Reply 1 for week 4

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Running head: WEEK 4 REFLECTION AND DISCUSSION 1

Week 4-Reply to Ivana

This week’s material had plenty of useful information to offer, and it was really difficult to determine what was the most important to me out of all the concepts and terms presented. However, my pick for this week’s post is the term intellectual capital, which represents the difference between the market value and the book value of a company (Dess, McNamara, Eisner, & Lee, 2021). The assets that are included in this differentiation are intangible, such as employee loyalty and commitment, the organization-consumer relationship, the employees’ skills and experience, the reputation and brand image and such. I chose this as the most valuable information because I have come to realize that nowadays the tangible resources do not make as big of a difference as much as certain intangible resources do. Having an amazing workforce, people who are motivated, skilled, eager to learn and to invest themselves in order to achieve their individual as well as organizational goals, is what essentially makes a difference between a company and its competitors (Dess, McNamara, Eisner, & Lee, 2021).

The term of social capital in simple words signifies the network of friendships and work relationships between people not only inside, but also outside of the organization (Dess, McNamara, Eisner, & Lee, 2021). The best thing about the social capital is that it includes a lot more than just relationships between coworkers, it includes the relationships that organizations have with their suppliers, customers, and their partners. It represents the power of the connection and networking and it significantly adds to the competitive advantage.

Social capital is what provides access to resources embedded in social relationships. Social capital theory is broken down into three main concepts, the first of these concepts being resource. A resource is anything that allows an induvial to get something. For example, this resource could be a person of influence, a piece of software, or any other kind of tangible help a person could possess. The main part of this category that I found to be the most interesting was the social networking aspect of resource. A person ability to network among friends and friends of friends, allows you to build connections which could, for example, offer up a new business venture, or find a first potential customer (Dess, McNamara, Eisner, & Lee, 2021). The second concept of social capital is structure of network, or topology. This looks at the accessibility of people to each other. The suggestion being that through networking within social groups, an individual can reach more powerful connections from exploiting their social resources. The third concept is nature of relationship, this looks at the quality of the resources available to a person (Dess, McNamara, Eisner, & Lee, 2021). Relationship strength of those within a person’s social resources, can dictate the influence or strength of influence they may offer as a resource.

Amazon is a company that I believe represents an example where its social capital significantly contributes to its competitive advantage. Amazon has created a very solid and strong relationship with their consumers, which was built over the years through great strategic marketing efforts, as well as consistent improvements and great product and service (Dess, McNamara, Eisner, & Lee, 2021). However, Amazon has gone further than that and ensured they have a unique relationship with their suppliers, who provide a great array of products which eventually brings a competitive advantage over other similar companies in the industry. Lastly, I believe Amazon has done un unbelievable job creating a great network and connection with their partners, providing only the best products, most affordable prices, and a quick distribution to their consumers. It is clear that Amazon has done everything in its power to provide the best experience for their consumers and achieve success by using social capital as a strategy to differentiate itself from the competitors in the industry.

References:

Dess, G., McNamara, G., Eisner, A., & Lee, S. H. (2021). Strategic Management: Creating Competitive Advantages (10th edition). McGraw-Hill Higher Education.