Journal of Intellectual Capital

The role of social capital in the relationship between human capital and career
mobility: Moderator or mediator?
Shu-Chi Lin Yin-Mei Huang
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Shu-Chi Lin Yin-Mei Huang, (2005),"The role of social capital in the relationship between human capital and
career mobility", Journal of Intellectual Capital, Vol. 6 Iss 2 pp. 191 - 205
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The role of social

The role of social capital in the capital
relationship between human
capital and career mobility
191
Moderator or mediator?
Shu-Chi Lin and Yin-Mei Huang
Department of Business Administration, National Chengchi University,
Taipei, Taiwan

Abstract
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Purpose – This study aims to examine what kind of role social capital plays in the relationship
between human capital and career outcomes, with a particular focus on testing the mediation and
moderation models.
Design/methodology/approach – Using data compiled from 111 employees at three financial
institutions in Taiwan, social capital was measured by employees based on network in-degree
centrality, and development potential was measured by supervisors.
Findings – Results showed that the effects of human capital on developmental potential were fully
mediated by social capital. Moreover, employees with firm-specific human capital, managerial
positions and longer tenure, received higher potential evaluations by their supervisors through their
central positions.
Research limitations/implications – The study shed light on the direct and significant effects of
social capital on developmental potential, while human capital should translate into social capital to
get positive career outcomes. That is, it is social capital that transforms human capital into workplace
gains, e.g. producing positive career outcomes and increasing supervisors’ perception of potential.
Practical implications – Employees should make best use of social capital transformed from
human capital to obtain positive career outcomes in the organizations.
Originality/value – Support for the authors’ mediation model suggests that both social capital and
careers literature can be enhanced though integration. It follows that future research on career
outcomes would benefit from the inclusion of social capital variables.
Keywords Human capital, Social networks, Career development, Job mobility, Taiwan
Paper type Research paper

The rise of the knowledge-based economy is attributed to the increasing importance of

intellectual capital as an intangible and important resource for companies’ sustainable
competitive advantages (Roos and Roos, 1997). Human capital and social capital
embedded in employees are viewed as the fundamental components of intellectual
capital, because intelligence is created through knowledge exchange among
organizational members (Nahapiet and Ghoshal, 1998). Thus, exploring the complex
relationships of human capital and social capital from an individual perspective is
helpful for deepening the theoretical bases of intellectual capital.
One of the enduring questions we face as human beings concerns why it is that Journal of Intellectual Capital
Vol. 6 No. 2, 2005
some people surpass others in the race for life’s prizes (Mehra et al., 2001). In work pp. 191-205
organizations, for example, why are some people promoted faster than others? Human q Emerald Group Publishing Limited
1469-1930
capital and social capital are regarded as the main answers to this question. DOI 10.1108/14691930510592799
 JIC Individuals with more investments in their human capital could develop professional
6,2 expertise, increase productivity at work, and then get positive rewards from
organizations (Wayne et al., 1999). Another vital factor is social capital. That is,
individuals gain social capital because, in comparison to others, they occupy more
advantageous network positions, which allow access to a variety of people with the
necessary information and the chance contribute to organizational functioning, thereby
192 gaining more positive career outcomes, such as faster promotions (Burt, 1992) and
career success (Seibert et al., 2001).
Research on career outcomes has focused on the antecedents, identifying variables
that are related to career success or development, such as employees’ demographics
(Greenhaus and Parasuraman, 1993; Tharenou et al., 1994), human capital (Aryee et al.,
1994; Tharenou et al., 1994), and social capital (Burt, 1997; Seibert et al., 2001). These
empirical studies have provided vital bases for future research on career outcomes.
Judge et al. (1995) suggested that one needed agenda for research is to examine multiple
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determining factors of career outcomes within a single investigation; however, very

