Social Capital integrative and coordinative Mechanism of Global Sourcing Activities

Abstract

In an environment of globalized markets and changing rules of competition companies need to be proactive in the management of their sourcing plans on global basis. Successful execution of global sourcing requires achieving integration and coordination of spatially dispersed production units as well as attaining global level interface among manufacturing, R&D and marketing functions. Social capital - or individuals’ relationships and the assets embedded in those relationships - can be seen as informal mechanism achieving integrative objectives in global settings. Thus, the purpose of the study is to explore and elucidate how social capital can be utilized as a coordinative and integrative mechanism of global sourcing activities. Findings indicate that social capital plays a key role in that respect by providing effective network configuration with boundary spanners being vital elements; further, by providing trustful relationships enabling collaborative action; last, by providing the basis for shared among the parties’ cognitive paradigm. Overall, social capital can be considered effective tool used to reconcile differences resulting from specialization and capitalize on the existent diversity, thus, achieving the ultimate objective of globally sourcing organizations.