Impact of Social Capital on Supply Chain Performance: The Role of Information Flow

The purpose of this paper is to understand how social capital from buyer and suppliers’ perspective effect the performance of the supply chain when information (inflow & outflow) plays a critical role. How social capital enhances the perception of the buyer supplier relationship and their understanding while sharing both ways information inflow & outflow. This change in the perception and how it effects the performance of the supply chain. Also, how social capital plays its role in order to resolve this perceptual difference. With the help of literature review, the buildup of theoretical model and hypothesis was developed. Using the data from 150 respondents collected from many different Pakistani industry manufacturers especially in supply chains and people relate with service industry. For analysis we used structural equation modelling. All of the social capital facets are significant with relation to information inflow, however, with relation to information outflow, structural capital, and performance of the supply chain are not significant. It clearly shows that buyers are more efficient in collection of information, but more reluctant in sharing back (information outflow) with the suppliers. With our results, it shows that buyers should maintain strong social capital and should rely on sharing more information within organization and outside with suppliers, this will enhance, trust, efficacy and will promote performance of the supply chain. Paper develops a framework to test the effect of social capital dimensions on overall supply chain performance where information flow is used as a mechanism facilitating the supply chain performance. This framework has never been tested before. Contribution of the studies and future research has been discussed.