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It’s more complicated than we think: The implications of social capital on innovation

Asia Pacific Journal of Management volume 34, pages 649–674 (2017)Cite this article

Abstract

Researchers often focus on the positive implications of social capital, not recognizing that it may put the organizations at a competitive disadvantage if it limits access to other resources or discourages action. Based on findings from a large sample of Chinese manufacturers, the current study provides a more complete picture of the extent to which and under what conditions internal social capital fosters innovation and when it breaks down to limit performance. Results suggest a curvilinear relationship between internal social capital and innovation. Results also indicate that this curvilinear effect is strengthened by the extent to which employees share in the vision expressed by leaders. A moderation effect was also found with the extent to which there is alignment between the organization’s strategy and its human resource management (HRM). Innovation was greatest when both social capital and alignment were at moderate levels; a finding that suggests the HR department’s involvement in strategic planning, while necessary, may undermine the strategic flexibility needed for innovation when alignment is too great.

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Notes

  1. While this perspective is often used in an inter-firm context, it is likewise applicable to internal relationships since social capital is a property of relationships between individuals, groups, organizations, or communities (Burt, 1992; Inkpen & Tsang, 2005; Nahapiet & Ghoshal, 1998).

  2. Different from external social capital which tends to help with access to resources and knowledge that firms do not yet have and cannot develop on their own, an examination of the effect of internal social capital focuses on how social capital within firms helps them more efficiently and effectively utilize their existing resources.

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Acknowledgments

We would like to thank the Senior Editor Steven Lui and the anonymous reviewers for their helpful comments on earlier versions of the manuscript. This research was partly supported by a grant from NSF of China (No. 71232012) awarded to Zhong-Ming Wang. Support for this research was also provided by a sabbatical award from the University of Nevada, Las Vegas and a Lee Business School summer research grant awarded to the first author.

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Authors and Affiliations

  1. Department of Management, Entrepreneurship, & Technology, Lee Business School, University of Nevada, Las Vegas, 4505 Maryland Parkway, Las Vegas, NV, 89154, USA

    Sheng Wang

  2. Department of Management, Cameron School of Business, University of North Carolina, Wilmington, 601 S. College Road, Wilmington, NC, 28403-5664, USA

    Rebecca Guidice

  3. Department of Management, College of Business and Management, University of Illinois, Springfield, One University Plaza, Springfield, IL, 62703, USA

    Yuanyuan Zhou

  4. School of Management, Zhejiang University, 148 Tian Mu Shan Road, Hangzhou, Zhejiang, 310028, People’s Republic of China

    Zhong-Ming Wang

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Correspondence to Sheng Wang.

Appendix 1: Survey items

Appendix 1: Survey items

Social capital items (Subramaniam & Youndt, 2005):

  • Our employees are skilled at collaborating with one another to diagnose and solve problems.

  • Our employees share information and learn from one another.

  • Our employees interact and exchange ideas with people from different areas of the company.

  • Our employees partner with customers, suppliers, alliance partners, etc., to develop solutions.

  • Our employees apply knowledge from one area of the company to problems and opportunities that arise in another.

Shared vision items (Sinkula et al., 1997):

  • There is a commonality of purpose in my organization.

  • There is total agreement on our organizational vision across all levels, functions, and divisions.

  • All employees are committed to the goals of this organization.

  • Employees view themselves as partners in charting the direction of the organization.

Strategy-HRM alignment (Becker & Huselid, 1998):

  • To what degree is the HR department involved in your firm’s strategic planning process?

  • To what degree does your firm align business and HR strategies?

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Wang, S., Guidice, R., Zhou, Y. et al. It’s more complicated than we think: The implications of social capital on innovation. Asia Pac J Manag 34, 649–674 (2017). https://doi.org/10.1007/s10490-016-9491-y

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  • DOI: https://doi.org/10.1007/s10490-016-9491-y

Keywords

  • Innovation
  • Social capital
  • Shared vision
  • Strategy-HRM alignment
  • China

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