Firm Performance-A Social Networks Perspective

Abstract

<b>Problem statement:</b> The study aims to offer a discussion on social networks and their effect on firm performance and also to illustrate the ways by which the firms utilize social capital through networks. <b>Approach:</b> The literature review and arguments were conducted to provide a systematic discussion of social networks and their effects. <b> Results:</b> The study had provided with a detailed understanding of the strategies that had been found to be highly significant in successful organizational performance. The results of this discussion suggested that social networks affect firm performance in a positive manner and can contribute to sustainable competitive advantage. <b>Conclusion:</b> It confirms that building up of social networks for big and small firms provides valuable links and solves numerous issues which auger well for the companies and should be treated with great importance

How intra-organizational social capital influences employee performance

“…External social capital is created by the interactions of the stakeholders, the CEO, and the top management team, with external entities that influence the organization, such as competitors, investors, clients, suppliers, and other third parties (Kapucu and Demiroz, 2015). The benefits of external social capital are financial investment in the organization (Florin et al , 2003; Tung, 2012), a positive reputation and improved organizational performance (Leana and Van Buren, 1999), and competitive advantage (Galunic et al , 2012).…”

Three levels of organizational social capital and their connection to performance

“…Nicholson et al (2004) claimed that scholars studying the resource dependence role of boards should consider using measures of interpersonal links, as well as traditional measures of inter-firm links. To sum up, the benefits of external SC are financial investment in the organization (Florin et al, 2003;Tung, 2012), a positive reputation, improved organizational performance (Leana and Van Buren, 1999), and competitive advantage (Galunic et al, 2012). Zhao and Roper (2011) claimed that external SC is a type of personal SC.…”

“…Following the first two levels of SC, the level of external SC should impact the bottom line of the organization. Actually, most of the researchers who are investigating this level are looking for outcomes, such as Tung (2012), who claimed that external SC magnifies the benefits from marketing and gives considerable competitive advantage (Florin et al, 2003).…”