceptualizations (Adler & Kwon,2002). Inkpen and Tsang (2005) suggest the need to examinesocial capital independently in different contexts and illus-trate how its effect on knowledge transfer differs in differentnetwork types. Adler and Kwon (2002) summarized thevarious views, and put forth a schema that suggests that forsocial capital to exist in a structure three sources need tobe present: opportunity, motivation, and ability (OMA). Inother words, for social capital to exist in a structure, themembers need to have an opportunity to engage in socialcapital transactions, should be motivated to engage in socialcapital transactions, and must possess the ability to engagein social capital transactions. Based on the OMA schema,then, we define social capital for this study as the resourcethat emerges in a structure due to the presence of OMA ofparticipating members, and that facilitates action towardsthe goal of the structure. Social capital in this sense canmanifest itself in the form of trust, cooperation, obligations,power, collective identity, and so forth.

Social Capital in Collaborative IS Projects: The OMA View

The OMA schema was used to conceptualize social cap-ital for this study since it affords an understanding on howthe presence or absence of OMA among organizations couldinfluence knowledge integration in a collaborative IS pro-ject. It also helps bring out the interorganizational dynamics(e.g., organizational motivation) in the context of collabo-rative IS projects by allowing analysis from the perspectiveof each organization, and hence allows the explanation ofeach of their actions in common terms. The followingparagraph discusses OMA in the context of collaborative ISprojects.

Opportunity (O) reflects the accessibility of social capitaltransactions. In a collaborative IS project, for instance, theproject serves as an opportunity for organizations to ex-change favors. The project also provides an opportunity forsocial relationships/ties to develop between the organiza-tions, and this fosters the development of social capital. Aclient and a vendor working on project for a long period oftime may make minor compromises on certain issues due totheir long-term relationship. This is similar to Grant’s (1996)proposition that the firm, with its members and their socialrelationships, provides a structure and hence an opportunityfor knowledge integration.

Motivation (M) reflects the enticements organizations in-volved in a collaborative IS project have to be part of the

project and hence to contribute to the knowledge integrationprocess. Unlike Adler and Kwon’s (2002) suggestion thatmotivation comes from trust within the structure, consider-ing the organizational context of a collaborative IS project,motivation may also depend on factors such as perception ofbenefits from the project and perception of effort and costsinvolved. If an organization stands to benefit from the pro-ject through reduced costs, increased efficiency, or otherpositive outcomes, it is motivated and hence may cooperatewith others for the completion of the project.

Ability (A) is construed as the competencies and re-sources that organizations need to possess to contribute andcomprehend requisite knowledge. Ability, as suggested bythe works of Nahapiet and Ghoshal (1998) and Adler andKwon (2002), comes from resources and competencies thatthe members posses, shared jargon that they may have thatmakes it easier for them to comprehend each other’s require-ments, and hence help each other, and through sharedbeliefs. In the current context, ability may arise from thehuman and monetary resources that each organization hasfor the collaborative project, and also from their ability tounderstand the technology and hence contribute to theprocess of knowledge integration.

The above discussion of O, M, A in the context of col-laborative IS projects suggests that absence or presence ofOMA and hence social capital can influence knowledgeintegration in the project by affecting organizations’ behav-ior. Social capital can also have risks and is not alwaysbeneficial (Adler & Kwon, 2002). However, for the scopeof this study the negative effects of social capital were notconsidered.

The discussion so far suggests the likely importance ofsocial capital on knowledge integration in a collaborative ISproject, and hence we propose to unearth the specific rolesthrough which social capital influences knowledge integra-tion in a collaborative IS project. To do so we adopt the viewof social capital as the resource that exists or emerges in astructure due to the presence of OMA in the collaborating or-ganizations, and that facilitates action towards the goal ofthe structure. This view permits us to analyze how the ab-sence or presence of OMA in each collaborating organiza-tion affected knowledge integration in the project, and thushelps us answer the question as to how (through what roles)social capital influenced knowledge integration in the col-laborative project. If social capital, a naturally occurringresource, can be beneficially leveraged for collaborative ISprojects, knowledge of the details of this process will indeedbe a valuable contribution to research and practice. With thismotivation, this study explicates the various roles throughwhich social capital can be leveraged in collaborative ISprojects and the contingencies of its effects.

The following paragraph discusses the research method-ology and is followed by a description of the case. The vari-ous roles through which social capital can be leveraged andthe contingency of social capital effect as drawn from theanalysis are then discussed with their implications and futureresearch opportunities.


Research Methodology

Using the case research strategy, this study examines acollaborative IS project involving four organizations. Thecase study method was chosen to cover contextual condi-tions that might be pertinent to the phenomenon of study(Yin, 2003). Four types of data were collected over a periodof six months, four months after the collaborative projectwent live.