few studies have actually tested the complex relations among determinants and career
outcomes. Given that many predictors of career outcomes have been investigated, it is
important for future theory to determine the relative importance of, and the
associations between, these various predictors. A related research topic worthy of
attention is whether the different predictors are interrelated in their effect on career
outcomes, particularly in the combined relationship of human capital and social capital
and its effect on career outcomes.
Human capital and social capital are interrelated (Coleman, 1988) and positively
related to organizational success (Friedman and Krackhardt, 1997). Leenders and
Gabbay (1999) indicated that the relationship between human capital and social capital
is causal. The information and knowledge individuals own will be positively related to
the positions they occupy in social networks, and will increase social capital due to
influence on other members. In contrast, Hitt et al. (2001) argued that human capital
may differentially take advantage of social capital and the rank of partners’ schools
will be moderated in the relationship of business network and clients’ attraction.
Similarly, Florin et al. (2003) also found that the interaction between human capital and
social capital has a positive effect on organizational financial performance. Research on
career outcomes has emphasized the importance of being competent (Wayne et al.,
1999) and in the right place (Brass, 1984), but has neglected both the possibility that
social capital generated from network positions occupied by individuals might be
influenced by their human capital, or the possibility that human capital and social
capital might combine to influence career mobility. Recent calls for more insight into
the origins of social capital and the importance of individual characteristics (e.g.
Emirbayer and Goodwin, 1994) prompt us to investigate why some individuals acquire
more resources as well as how individual differences in human capital and social
capital combine to determine career mobility in organizational contexts.
The purpose of the current study is to examine simultaneously the effects of both
human capital and social capital on career mobility in a single investigation, and to
explore how these two determinants combine to achieve individuals’ positive career
outcomes. Although some empirical studies have found the separate effects of human
capital and social capital on career mobility, there has been relatively little work on
how individual differences in human capital affect the social capital generated from
 network positions and the combinative effects on career mobility. Rather than treat The role of social
individual attributes and social attributes as separate realms of enquiry, this study capital
seeks to understand how the social capital that significantly affects the career
outcomes of organizational participants is shaped by their attributes.

Literature review
Social capital
193
Social capital has been defined as:
[. . .] the structure of individuals’ contact networks – the pattern of interconnection among the
various people with whom each person is tied (Raider and Burt, 1996, p. 187).
Social capital exists in the relationships between and among persons and extends the
more that the position one occupies in the social network constitutes a valuable
resource (Friedman and Krackhardt, 1997). From the social capital perspective, what is
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critical to success is not individual attributes but the central network position at which
one is embedded in an organization – that is, one’s position in a network of social
relations determines the amount of one’s social capital, which produces the differences
in career outcomes (Brass, 1995).
For the sake of different research questions, scholars often make a variety of
definitions of social capital (Nahapiet and Ghoshal, 1998; Adler and Kwon, 2002);
however, most researchers define social capital from the network perspective (e.g.
Brass, 1995; Burt, 1992). Thus, we follow this perspective to define social capital. Social
capital theory was founded on the premise that a network provides value to its members
by allowing them access to the social resources embedded within the network (Florin
et al., 2003). From the network perspective, the amount of social capital possessed is
determined by whether individuals can occupy an advantageous network position
where they get tied to others who possess desirable resources, such as information and
financial support, in order to achieve positive work-related and career outcomes. Adler
and Kwon (2002) have emphasized that the network position is necessary for social
capital because it represents opportunities to gain access to and interact with others.
Social capital is positively related to career outcomes. Centrality within the social
network reflects the degree of one’s social capital, because it represents an individual’s
involvement in exchanging assistance with coworkers and engaging in mutual
problem solving. Moreover, Baldwin et al. (1997) have indicated that an individual who
is central in the social network is, over time, able to accumulate knowledge about
task-related problems and workable solutions. This expertise not only enables the
central individual to solve problems readily, but also serves as a valued resource for
future exchanges with coworkers. As others become dependent on a central individual
for important advice, he or she gains an advantage that can be used in future
exchanges for valued resources (Cook and Emerson, 1978), and thereby is more
possible to obtain promotions. Burt (1997) found that managers with more social
capital (measured by network constraints) get promoted faster than those with less
social capital. Seibert et al. (2001) also found that social capital is positively related to
promotions and career satisfaction.
In this study, we compare individuals’ social capital by measuring network
centrality because this captures the extent of an individual’s access to resources, such
as task-specific knowledge and confidential information about work-related issues.
 JIC Central individuals, because of their more numerous connections to others, have more
6,2 social memberships to draw on in obtaining resources, and are thereby less dependent
on any single individual (Cook and Emerson, 1978). Centrality also implies control over
the acquisition of resources from others because central individuals can choose from a
greater number of alternative individuals when exchanging beneficial resources.
Moreover, the study’s focus on centrality allows its results to be interpreted in the
194 context of previous research that has demonstrated relationships between centrality
and power (Brass, 1984), influence on decision making (Friedkin, 1993), and innovation
(Ibarra, 1993). However, an important difference between this study and recent
research is that this study focuses on centrality within the unit rather than within an
organization as a whole (Sparrowe et al., 2001).

