May 7, 2014
If you’ve been in the outsource industry for more than five minutes you probably know that buyer-seller relationships are, well, complicated. And just when you think you have the collaboration thing nailed, more complications can ensue.
Verónica H. Villena (assistant professor of supply chain, Pennsylvania State University), Elena Revilla (professor of operations, Instituto de Empresa Business School), and Thomas Y. Choi (professor of supply chain management at Arizona State University), in a 2010 Journal of Operations Management article, found that there’s both a bright and a dark side to highly collaborative relationships.
First: I want to say kudos to the trio for their work to define the term “social capital.” They define social capital as a value asset stemming from access to resources made available through social relationships across three dimensions: cognitive (e.g., shared culture and goals), relational (e.g., trust, friendship, respect, and reciprocity), and structural (e.g., social ties). Villena, Revilla and Choi show that each of these social capital components have the power to positively influence performance outcomes.
Their findings show:
- The strength of social relations (relational capital) has a higher marginal effect on performance than the frequency and diversity of contacts (structural capital)
- A shared vision (cognitive capital) has a positive linear relationship with performance.