Semistructured, face-to-face interviews were the primarysource of data. They lasted for 60 minutes on average, andwere conducted with representatives from each organiza-tion, holding different roles and at different hierarchieswithin the project team. This was done to obtain a variety ofviews as well as to confirm the facts provided by each withthe partnering organizations. Details on the interviewees arepresented in Table 1. Questions asked were open ended toprovide ample scope for participants to express their ideas.Interviews were tape-recorded with the participants’ permis-sion in consideration of the reporting media, and the tapedinterviews were transcribed as soon as possible, with the au-thor’s notes, observations and other information, to enrichthe interviews (Walsham, 1995).

Documents related to the project were collected and usedas secondary evidence. These included written reports,newspaper articles, trade study reports, e-mails, minutes ofmeetings, project-related documents, and communications.On-site observations were made during site visits and planttours of all organizations. Physical artifacts such as officeequipment and computers, and the interaction patternsamongst the employees of various levels in their social set-tings, were noted. The general manager and account managerfrom the IT service provider acted as key informants (Glesne1999) for this study. Their views of the relationships betweenthe logistics partners served as a source of data, and helpedus understand the background of the interviewees prior tothe interviews. These individuals also assisted in openingdoors to the rest of the organizations, and coordinated our

interviews with them. The multiple sources of evidence wereessential to verify facts provided by the interviewees. Forinstance, when one organization spoke of the lack of IT com-petence of another, it was verified by observation of physicalartifacts (number of computers), from comments from otherorganizations, and through background information on theorganization about their IT adoption.

The objective of the data analysis was to identify rolesthrough which social capital influenced knowledge integra-tion in the collaborative IS project. Data collection andanalysis was iterative as suggested by Walsham (1995). Forinstance, after each interview preliminary analysis was con-ducted and new themes, concepts, or activities that emergedwere explored in subsequent interviews.

From all the data collected, key knowledge integrationactivities were identified and categorized into three chrono-logical phases, following a time-ordered matrix (Miles &Huberman, 1994). The three phases identified were Nego-tiations and Planning, Design and Implementation, andPostimplementation (see discussion of the case below),based on nature and time of occurrence of the knowledge in-tegration activities. Activities that contributed to the processof knowledge integration, as defined in the theoretical dis-cussion above, were chosen as knowledge integration activ-ities. For instance, “convincing service providers” was cho-sen as a knowledge integration activity since it required theIT firm to combine their knowledge of the software, the lo-gistics, and the attitude of SMEs (Small and Medium-sizedEnterprises) in general, and apply this knowledge to createvalue propositions. For each phase the absence or presenceof OMA in each organization and the consequent effect onknowledge integration in the project was analyzed using atheme-ordered matrix (Miles & Huberman, 1994) over theinitial time-ordered matrix. Based on the absence/presenceof social capital during each phase and the consequent effecton the activities of that phase, the dominating role of socialcapital for each phase was elicited as was our objective.

TABLE 1. Interview details.

Organization Interviewees (number of interviews) Interview background

ChemXlog (XL) General manager (3), Account manager (2), XL was the lead to the case and these interviews were semiformal Business development manager (3), and long. Data included e-mail exchanges and phone calls for IT manager (1) clarifications. They provided a third party perspective on the

relationships between the partners, on the project procedures,management, IT capability of the partners, etc.

Manufacturer (MF) Logistics manager, Project manager The logistics manager provided data on reasons for initiating the for this project (1), Shipping project and for selecting XL as the IT vendor, and on the inter-manager (1), Shipping supervisor (1), departmental communications and interorganizational Warehouse manager (1), Warehouse communication. The other department managers provided data onsupervisor (1) system adoption, their involvement in the project, and on the issues

with system adoption by the partners.Freight Forwarder (FF) Director (1), Operations officer (2) The director talked about their lack of motivation for the project and

how/why they agreed. The operations officer spoke about the system,meetings, and, mainly, on their problems in updating the system

Hauler (HU) Director (1), Supervisors (2) The director talked about their lack of motivation for the project andhow/why they agreed. The supervisors spoke about the system,meetings, and, mainly, on their problems in updating the system


The Case—A Collaborative IS Project InvolvingFour Organizations

Case Background

The project involved the design and implementation of aWeb-based collaborative supply chain platform by a supplychain integrator, ChemXlog Pte Ltd. (XL), for a three-partner logistics community to carry out their logisticsactivities (e.g., order management, shipment tracking, anddocument exchange). The three logistics partners had beenbusiness partners for seven years when the idea of a Web-based system was introduced. Each of the partners wasbased in Singapore, but differed significantly in terms of na-ture of the business, size (number of employees and annualturnover), extent of IT usage, and attitude towards IT. One ofthem was a manufacturing firm (MF) and the other two wereits logistics service providers, a freight forwarder (FF) and ahauler (HU). FF coordinates shipping and hauler services fortheir clients, and HU provides the trucks for moving ship-ping containers to and from the port. The diverse back-ground of these organizations is summarized in Table 2.