Human capital
Human capital theory proposes that employees make rational choices regarding
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investments in their own human capital (Becker, 1975). This theory argues that
individuals make rational choices regarding whether or not they want to invest more of
their time, effort, and money in education, training, and experience. That is, employees
weigh the advantages and disadvantages of these decisions or investments, including
the potential costs and rewards of such investments (Wayne et al., 1999). Human
capital is movable and does not belong to organizations, because employees are viewed
as owners of human capital, who decide the amount of investments in human capital
(Roos et al., 1997). From the human capital perspective, what is critical to career
outcomes is an individual’s investment in his/her human capital, because the
investment will increase productivity, and then get extrinsic rewards from supervisors,
such as a raise or promotion (Davenport, 1999).
Human capital generates value through investments in increasing individuals’
knowledge, skills, talents and know-how (Roos et al., 1997). One type of investment is
education. Higher levels of education reflect greater investments in human capital
(Bontis, 1998, 1999). An individual who is highly educated is more knowledgeable and
performs better than others, and gets more opportunities to move upward (Hitt et al.,
2001; Wayne et al., 1999). Tharenou et al. (1994) found that education was positively
related to promotion. Also, rank and tenure are forms of investment that can enhance an
individual’s human capital. The contention is that individuals with higher rank or
longer tenure may better understand the whole company, learn from their work, develop
expertise in their positions, and obtain valuable firm-specific experiences, which all
increase developmental opportunities (Judge and Bretz, 1994). In fact, research has
indicated that rank and tenure are positively related to career outcomes (e.g. Mehra et al.,
2001; Powell and Butterfield, 1994, 1997). Finally, Pennings et al. (1998) indicated that
age is another form of human capital, as younger employees would rather invest more
time and effort in increasing their competency compared to older employees, and the
return on investment is much higher. In summary, the organization rewards individuals
who possess higher level of human capital (i.e. employees who have higher educational
levels, higher rank, longer tenure and who are younger).

Two models
Given the separate and unrelated literature on social capital and human capital, the
question is how network centrality and human capital variables combine to affect
 career outcomes in organizations. Friedman and Krackhardt (1997) argued that The role of social
decisions regarding promotion are determined not only on human capital, but also by capital
social capital generated from network centrality, while also emphasizing the
relationship between human capital and social capital. Thus, we will explore two
perspectives: a mediation model, and an interactive model to answer this question.

Mediation model 195

Differences in career outcomes among individuals in organizations may be due to high
human capital (younger, higher education, longer tenure, or higher rank) occupying
central network positions that link otherwise disconnected people and provide
resources. Compared to others, those with higher human capital are likely to be
respected for their expertise (French and Raven, 1959). Others will go to them for
advice or assistance, which then provides that person with more impact on others. In
these ways, human capital should translate into greater social capital. Moreover,
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human capital may be read as a signal of knowledge and expertise. That is, the higher
an individual’s educational level is, or the longer they have held tenure, the more likely
it is that he or she will be regarded as a director for problem solving (Friedman and
Krackhardt, 1997). And then, greater human capital will attract more people who go for
advice, and increase network centrality, which generates social capital (Ibarra, 1992),
and finally develops promotion opportunities.
From the perspective of the mediation model, individuals who accumulate greater
human capital will occupy central positions in the social network of organizations and
also reap the benefits of social capital. Moreover, those with higher social capital will
enhance their value by facilitating the exchange of information across the organization
and thereby achieve superior outcomes (Friedman and Krackhardt, 1997; Hitt et al.,
2001; Mehra et al., 2001).

