As organizations grow in size, geographical scope, and complexity, it is increasingly apparent that sponsorship and support of communities of practice—groups whose members regularly engage in sharing and learning, based on common interests—can improve organizational performance. Although many authors assert that communities of practice create organizational value, there has been relatively little systematic study of the linkage between community outcomes and the underlying social mechanisms that are at work. To build an understanding of how communities of practice create organizational value, we suggest thinking of a community as an engine for the development of social capital. We argue that the social capital resident in communities of practice leads to behavioral changes, which in turn positively influence business performance. We identify four specific performance outcomes associated with the communities of practice we studied and link these outcomes to the basic dimensions of social capital. These dimensions include connections among practitioners who may or may not be co-located, relationships that build a sense of trust and mutual obligation, and a common language and context that can be shared by community members. Our conclusions are based on a study of seven organizations where communities of practice are acknowledged to be creating value.
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