The logistics partners had good working relationshipswith each other. In fact, the director of HU maintained thatthe logistics business is all about trust and that it is very im-portant to have good working relationships with partnerssince you trust the other party with goods worth millions ofdollars. What adds credibility to this statement is the fact re-vealed by XL’s business development manager, “ActuallyMF’s shipment is executed by a company called CentralExpress. FF is only playing the middleman. MF refuses to goto Central Express direct because they treasure goodwillwith FF.” The nature of their business demanded extensiveinteraction on a day-to-day basis, over telephones andthrough faxes and meetings. Although none of the logisticspartners indicated any interorganizational issues in the logis-tics operations, MF had several internal inefficiencies rang-ing from interdepartmental miscommunications, manualoperations documents getting lost, and extra payments beingmade at the port for delayed pick-up, and so wished to

streamline their processes. Their logistics manager gaveinstances of the internal issues they faced:

They just bring us the containers and on the container doorthey put a slip that’ll have the information: sales order, des-tination point . . . So as you can see, it’s very manual. If youidentify the wrong batch of goods, you’ve got a big problem.People were denying having received instructions andblamed that as a reason for delays and mistakes which iscommon in warehouse communications.

MF also believed in going paperless and moving awayfrom traditional operations using fax and phones. Their con-victions on this issue, and internal operational inefficiencies,led them to bring in XL to provide a Web-based collabora-tive platform so that they could conduct business with theirlogistics partners online.

The Collaborative Project

The implementation of the collaborative platformspanned over a year. For clarity of data presentation andanalysis the project is categorized into three chronologicalphases: Negotiations and Planning, Design and Implementa-tion, and Postimplementation. The phases were determinedbased on the nature of activities predominant in that phase.For instance, in the first phase, the most important tasks weregetting the buy-in from the service providers, cost negotia-tions, and project planning, and hence this phase was calledthe Negotiations and Planning phase. The goals of eachof the phases are listed in Table 3.

Phase 1: Negotiations and Planning

XL was introduced to the service providers (HU and FF)by MF with the onus of convincing them to accede to thesystem. The task was difficult, given that the two serviceproviders were cost-conscious traditional firms with limitedIT awareness. MF’s shipping manager revealed, “HU isbackward in terms of IT adoption; they have only one e-mail

TABLE 2. Background of the collaborating organizations.

Collaborating partners Background and nature of business Use of IT prior to the project

Supply-Chain integrator, Small IT firm that develops and implements HighChemXlog Pte Ltd. (XL) collaborative logistics solutions for private

communities. The parent company is amajor logistics company.

Manufacturer (MF) One of the manufacturing facilities of a High. Use legacy systemsJapanese MNC. It employs 150 people and had experience with aand is a major client for the two logistics JDEdwards systemservice providers.

Freight Forwarder (FF) A small firm, incorporated in 1995, with Minimal. Accounting packageannual turnover of $1.5m. Coordinate and e-mailwith haulers for servicing clients’logistics activities.

Hauler (HU) A small firm, founded in 1987, with annual Minimal. Only for wordturnover of S$6m. Owns a fleet of trucks processing and e-mailand containers that are coordinated manually.


TABLE 3. Milestones for each phase.

Phase Goals

Negotiations and Planning Achieving buy-in of all organizations forphase the project, high-level requirements

gathering, negotiating projectcost distribution, project planning

Design and Implementation Detailed requirements gathering throughphase prototype building and refinement.

System implementation Postimplementation phase User training, getting users to adopt the

system, reconfiguring work practices, and continuous system review

address for the whole company.” FF’s director confessed,“Computers stuff? I am not good at that.” Their limitedawareness and complacency with the current state of opera-tions led to a resistance to change. XL’s account managercomments on their attitude:

They [service providers] do not want to change the way theydo things. Even for their scheduling operations, they do notwant to improve on their processes. Some of them have theire-mails printed out for them, they don’t even want to meddlewith the system to check e-mails. They’re not receptive tochange.

