Social Capital Management in the Supply Chain

1 The importance and role of social capital in the supply chain 

Sinclaire and Siemieniach (quoted in Knolmayer, Martens and Zeier 2002, p. 16) indicate that the following factors are important in building cooperation between and among companies  

Partnership is founded on the trust most often developed during longterm contacts between companies and is based on the generally known, positive market opinion of the company. 

EP IC TC low in general EP IC TC high in general EP IC TC gradually lower Normal market relations Vertical integration Strategic supply network 

Notes EP = external prices of selected actions paid by the company IC = Internal costs of selected actions TC = transactional costs.  

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In this chapter, the author has attempted to prove there is a practicable method for controlling the influence of the environment s social capital, as well as the social capital of individual companies, on the operation of supply chains. This method consists in conscious, organised and consistent social capital management at the supply chain level. It refers to the social capital of the environment, of the companies, and of the supply chain itself, as it is a specific social binder of integrating initiatives. The results of the research presented herein are promising. Even if almost half of the respondents show little interest in social capital today, the majority appreciate its importance in building future competitive advantage. 

A supply chain, considered subjectively as a group of companies and objectively as a group of processes and resources, is influenced by the two aforementioned categories of social capital (social capital of the environment and social capital of companies comprising the supply chain). This means, when managing a supply chain, that one needs to take accoimt of social capital both in the assessment and in the planning and verification of actions undertaken in the chain. Unfortunately, as observation of market behaviours and research carried out by the authors show, companies are not interested in the level and type of social capital in any dimension. Meanwhile, environmental social capital does form the background of many decisions undertaken in the supply chain, and the... 

The identification of the level of social capital in the supply chain s environment may determine the choice of how to configure the chain, expected expenditures and the effects of its operation. At this level of aggregation, social capital is a significant background for supply chain management. Thus, the impact of the level of social capital in-group and individualistic cultures on the dominant relationships in supply chains is presented in Table 7.3. 

The screening tests during indirect reasoning showed the considerable importance of social capital in undertaking initiatives in supply chain management. The companies researched indicated that the lack of trust and commitment of collaborators in the supply chain and ensuing restrictions in access to data, as well as the growing uncertainty of business operations were a major barrier to the implementation of actions towards improvement. 

When discussing these limitations, associated with little interest in social capital on the basis of the theory and practice of supply chain management, it is worth analysing all dimensions of social capital affecting supply chain management. This means that it is necessary to refer to both the macroeconomic approach to social capital, wherein it constitutes external conditioning of supply chain operation, and the microeconomic approach (social capital of the supply chain itself and individual companies), in which social capital forms a part of internal supply chain potential. 

Despite these limitations, the authors managed to establish some dialogue with Polish companies regarding the social capital of their supply chains. Questions regarding social capital were included in a questionnaire used in the second stage of the fundamental study -the final study (see Introduction). The questions regarding the supply chain s social capital were used both in the questionnaire drawn up for the purposes of the computer-assisted telephone interview (CATI) and in the questionnaire prepared for the face-to-face interview. 

As the deliberations presented herein show, a supply chain s social capital is not much discussed in theory or applied in business practice. It seems that tradition and the effective promotion of the macroeconomic approach to social capital have dominated the application of any relevant theories in practice in the public sector. This is probably why social capital is regarded by business environments as an unknown and uncontrollable external factor of company and supply chain operation. A similar situation is found with respect to the social capital of companies. It was concluded, too quickly and easily, that this invisible resource of individual organisations could not be accurately measured, and that one could therefore not influence its structure or level in order to adjust it to the needs of supply chain management. 

The supply chain s social capital should be managed in a conscious, organised, and consistent way. 

It is necessary to use both a macroeconomic and a microeconomic approach to social capital. All dimensions of social capital affect supply chain management. Social capital in macroeconomic perspective constitutes external conditions of supply chain operations. A microeconomic perception of social capital refers to the social capital of the supply chain itself and individual companies. It forms a part of internal supply chain potential. Social capital seems to be a binder of supply chain initiatives. Due to its large scale and the strength of its impact one should consider social capital as one of the factors influencing the selection of supply chain configuration with costs of operation and perspectives for future development in mind. 

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