Social Capital, Knowledge Acquisition and Value-Creation for Business Performance

This study examines the interrelationships among structural and relational dimensions of social capital, and patterns of knowledge acquisition and value-creation, using data collected from 208 managers and executives of Malaysian SMEs. Structural embeddedness is measured in terms of perceived ties, frequency of interactions, and time spent with networks. Relational embeddedness is evaluated with respect to closeness, personal familiarity, certainty, and confidence towards other network players. Both structural and relational embeddedness of social capital are related significantly to the extent of intra- and inter-organizational knowledge acquisition and value-creation, which in turn impact significantly on business performance. Findings suggest that employees of SMEs are emboldened by the provision of networking options that are relevant for creating and adding business value in the long term; and that organizational structures must be suitable for reaching external market contacts and absorbing external knowledge for organizational change