Their low readiness to buy-in was exacerbated by the factthat the system entailed additional work and costs for them.They would have to follow the manual process for theirother clients and use the system just for this client. FF’sdirector revealed their impression of the situation, saying,“I don’t see any benefits from the system; in fact, it is addi-tional work for us. Our only motivation was that it was therequest of our major client.” HU’s director echoed thesefeelings:

For us, we don’t see the savings today. It is more of incurringextra expenditure. The cost of employing such a large-scalesystem is quite exorbitant for my (company) size. At thistime, it only means extra cost and extra man-hours.

He further went on to summarize each of their distinctperceptions for and against the system, which created ten-sion between them:

The basic directions are quite different. XL is very eager tosolicit business, trying to put everybody on board the sys-tem. FF’s basic attitude and direction are just like ours. Wedon’t see immediate benefits or savings. On the contrary, weincur more expenditure, manpower, and work. So we are ac-tually trying to bring each other down. They say, “Pleasecome on board,” and we say, “Please give us more savings.”Of course there will be some argument and some conflicts interms of charges.

Achieving the buy-in of the service providers was noteasy. It took three months of meetings, presentations, and a

detailed feasibility study that quantified and qualified thevalue propositions before they agreed. XL also went througha rigorous process and got them a grant from the Singaporegovernment that helps SME’s pay for such projects. Thiswas important because MF insisted that the serviceproviders share the costs for implementing the system andthe service providers claimed they had limited resources tospare. To achieve the buy-in, XL also tried to build good re-lationships with them, as their business development man-ager said: “For marketing purposes, the first few meetings,we don’t just talk about business. We want to make themcomfortable, make sure we enjoy each others’ company andbuild relationships.” The service providers confided thatthey acceded to the system partly due to their vulnerablestrategic position, considering MF was a major client; partlyto maintain good working relationships with the partners;and largely with the hope of having long-term business fromMF. FF’s director said, “Linking up with MF [through thesystem] locks us in a long-term relationship.”

Phase 2: Design and Implementation

After obtaining consent from the service providers, thepartners assigned representatives for the project team. Therepresentatives were to communicate requirements to XLand coordinate with them to design GUIs (Graphical UserInterfaces) and workflows for the system. XL built a proto-type of their solution with the minimum requirements givenby all the partners. They then constantly refined the proto-type by adding requirements to it through constant iterationsof building and requirement gathering over several collec-tive meetings.

The Design and Implementation phase lasted for aboutsix months and as is obvious from the process there wasabundant interorganizational interaction to design the GUIsand workflows for the system. Each organization wanted thetransition from the current manual system to the online sys-tem to be as smooth as possible, and tried to bargain for aGUI suiting them, thus resulting in conflicts. XL’s IT man-ager confirmed:

We had problems, like one side wants validation, the otherparty doesn’t think it’s the standard practice, and so on. Butthey had no problems when it came to IT. The only issueswere ironing out details like what fields to include, sincethere’s no one fixed business rule.

Although they needed some moderation from XL toresolve conflicts, the partners were cooperative in resolvingissues amongst themselves, and they also exhibited a con-sideration for the others’ requirements. A user from FF veryunderstandingly stated, “Some may want to see more infor-mation and some may think the less I see, the fewer the prob-lems. I can understand.”

The process required each of the logistics partners tounderstand the questions posed by XL and also to be ableto chart workflows of their business processes, since these


would be built into the system. In terms of understandingeach other’s domain knowledge and interacting with XL forstating requirements, this stage was surprisingly smooth de-spite the diverse functional backgrounds of the organiza-tions. XL’s background in logistics was helpful, as noted byMF’s logistics manager: “They are indeed very well versedwith logistics.” XL’s General Manager proudly said, “We dohave people behind us with the strong logistics backgroundthat we can leverage for understanding the logistics’ busi-ness processes needed for developing the software.”

Issues of trust had to be considered for this phase sinceit involved sharing business information. Although MFhad signed a nondisclosure agreement with XL, the serviceproviders had not signed any formal documents. This wasdespite the fact that XL’s parent company was a competitorfor the logistics service providers. HU’s director said, “They[XL] promised us they wouldn’t disclose anything and wetrust them. Yeah, I think that’s ethics.”

Phase 3: Postimplementation

The project was launched a year after its inception. MFacknowledged the benefits of the system; one comment wasmade relating to the warehouse communication problems:

The system actually made everything clearer. Previouslythere would be problems of someone sending a documentand the receiver could claim that he didn’t receive it. Now, itis all in the system and is much easier to track. We even re-sorted to making each other sign for documents received,though we are just sitting a partition away! It was so ridicu-lous! But now, we can make updates and everyone involvedcan see the changes. We do not have to make multiple copiesfor distribution.

They also took necessary steps to reconfigure their workpractices as a result of the system. They merged two depart-ments and trained even their forklift drivers to use thesystem.