Interactive model
The interactive perspective, which is different, but not at all incompatible, suggests
that the different structural network positions one occupies may differentially
influence how one takes advantage of one’s human capital. Compared to others, an
employee who occupies the central position is more likely to take advantage of the
network to gain the developmental opportunities of expressing individual expertise
and knowledge (Burt, 1997). When one possesses more expertise and is in a central
position, the interaction of human capital and social capital will produce more positive
career outcomes.
As Nahapiet and Ghoshal (1998, p. 252) put it: “Who you know affects what you
know”. The more social capital the individual gets from the central position, and the
more competent he/she is, the more knowledge he/she will be able to assimilate, value,
and apply from this central structural position (Cohen and Levinthal, 1990). Thus,
compared to employees with the same human capital, those who are in central
positions could get more social capital and developmental opportunities. Conversely,
those who are in peripheral positions in the social network should not get more positive
career outcomes, even if they are more educated or in higher ranks. This is because of
the fact that an individual’s success is conditioned not only by individuals’ investments
in human capital, but also by the social context in which the individual interacts
(Loury, 1987).
 JIC Methods
6,2 Considered one of the few Asian economies to have successfully weathered the storm
that was the financial crisis of the late 1990s, Taiwan serves as a valued site for an
examination of employee behavior within thriving firms. To test the above stated
models, we contacted employees of three Taiwan-based financial institutions, with the
chosen firms being famous and similar to one another.
196 According to Brass and Burkhardt (1992), research on network analysis should be
investigated in a closed organization, and the unit of reference is constrained by the
size of group. The larger the group, the fewer members the employee may contact,
resulting in lower network centrality. Conversely, the smaller the group, the less
constraints the employee has on contacting with others, resulting in the indifference of
network centrality among all employees. Thus, a group of 30-50 persons is adequate
(Brass and Burkhardt, 1992). In the three financial institutions in this study, we
targeted departments with about 40 employees for our sample population.
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In our study, therefore, we distributed our survey to a total sample of 112 employees
in the three selected Taiwanese financial institutions, with each having a department of
34, 39, and 39 persons that filled respectively out the questionnaire. All the employees
voluntarily participated in this investigation; the response rate as a percentage of all
employees we invited to participate was 99 percent. As network analysis requires a
high response rate (Wasserman and Faust, 1994); 99 percent is not abnormal. The
network and individual characteristics surveys were administrated on site in the three
departments during work hours. The formal department supervisor completed
questionnaires to assess individuals’ developmental potential.
The sample was 56 percent female and 43.6 percent unmarried. The ages ranged
mainly from 26 to 40, accounting for 86.4 percent of the studied sample. 50 percent of
respondents had organizational tenure under three years. Of the respondents,
approximately 58.7 percent had a college degree and 79.1 percent served in
non-managerial roles.

Measures
Social capital. The network surveys were used as to measure of social capital. The
network surveys listed the names of each individual in a respondent’s department.
Following the work of Burt (1992) and Ibarra (1993), we assessed advice-seeking and
giving relations by asking the respondents this question: “Do you go to [name] for help
or advice on work related matters?”
We computed normed in-degree centrality scores for each individual to allow for
comparisons across groups of different size. In-degree centrality is a form of degree
centrality that counts only those relations with a focal individual reported by other
department members, and it does not suffer from the limitations of self-report, as does
out-degree centrality.
Human capital. Human capital variables included age, education, tenure and
managerial rank and were obtained from the respondent’s self-report. Age was
assessed using a seven-point scale ranging from 1 (21-25) to 7 (51-60). Also, education
levels were determined using a four-point scale ranging from 1 (high school) to 4
(graduate degree). Tenure was assessed using a five-point scale ranging from 1 (less
than one year) to 5 (more than ten years). Managerial rank was represented by a
dummy variable, 1 as managerial rank, and 0 as non-managerial rank.
 Career mobility. We measured career success based on supervisors’ subjective The role of social
evaluation. The three departments’ administrators were asked to rate each employee’s capital
developmental potential in their own departments on a seven-point scale ranging from
0 (almost no potential) to 6 (the highest potential). Developmental potential served as
the indicator of intra-organizational career mobility because it provided a way to see
who is likely to move up (in the eyes of those who have influence over promotions)
before it actually happens, avoiding the potentially confounding effects of rank 197
(Friedman and Krackhardt, 1997). Developmental potential also has the benefit of
being perceptual. As Kilduff and Krackhardt (1994) showed, it is other’s perceptions of
one’s social capital that actually produces the benefits to be reaped from that capital for
one’s reputation.
Control variables. We controlled for sex, marriage, and the companies (two dummies
used for three companies). Because the financial institutions were considered to be
hierarchical organizations, sex and marriage might have effects on individual’s career
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mobility. The male, for example, may be regarded as more trustworthy in the financial
institutions. Or, the married employees would be more willing to help other members
based on their increased responsibility (Anderson et al., 1980).

