How to build social capital with leadership development: Lessons from an explorative case study of a multibusiness firm

The organizational impact of leadership development practices is still not fully understood. Research confirms that in some cases effects can be found and in others not. Most of these attempts search for contribution to a company's human capital. A contribution to social capital development remains an unexplored source of variance in understanding how leadership development impacts organizational performance. This paper therefore explores—from a strategic management perspective—how leadership development practices may contribute to social capital development. We chose the strategic context of a large multibusiness firm in which social capital across business units play an important role for competitive advantage. The exploratory case study reveals that: 1) Social capital differs regarding its intensity and develops through stages characterized by contact, assimilation, and identification experiences. 2) Leadership development practices differ in their potential contribution to social capital development stages and should therefore be designed accordingly.