The study of social capital as an organizational phenomenon is receiving growing interest. Defined as “the character of social relationships within the organization, realized through members’ levels of collective goal orientation and shared trust” (Leana and Van Buren, 1999, p. 540), organizational social capital (hereafter referred to as OSC) has been a critical resource that benefits the organization’s access to external resources (Hitt et al., 2002) and facilitation of internal coordination (Sirmon et al., 2007). In addition, as one of the most enduring organizational resources, OSC has been pivotal in shaping an organization’s effectiveness through a reduction of transaction costs, facilitation of information flow, and knowledge creation (Lin et al., 2001; Nahapiet and Ghoshal, 1998). Since this resource is so intertwined within the organization, OSC cannot be easily traded in an open market or exchanged from one social system to another (Nahapiet and Ghoshal, 1998). Although OSC development and sustenance is a main function of human resource management (HRM) (Delery and Roumpi, 2017) and research on OSC cannot be separated from the field of HRM (Nahapiet and Ghoshal, 1998), research in this domain has not received the deserved attention it should in mainstream HRM literature. OSC, as core building block of HRM, is generally perceived as a distinctive approach to managing people that seeks to achieve competitive advantage through the strategic development of a highly committed and capable workforce (Huselid, 1995; Youndt et al., 1996). In order to compete in today’s globalized world, organizations have to develop their human capital to make their HR practices more effective (Delaney and Huselid, 1996). Consistent with this argument, Youndt et al. (1996) also pointed out that employee’s skill acquisition and development could be promoted through OSC development, which is a critical function of HR. Despite its significance for organizations’ survival and growth (i.e. Adler and Kwon, 2002; Coleman, 1988; Phelps et al., 2012), investigating how OSC emerges has remained relatively uncharted territory (Adler and Kwon, 2002; Bolino et al., 2002; Hodson, 2005). In response, the efforts of this paper will center on examining how leadership (i.e. transformational leadership, hereafter TL) enables the activation of OSC. Whereas previous research on OSC focused on how organizations design formal mechanisms and policies that help to foster OSC, this same research has offered limited insights into how leadership could facilitate OSC (Bolino et al., 2002). In response, several scholars started to explore how managerial behaviors can influence OSC’s formation (e.g. Li et al., 2014; Johnson et al., 2013). Drawing from these studies, it is evident that leadership has a formative influence on OSC, yet these same inquiries have ignored the underlying mechanisms that explain how leadership helps to establish OSC. Leadership is one of the key driving forces and a potent source for attaining sustained competitive advantage (Avolio, 1999) for firms. A central construct in leadership theories (Chi and Pan, 2012; To et al., 2015) this study will focus on TL. This “relationship-oriented” leadership style characterized by idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration (Bass, 1985) positively influences a wide range of organizationally important outcomes including organizational commitment, individual performance (Banks et al., 2016; Chi and Pan, 2012; Van Knippenberg and Sitkin, 2013), creativity, turnover intentions, and extra-role behaviors ( Judge and Piccolo, 2004; Lowe et al., 1996; To et al., 2015; Tse et al., 2013).