Analysis
Our approach to testing the mediation and moderation models follows standard
statistical procedures (details in Baron and Kenny (1986)). We controlled for company,
sex, and marriage in each test. To assess support for mediation, we used hierarchical
regression analysis to examine whether the inclusion of the social capital variable
significantly affected the relationship between human capital and career development
potential. If a significant relationship between human capital variables and career
development potential is eliminating or significantly reduced as a result of controlling
for the social capital variable, this would indicate support for mediation.
We used hierarchical regression analysis to test the interactive model, correcting for
the multi-collinearity that arises when testing moderated relationships among
continuous variables before generating interaction teams (Cohen and Cohen, 1983;
Aiken and West, 1981). Centering consists of subtracting the sample mean from each
independent variable. The adjusted variables each have a mean of zero, but their
sample distribution remains unchanged. We computed four interaction terms by
multiplying the centered network centrality score with each of the four human capital
variables. Interaction terms were entered in a separate step after the main terms had
already been entered. If the addition of the interaction terms results in a statistically
significant improvement over the regression model containing the main terms, then
this would indicate support for the interactive model.

Results
Correlations for the study variables are shown in Table I, along with the corresponding
means and standard deviations.

The interactive model

The interactive model suggests that the relationship between human capital and
developmental potential depends on the social capital of persons occupying central
network positions: individuals who were central in their department should be able to
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6,2
JIC

198

Table I.

correlations
Descriptive statistics and
Variables Mean SD 1 2 3 4 5 6 7 8 9

1. Company 1a 0.31 0.46

2. Company 2a 0.34 0.48 20.48**
3. Sexb 0.56 0.50 0.00 20.05
4. Marriagec 0.56 0.50 0.22* 20.21* 2 0.04
5. Age 2.97 1.06 0.52** 20.25** 2 0.26** 0.41**
6. Education 2.67 0.71 20.30** 0.26** 2 0.33** 2 0.05 20.18
7. Rankd 0.21 0.41 20.09 0.00 2 0.11 0.27** 0.39** 0.05
8. Tenure 2.85 1.41 0.70** 20.21* 0.00 0.31** 0.64** 20.35** 0.20*
9. Social capital 0.12 0.14 0.13 20.04 2 0.09 0.25** 0.43** 20.06 0.59** 0.39**
10. Potentialb 5.18 1.30 20.47** 0.04 2 0.05 0.00 0.10 20.03 0.21** 0.01 0.37**
a b c d
Notes: Firm, 0 ¼ firm1, 1 ¼ firm2; Sex, 0 ¼ male, 1 ¼ female; Marriage, 0 ¼ unmarried, 1 ¼ married; Rank, 0 = non-managerial rank,
1 ¼ managerial rank; * p , 0:05; **p , 0:01; n ¼ 111 for all variables; Goodman and Kruskal’s lambda was computed for two nominal variables, and a
point-biserial correlation was computed for one continuous variable and one dichotomous variable
 more effectively obtain higher developmental potential from their investments inn The role of social
human capital. We found no support for this prediction. Model 5 in Table II shows that
adding the four interaction terms as a set failed significantly to improve variance
capital
explained over the direct-effects of model 4. There was, therefore, no support for the
interactive model.

The mediation model 199

According to the mediation model, the success of persons with high human capital in
outperforming those with low human capital is due to the social capital generated from
the central network position one occupies in organizations. To test this model, we first
examined the relationship between all variables of human capital and developmental
potential. The regression results presented in model 2 Table II show that only
individuals in managerial rank, as expected, tended to outperform non-managerial
rank (b ¼ 0:20, p , 0:05). Controlling for company, sex and marriage, social capital
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also significantly predicted employee potential (b ¼ 0:37, p , 0:05), which was

presented in model 3. Following Baron and Kenny’s (1986) approach to studying the
mediation effects, the first two steps shown in model 2 and 3 have been supported.
Next, we found that managerial rank is associated with higher levels of social capital
(b ¼ 0:44, p , 0:01). The final step needed to show that social capital (measured by
network centrality) mediates the relationship between managerial rank and
developmental potential. If the addition of social capital eliminates the effect of
managerial position on developmental potential, then it is plausible that the
mechanism that caused individuals to have higher potential to human capital was their