The service providers were pleased with the system andsaid they felt locked in a long-term relationship with MF.Nevertheless there were some issues in their adoption of thesystem. There were delays in updating the system; MF’swarehouse manager had to remind them to update the sys-tem, but at the same time was understanding: “They [HU]are haulers and don’t just do our business, and not all theircustomers use this system, it’s just us. So updating the sys-tem is out of their normal business procedures.”

Users at the service providers had difficulty logging in tothe system and also complained of the system being tooslow. Despite these issues, they said the system was easy touse and that they would get used to it. Even HU’s directorsaid, “It’s a matter of getting used to it after a while. Theupdating is quite simple.”

The logistics partners set up a review committee to ad-dress progressive issues in the system and to discuss furtherdevelopment of the project. The review committee metonce in two months and comprised core users and project

managers from the three logistics partners. The users couldshare their issues with the system with the review commit-tee. Not all technical issues relating to the system wereraised. Users raised a few technical issues with the system toXL, mainly relating to the speed of the system, but did notreveal all because they didn’t wish to disrupt the community,as one user from FF said:

We did mention some issues about the system being slow,etc., that would be important for all. As for the otherchanges, we didn’t raise them, since everybody seems finewith the arrangement now. We do not want to disrupt them.

XL did their part in helping users transition to the newsystem:

In the end, the ground users are the ones using the system. Ifthey don’t use it correctly, or if they don’t use it at all, thenthe system becomes irrelevant. So we still need to rally thesupport from the lower layers. We built relationships withthe ground users, talked to them, got to know them person-ally, even bought them pastries [laughs].

The data presented in the above paragraphs describe thebackground and prior relationships of the four organizationsthat embarked on the collaborative project, followed by adescription of the different phases, their key activities, themajor issues, and the behavior of the organizations.

Analysis and Discussion

The goal of this study was to explicate the roles played bysocial capital in integrating knowledge in a collaborative ISproject. The objective was realized through an OMAanalysis, summarized in Table 4. In this table, for eachphase, the absence or presence of OMA and hence socialcapital (as construed in the OMA schema as discussed in theTheoretical Foundation section) for each organization wasinterpreted (column 3). Column 4 shows the effect ofabsence/presence of OMA, and hence social capital, on thecollaborative IS project. The main role of social capital dur-ing each of the phases is elicited based on the consequenteffects of the absence/presence of social capital (as OMA)on the key tasks. Some evidence for the interpretation isprovided in column 5. The OMA analysis reveals three rolesthrough which social capital can be leveraged in collabora-tive IS projects: motivator, integrator, and facilitator. Thekey lessons learnt are discussed below.

The Motivating Role of Social Capital During the InitialStages of a Collaborative IS Project

The first finding of this study is that social capital duringthe initial phase of the project should be leveraged as a mo-tivator. In Phase 1 of the project, the key activity was to getthe buy-in of the three logistics partners for which each ofthem had to have significant motivation for the project. MF’smotivation was strong since they needed the system to


TABLE 4. Phase-by-phase analysis with key evidence.

Absence/Presence ofKnowledge OMA (opportunity, Effect on project Evidence (key quotes)integration motivation, and ability) and main role of of absence/presence

Phase activities and hence social capital social capital of social capital

Prior to the • Business • All three partners had sufficient • Good working • “Actually MF’s shipment is project interaction OMA. relationships executed by a company called

• Partnership provided the and seven years Central Express. FF is only playing opportunity of partnership the middleman. MF refuses to go

• Need for business provided the to Central Express direct because motivation they treasure goodwill with FF.”

• All had ability to provide the • “We had good working requisite service, reflected by relationships.”seven years of partnership.

Phase 1 • Achieving • XL had strong motivation • Increased time taken • “People were denying having buy-in (business) so created ties to get buy-in of service received instructions and blamed

• Cost negotiations • MF had strong motivation (needed providers despite prior that as a reason for delays and • Project planning system to reduce inefficiencies) and relationships mistakes which is common in

were willing to invest in the required • MOTIVATOR for warehouse communications.”ability (resources). buy-in • “I don’t see any benefits from

• Service providers had no motivation the system; in fact, it is (did not need the system and incurred additional work for us. Our extra costs) and had minimum ability only motivation was that it(IT savvy resources, infrastructure, was the request of our money) required for the project. major client.”

Phase 2 • Requirements • XL had strong ability (logistics • Smooth progress of • “Some may want to see moregathering domain knowledge and IT phase information and some may

• Prototype knowledge). • Reached consensus on think the less I see, the fewerbuilding and • All three partners were strong in GUIs and workflows theproblemswhichIcanunderstand.”refining their own domain knowledge, easily

hence had ability. • INTEGRATOR of • Their long term association made diverse knowledge

them aware and understanding basesof the others’ requirements (ability).

