Building Social Capital With It And Collaboration In Supply Chains: An Empirical Investigation

The importance of managing the extended enterprise is a recurrent theme, and many consider supply chains to be the next frontier of opportunities to improve profitability and competitive advantage for organizations. Building on prior work that has identified the value creation capabilities of integrated digital platforms and relational conditions, the paper draws upon social capital theory to develop an organizing framework for developing supply chain integration capabilities. We assert that both IT and relational capabilities constitute the social capital available to firms in the supply network and draw upon Nahapiet and Ghosal’s (1998) work to identify the specific facets structural, relational and cognitive social capital that are relevant in the context of supply chain integration. This framework enables us to evaluate structural relational and cognitive social capital as a platform for managing collective action and as a source of creating and sharing knowledge. A research model is developed and empirically validated that investigates the impact of different facets of social capital on supply chain integration, and subsequently supply chain integration on firm performance. Data from 110 manufacturing and retail firms was used to test the model to provide empirical support for the proposed research model.