Modela
Independent variables 1 2 3 4 5

Company 1 20.61** 20.51** 20.60** 2 0.37* 2 0.34*

Company 2 20.23* 20.21* 20.25** 2 0.20* 2 0.16
Sex 0.03 0.07 0.05 0.06 0.05
Marriage 0.08 0.02 0.01 0.03 0.00
Human capital
Age 0.07 0.01 0.12
Education 0.06 0.00 2 0.05
Rank 0.20* 0.02 0.00
Tenure 20.10 2 0.31* 2 0.49**
Social capital (SC) 0.37** 0.42** 0.64**
Age £ SC 0.29
Education £ SC 2 0.05
Rank £ SC 2 0.22
Tenure £ SC 2 0.31
Model F 10.28 6.12 13.72 8.62 6.59
DF 1.68 21.79** 19.33** 1.56
R2 0.29 0.34 0.41 0.45 0.49
DR 2 0.05 0.12 0.11 0.04
Adjusted R 2 0.26 0.28 0.38 0.40 0.41
Notes: a DF and DR 2 report changes from model 1, except for model 4 and model 5, which report Table II.
change statistics from model 2 to 4, and model 5 to 4; * p , 0:05; ** p , 0:01; Coefficients are Results of regression
standardized beta weights analyses
 JIC higher social capital. In the results shown in model 4, the addition of social capital does
6,2 eliminate the significance of the managerial rank for predicting high potential.
However, other human capital variables, such as age, education and tenure, are not
positively related to developmental potential and social capital.

Post hoc analysis

200 There may be concerns about the mediation model analyzed by regression analysis.
Thus, we used path analysis in LISREL 8.3 (Joreskog and Sorbom, 1999) to confirm the
mediating relationship. We used observed rather than latent variables because of the
modest sample size (Pugh, 2001). The covariance matrix was used as input to all
analyses.
The mediation model displayed in Figure 1 fits the data well, x 2 ð4; n ¼ 111Þ ¼ 3:79,
p . 0:05; RMSR ¼ 0:03; GFI ¼ 0:99; AGFI ¼ 0:94; NFI ¼ 0:98; CFI ¼ 1:00. Figure 1
shows the path coefficients for this analysis. Social capital measured by network
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centrality was positively related to employees’ developmental potential (b ¼ 0:37,

p , 0:05), showing the direct impacts of social capital on developmental potential.
Moreover, the impacts of human capital, managerial rank, and tenure, were also
positively related to social capital (b ¼ 0:51, p , 0:05; b ¼ 0:24), partly supporting the
mediating model.
In addition, we wonder whether the proposed mediating impacts of social capital
can fully account for the relationship between human capital and developmental
potential. Thus, we estimated an alternative model that included direct links between
all human capital variables and employees’ developmental potential. Results showed
that the fit of this model was not significantly better than the meditation model,
Dx 2 ¼ 9:84, p , 0:05. Moreover, the direct links between all human capital variables
and employees’ developmental potential was not statistically significant. This
suggests that social capital do account for the relationship between human capital and
developmental potential, particularly rank and tenure.

Discussion and conclusion

This research represents a theory-driven examination of how social capital is related to
human capital as well as how social capital and human capital combine to predict
career mobility. Consistent with social capital theory, we found that people’s roles in
central network positions are positively related to career developmental potential.

Figure 1.
Path analysis results
 Further, we found that the relationship between human capital and career development The role of social
potential in the organizations is completed through the effect of social capital, capital
supporting the mediation model. These results explain the combinative effects of
human capital and social capital on career outcomes, and the relative importance, and
direct impact, of social capital.
This present study proposed the mediation model and interactive model to explore
the relations among human capital, social capital, and career outcomes, and the 201
mediation model was the only model for which we could find any supporting evidence.
The current results only provide support for the mediation model, or rather the
moderation model. We found that social capital accounts for the relationship between
human capital and developmental potential. That is, employees with managerial rank
or longer organizational tenure can increase their social capital by occupying central
positions in organizations, which would also positively influence supervisors’
evaluation on individual developmental potential. This is because the employee who
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serves in a managerial position has been regarded as having abundant knowledge,

