Organizational knowledge - or intellectual capital - has become decisive for the ability of companies to compete in the ever changing knowledge economy. In their paper, Dr. Wirtz, Dr. Tambyah and Dr. Mattila discuss how acquiring and transferring this organizational knowledge can be facilitated in the presence of healthy social relationships. Using a social capital perspective, the authors examine how unsolicited customer feedback received by frontline employees can be converted into explicit organizational knowledge and show how both relational social capital and structural social capital impact this process. 

In the study, relational social capital comprises two key facets that define how social relationships within an organization are formed: first, trust in the organization‘s leaders which develops through positive interactions and second, the presence of a shared vision which creates a sense of purpose and collective consciousness for the organization as a whole.

Structural social capital on the other hand refers to the nature of a dense network and its pattern within the organization. It comprises two core dimensions: first, the adequacy of knowledge transfer systems which is reflected in the presence of both communication technologies (e.g. intranet) and liberal reporting structures, and second, the use of rewards for the participation in knowledge sharing within the organizational network.

This paper enhances the existing research on this topic by examining the combined effects of relational social capital and structural social capital while highlighting the moderating influences of feedback valence and the intended use of the feedback on employee likelihood of reporting unsolicited customer feedback. Hence, the authors propose that the positive effects, which the presence of social capital may have on reporting communications, depend on whether the feedback is positive or negative (i.e., its valence) and are further influenced by whether the feedback is used for individual employee performance evaluation or for overall service process improvement (i.e., its intended use).

The researchers employ a two-pronged approach to investigate this relationship. During the first qualitative study, service employees from different organizational levels were interviewed about their perceptions of feedback systems and intended uses of unsolicited customer feedback. From those interviews, a number of common themes and meaningful differences emerged.

Overall, the reporting of negative feedback depended to a great extent on its intended use, with interviewees particularly concerned if it was used for personal performance evaluation. However, the reporting of negative feedback was generally facilitated in contexts of high relational social capital, when trust in leaders and a shared vision among employees existed.

The reporting of positive feedback was found to be well understood as a source for individual and collective rewards. However, interviewees did not equally consider positive feedback as an inspiration for further service improvement or a means to identify organizational strengths. Because the participants did indeed see those benefits when prompted, high structural social capital that emphasizes these benefits would significantly enhance the reporting of positive feedback for service process improvement purposes.

During a second experimental study, a sample of 432 intercept survey respondents were asked to answer scenario-based questions, in order to enable statistical tests for the relationships observed in the initial qualitative study.

The experiment comprised four parts, in which the presence of relational and structural social capital in the respondents‘ organization was measured first. This was followed by scenario-dependent questions: In the second part, the respondents receive an unsolicited customer feedback and are either told that in their organization customer feedback would be used for individual performance evaluation or for service process improvement. In the third part, a valence condition was presented, whereby the given feedback was presented as either positive or negative. Finally, the respondents‘ likelihood to report the quoted feedback given its intended use and valence was measured and put in relation to the presence of social capital in their organizations.

The results confirmed that both the intended use of the feedback and feedback valence moderated the employees‘ likelihood to report unsolicited feedback. For negative feedback, both relational and structural social capital proved to have a positive effect on the reporting behavior of negative feedback when feedback collection was used for employee evaluation purposes. This is important, because it shows that employees would likely fail to report negative feedback that is used for their personal evaluation, if there was no trust or if some impediments to communication existed.

For positive feedback, the presence of high relational social capital was shown to increase employee likelihood to report for the sake of organizational process improvement. This is important, because relational social capital thereby enables companies to identify and develop its service strengths. Without relational social capital, this information from unsolicited positive feedback would likely be lost.

A number of practical managerial implications can be drawn from this study. Relational and structural social capital can be created by promoting open communications, providing clear guidelines for the reporting of unsolicited customer feedback and by confirming that both negative and positive feedback can be used constructively. Moreover, the researchers show that relational and structural social capital are beneficial for two kinds of companies in particular: first, for companies that intend to use negative feedback for employee performance evaluation and second, for those that intend to use positive feedback to identify and foster their competitive strengths.