Effects of the physical work environment on the creation of individual‐ and group‐level social capital

Purpose – The aim of this article is to examine how office designs influence social capital or the value inherent in relationships. More specifically, this article attempts to better understand the level to which the value of social capital accrues, either to the individual or to the group. Design/methodology/approach – The authors review theoretical and empirical research on the physical work environment and social capital to develop propositions that relate the effects of open office environments on the development of group‐ and individual‐level social capital. Findings – It is argued that an open‐office environment, defined as an office design that attempts to maximize functional communication among organization members by removing physical barriers that hinder the flow of work and communications, can positively affect the development of social capital within an organization. Specifically, it is suggested that open office designs will foster the development of group‐level social capital (i.e. social capital that benefits the group, the result of network closure) but reduce individual‐level social capital (i.e. social capital that benefits individuals who connect otherwise unconnected groups in the network, or structural holes). Practical implications – By effectively managing the physical work environment, organizations can better control and/or influence the frequency and nature of interactions between employees, which may result in desirable outcomes for both the organization and employees. Originality/value – The article integrates two streams of literature – social capital and physical work environment – and will be of interest to researchers in both literature groups. In addition, office managers and designers can benefit from the discussion in an effort to foster group level social capital.