Phase 3 • System usage and • MF had motivation (needed • Issues in adopting system • “They are haulers and don’t justreview system) and ability (to handle by service providers do our business, and not all their

• Reconfiguration of change and reconfigure work • Tolerant and understand- customers use this system, it’s work practices practices). Were very tolerant ing behavior of MFs just us. So updating the system

and understanding with service towards service providers’ is out of their normal business providers’ slackness owing to slackness procedures.”the ties. • Service providers • “We did mention some issues

cooperative by not about the system being slow, • Service providers lacked ability raising all issues in etc. . . . as for the other changes,

(to handle change) and motivation system to review we didn’t raise them, since (more effort) so were slack in committee and by everybody seems fine with the adopting system, but said they would participating in review arrangement now. We do not wantget used to system and were committee to discuss to disrupt them.”cooperative by not raising all issues project progress andand disrupting the community; updates.showed consideration for ties. • FACILITATOR of

• Review committee shows cooperation changetowards collaboration

reduce inefficiencies in their logistic processes and weretherefore willing to acquire the necessary ability (resources)for the project. The service providers lacked motivationsince they perceived no benefits from the system and wouldincur extra costs. The lack of motivation masked the value ofprior ties which could oblige them to participate in the sys-tem, and it took a long time to convince them. Their onlymotivation was the hope of long-term business from MF ifthey acceded to the system. XL had no prior ties with the

logistics partners but had a strong motivation (to sell thesolution). To overcome the limitation they had in terms ofties, they spent time building relationships with the logisticspartners as is reflected by their sales manager’s comment,“. . . the first few meetings, besides talking about business wespent time trying to build a rapport with them.” They alsoused their ability to prepare value assessments for each ofthe partners to motivate them for the project. The facts illus-trate that if motivation is strong, opportunity can be created


and ability can be acquired, and that in the initial phase whenbuy-in (Huang et al., 2001) of organizations has to be ac-quired for knowledge integration, motivation (M) is key.Social capital at this stage should therefore be leveraged as amotivator, and the other sources of social capital should beused to enhance organizational motivation.

Researchers have talked about the motivating role of so-cial capital in the form of trust and norms (Putnam, 1993),and about the influence of motivation on knowledge activi-ties like knowledge creation, knowledge exchange, knowl-edge assimilation, and knowledge transfer (Nahapiet &Ghoshal, 1998; Yli-Renko, Autio, & Sapienza, 2001; Inkpen& Tsang, 2005). But the present study finds that the motivat-ing role in the context of collaborative IS projects is signifi-cant during the initial phase to acquire the buy-in of thecollaborating organizations. Further, most studies indicatethat the motivating role of social capital is based on trust,norms, and obligations between members. The conceptual-ization of social capital in this study, based on the OMAschema, brings into consideration the largely disregardedinfluence of practical motivating factors (potential benefits,costs and effort required, etc.) that affect the social behaviorof organizations. The implication of this finding is that at theinitial stage of the project it is important to identify motiva-tors for each participating organization.

The Integrating Role of Social Capital During the Designand Implementation Stages of a Collaborative IS Project

The second finding suggests that social capital during thedesign and development activities of a collaborative IS pro-ject should be leveraged as an integrator. Following the buy-in, the case project activities involved integrating knowledgebases of the organizations through the organizational repre-sentatives. In the case discussed here, this phase was prettysmooth compared to the initial phase. The main factor wasthat all the organizational representatives had the requisiteability in terms of essential domain knowledge needed tostate requirements for the system. Opportunity, in terms ofprior ties, provided a shared understanding of each others’ re-quirements, which instilled a sense of cooperation amongthem. This is demonstrated by the fact that although each ofthem wanted a GUI best suiting their organization they wereunderstanding of the others’ requirements and were willingto compromise. The activities of this stage did not incurmuch effort on the part of the partners, and their comfort withtheir domain knowledge as required for this phase (unlike inthe first phase, when they had to understand software andtechnology) made them downplay their lack of motivation inPhase 1. The presence of requisite abilities for the activitiesin this phase helped in integrating the diverse knowledgebases; this integration process essentially consisted of gar-nering knowledge of workflows from the partners to buildinto the systems. Social capital (as OMA) for the Design andImplementation phase should therefore be leveraged to as anintegrator, and opportunity (O) and motivation (M) shouldbe used to enhance abilities (A) in the form of shared

understanding, acquisition of resources required, and soforth, to influence integration.