giving an implicit signal that this person can help with solving problems at work
(Friedman and Krackhardt, 1997). Similarly, the employee with longer tenure turns into
the informal counselor at work because he/she understands job affairs very well.
Consequently, employees with managerial rank or longer tenure tend to serve as the
adviser at work, which will attract more colleagues, increase their social network
centrality and accumulate further social capital. Furthermore, employees who were
central in an advice network can increase their problem-solving ability in the center of
information and influence the level of social resources embedded in a network, in turn
raising individual developmental potential.
Consistent with Anderson et al. (1980), social capital is viewed as the opportunity to
use individuals’ human capital at work, and in turn to produce information and control
benefits which are beneficial to employee potential (Burt, 1997). This result confirms
the direct and significant impact of social capital on career outcomes, revealing social
capital’s relative importance compared to human capital.
The current study explains the positive impacts of social capital on career outcomes
in structural perspectives of network centrality. We also proposed an alternative model
to compare the indirect and direct impacts of human capital on developmental
potential, with no support found for direct effects of human capital on developmental
potential. It shed light on the direct and significant effects of social capital on
developmental potential (Brass, 1995), while human capital should translate into social
capital to get positive career outcomes (Friedman and Krackhardt, 1997). The more
central a network position that an individual occupies, the more access he/she has to
information and social resources, and, in turn, the more successful he/she is. Thus, it is
social capital that transforms human capital into workplace gains, e.g. producing
positive career outcomes and increasing supervisors’ perception of potential.
Specifically, the results of this study extend the research of Ibarra and Andrews
(1993) on social information processing, finding the effects of social network centrality
on others’ judgments. It appears that the central position employees occupy would not
only influence their attitude toward work and organizations, but also influence
supervisors’ perceptions. It is possible that when supervisors evaluate developmental
potential of employees, they will refer to behavioral cues such as networking or social
interaction, and not simply observable individual characteristics.
 JIC In addition, we only found that tenure and managerial rank have indirect positive
6,2 effects on developmental potential, while the other two human capital variables, age
and education, did not. According to Pennings et al. (1998), tenure and managerial rank
are different from education, which are regarded as firm-specific human capital.
Firm-specific human capital focuses on the investments in increasing professional
expertise in organizations, and tenure and managerial rank could represent the time
202 and effort employees invest in their human capital, specifically when they are in the
present organizations. Hence, the results emphasized that firm-specific human capital
can translate into social capital rather than general human capital.

Limitations
A few limitations of this study should be noted. The first concerns the validity and
reliability of our measures. Although common method variance was not an issue
because the social network and developmental potential rating data had different
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sources, aspects of the social context may have biased the subjective evaluation of
potential. At the same time, we used also single-item scales for social capital and
developmental potential. Although single-item scales are common in social network
research, it would be preferable in future research to use three or more items for each
measure so that reliability can be estimated. Thus, a possible alternative interpretation
of our findings is that centrality within the advice network is related to supervisors’
assessments of individual developmental potential, rather than to actual promotion.
Another associated limitation is that we measured social capital only by the advice
network, excluding other informal networks. Different informal networks have various
effects on individual career outcomes. For example, hindrances to network centrality
measuring negative network relations might represent negative social capital and
result in demotion or involuntary turnover. Future studies should explore the
multivariate model of career outcomes and social capital that includes positive and
negative network structure.
Finally, we need to be cautious about inferring a causal direction in our findings. It
is possible that career recognition produces centrality. For example, it is possible that
coworkers seek out high potential employees as sources of advice, thus enhancing their
central positions within social networks. To be certain of the causal direction,
additional longitudinal research is needed.
In summary, the path model tested in the current investigation represents an
attempt to test an integrated theory of social capital and career outcomes. Support for
our mediation model suggests that both social capital and careers literatures can be
enhanced through integration. It follows that future research on career outcomes would
benefit from the inclusion of social capital variables.

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Further reading
Prussia, G.E., Fugate, M. and Kinicki, A.J. (2001), “Explication of the coping goal construct:
implications for coping and re-employment”, Journal of Applied Psychology, Vol. 86 No. 6,
pp. 1179-90.