Managerial social capital could exert valuable influences to firms' operating performance in social networks. Through the lens of structural hole theory, the relational rents of…
Abstract
Purpose
Managerial social capital could exert valuable influences to firms' operating performance in social networks. Through the lens of structural hole theory, the relational rents of managerial social capital partly results from certain controlling power endured by the network structure, thereby potentially signifying opportunistic behaviors once such relational rents are acquired at the cost of other parties' potential value loss. As such, it can be expected that using managerial social capital may inherently evoke a focal firm's high tendency of opportunism in its cooperative arrangement. This paper mainly aims at shedding lights on the opportunism implications of managerial social capital in the context of interorganizational relationships.
Design/methodology/approach
The authors collected data from 197 manufacturing joint ventures in China mainland.
Findings
Based on these sample Chinese‐foreign joint ventures, this paper found that member firms' managerial social capital tend to strengthen their opportunistic behaviors in special interfirm relationships, such that opportunistic behaviors mainly aim at taking control of the procedure of relation arrangement without significantly influencing relationship performance as well as its outcome distribution.
Originality/value
By demonstrating certain downsides of social capital, such that using social capital could induce opportunistic behaviors in interfirm relationships, it is expected that the study to contribute to both future social capital and joint venture research and business practices, especially to joint venture operations in China.
Details
Keywords
Strategic group has been intensively studied since this term emerged in 1970s, but previous studies have been limited to the comparisons between groups such as performance…
Abstract
Purpose
Strategic group has been intensively studied since this term emerged in 1970s, but previous studies have been limited to the comparisons between groups such as performance comparison. The purpose of this paper is to explore the internal structure of strategic groups by examining the effect of strategic distance from a firm to the center of its strategic group on firm performance.
Design/methodology/approach
The research is based on data acquired from the annual reports of listed companies and some Chinese domestic databases, including CSMAR Solution, WIND financial database, and China Core Newspapers Full-text Database. After grouping listed pharmaceutical companies in China over the period 2010-2011, the authors test three hypotheses by using fixed effect regressions.
Findings
The paper finds that the strategic distance from a firm to the center of its strategic group has a significant negative effect on the firm's financial performance. Two factors are discovered to influence that effect: corporate diversification strengthens the negative effect of strategic distance on performance, while firm's media visibility weakens that negative effect.
Originality/value
The findings reveal the relationship between intra-group strategic positioning and firm performance, and specify how firms can gain competitive advantage through positioning choices and strategic actions. This study promotes the establishment of a more comprehensive strategic group theory by revealing the structure within strategic groups.