Social capital in the form of cognitive abilities influencesknowledge activities through shared codes and languagesbetween members (Nahapiet & Ghoshal, 1998), and alsoinfluences the ability of exchange partners to participate invarious knowledge activities like identifying, exchanging,and assimilating knowledge (Yli-Renko et al., 2001). Thisstudy demonstrates that social capital acts as an integrator ofknowledge across organizations due to the dominance of theability source of social capital enabled by not only sharedlanguage and shared understanding, but also by basicresources and competencies as needed for the project. Sec-ondly, the integrator role of social capital is significantduring the stage of the collaborative project that involvessystem design or implementation. The implications of thisfinding are that in this stage of the project, social or projectactivities should cater to developing a shared understandingof issues between the organizations, and in acquiring ordeveloping skills needed for the project through trainingprograms or other formats.

The Facilitating Role of Social Capital DuringPostimplementation Stages of a Collaborative IS Project

The third finding of this study suggests that during thelater phases of a collaborative IS project, social capitalshould be leveraged to facilitate collective actions towardsthe project. The facilitating effect is seen during the Postim-plementation phase. The slackness of service providers inusing the system was overshadowed by the tolerance andunderstanding shown by MF in this regard. Although theyhad strong motivation to get the service providers to use thesystem, and they would call them up and remind them to up-date the system, they acknowledged that it would take timefor the service providers to get used to the system. Even theservice providers, although they had issues in using the sys-tem, agreed they would get used to it and were also verycooperative in the review meetings in raising only the im-portant issues that would have implications for all, instead ofraising every single issue. This phase saw a focus on collec-tive actions with increased tolerance and cooperation, bothof which were enabled by the opportunity source of socialcapital. Their ties facilitated the collective actions in thisphase, and the lack of motivation and ability (in the serviceproviders) was tolerated. Social capital therefore played therole of a facilitator of collective actions in this phase, en-abled by the ties between the organizations. But what has tobe noted is that the role of social capital as a facilitator is notsignificantly dominant throughout the project. This can besaid based on the fact that the negotiations to convince ser-vice providers in the first phase took so long despite theirprior relationships.

Although prior studies indicate that social capital facili-tates knowledge exchange (Tsai & Ghoshal, 1998), knowl-edge integration (e.g., see Huang et al., 2001), and collectiveaction (Coleman, 1988; Leana & Van Buren, 1999), the


significance of this study is that social capital facilitatescertain activities during certain phases of a collaborativeproject; for instance, the role of social capital as facilitatorwas not effective during the initial phase of the project. Theimplication of this finding is that social capital, in the laterstages of a project, should be leveraged for collective actiontowards the project, such as building an identity towards theproject, ensuring progressive work on the system, and facil-itating users’ adoption of the system.

The Contingent Effect of Social Capital

The OMA analysis in the study also highlights the con-tingencies of social capital in collaborative IS projects. Priorto the project it can be said there was social capital betweenthe logistics partners (see first paragraph of Analysis andDiscussion). But strangely, social capital does not seem tohave influenced the IS project initially (in the Negotiationsand Planning phase). Although they were partners for sevenyears, it took three months of intense negotiations to get thebuy-in of the service providers for the project. This was ba-sically because the collaborative system did not fit into thestrategic goal of the service providers. Prior to the project,the partnership ensured regular business and was in align-ment with their business strategy (long-term business).When the idea of a collaborative system was raised, the goalof the system (to reduce inefficiencies in logistics processesfor MF) was not synchronous with the service providers’goals, since they did not perceive benefits to be gained fromthe system.

Most studies indicate that preexisting social capital posi-tively influences the action of partners (e.g., see Kumar &Worm, 2003) and knowledge activities (Pan et al., 2001;Yli-Renko et al., 2001). Reciprocal expectations regardinggoodwill and trustworthiness of partners influence knowl-edge creation (Nahapiet & Ghoshal, 1998). However, theOMA analysis in this study suggests that existence of socialcapital does not always ensure a positive influence on

partners’ actions. This finding provides empirical support forthe concept of “task contingency” suggested by Adler andKwon (2002). Task contingency indicates that appropriationof the value of social capital depends on the goal of a taskbeing synchronous with the goal of participating members.Koka and Prescott (2002) validate the contingency effect ofsocial capital based on the information needs of the ex-change partners. Although such a contingency may not bewitnessed in a typical client-IT vendor relation, since theclient would have chosen the IT vendor and motivation forthe project engagement is mutual, other contingencies of so-cial capital may exist and need to be explored. The findingsare summarized in Table 5.

Conclusion

In explicating the roles through which social capital canbe leveraged for knowledge integration in the context of acollaborative IS project, this study has made contributions totheory and practice. Particularly, given the extant literatureon IS projects, the findings of this study offer insight on howsocial capital, a naturally occurring resource, can be lever-aged for effective knowledge integration in the project.Although the benefits of social capital for knowledge inte-gration and interorganizational relationships have been indi-cated, this study specifically elicits the roles through whichit can be leveraged in the complex contemporary context ofcollaborative IS projects. The various roles demonstrate thedynamic nature of social capital; distinct managementstrategies are required in the different phases of the project.Understanding these roles allows for a more microscopicview of social capital and hence a more in-depth under-standing of how the resource may be built and managed toleverage its benefits. The conceptualization of social capitaladopted in this study, based on the OMA schema, con-tributes to the understanding of organizational actions in col-laborative IS projects by incorporating practical, economi-cal, and strategic factors, which are more likely to influence

TABLE 5. Findings.

Finding Description and implications

The motivating role of social capital During the initial stages it is essential to get the buy-in of all organizations for the project, and social during the initial stages of a capital in the form of trust and obligations can be leveraged to achieve that goal. Value assessments, collaborative IS project cost-benefits analysis, etc., should also be conducted to motivate organizations.

The integrating role of social capital Social capital in the form of shared understanding and an understanding of each others’ requirements during the design and development can be leveraged to integrate necessary knowledge for the project across the organizations.stages of a collaborative project Activities at this stage should enable development of shared understanding through social activities,

and by facilitating extensive interaction (e.g., collocation of project team).The facilitating role of social capital Social capital in the form of collective identity and sense of belonging towards the project can

during the postimplementation facilitate system adoption and cooperation towards the same. Social activities should be stages of a collaborative project conducted to foster the development of a collective identity towards the project.

Social capital contingency The positive influence of social capital on knowledge integration in the project is contingent on how synchronous the goal of each collaborating organization is with the projects’ goal. It shouldtherefore be ensured that the project goals be stated and specified in a way so as to achievealignment of goals.


organizational behavior, in addition to the softer factors liketrust and ties. The schema also allows for validation of thecontingency effect of social capital, highlights the contex-tual nature of social capital, and allows for its application invarious contexts.

The challenge of managing IS projects has beenacknowledged by researchers and practitioners alike. Thefindings of this study enable understanding of appropriatemanagement strategies for collaborative IS projects (as wellas for collaborative projects of a similar nature) and anunderstanding of the dynamics at play. The various roles ofsocial capital imply a focus on distinct areas for ensuringcooperative behavior in the projects. Furthermore, this studyhas served to extend the valuable and widely acknowledgedconcept of knowledge management beyond organizationalboundaries.

Future research needs to investigate, in depth, the variousroles of social capital in distinct contexts and distinct eventsso as to identify the contingencies of social capital’s influ-ence. The OMA schema can also serve to extend the valu-able concept of social capital to various other contexts (e.g.,virtual teams, knowledge transfer, etc.). Given the trend to-wards outsourcing IT/IS projects, considering the effect ofsocial capital in these structural arrangements may be usefulto outsourced projects. There is also a need to investigatehow these findings can be made sense of in projects that donot follow a traditional life cycle, but follow a parallel de-velopment or implementation process. This study focusedon the antecedents of social capital and not on the actualforms in which social capital exists in context. Understand-ing the specific forms in which social capital manifests itselfand the implications on knowledge integration will be aninteresting direction to pursue.

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Appendix: Interview Guide

Background information

a. Role in the organization, role in the project

b. Prior experience and experience in current organization

Your view of the motivation for the project

Describe the different phases and activities in the project.

Describe the process that was followed for the implementa-tion of the project. What project management procedureswere followed and what was the reporting hierarchy in theproject team?

What do you think of the motivation of the team members/your organization? (depending on the whether the intervie-wee was from the top management or was a team member)

Did everybody in the team/all organizations have the requi-site expertise for the project? Did the diverse backgroundshamper the project in any way?

Recall incidents, key issues, and challenges in the project.How were the issues resolved?

What were the inhibitors and facilitators in different phasesof the project?

Did you ever feel relationships being used to resolve issuesor for expediting tasks, etc.?

How was your relationship with the other organizationalrepresentatives? How well did you know their businessprocesses, operations, etc.?

Did your prior relationship/lack of prior relationships withthe other organizations affect the project in any way?

Is there anything else you would like to say about theproject, anything at all?

Note: These questions were used as guidelines by the re-searcher and represent a sample of the open-ended questionsasked. In most cases the interviewees were made to expresstheir views, opinions, state facts, and so on, and that directedthe following questions. An attempt was made to elicit asmuch information as possible from the interviewee whilekeeping discussions within the focus of the study.

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