Value creation through relationship management in supply chains: a social capital perspective

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School of Business | Bachelor's thesis
Degree programme
Tieto- ja palvelujohtaminen
The business world is changing towards complexity and most businesses are parts of multiple different relationships. Well managed relationships create value in many ways but this research deals with social capital perspective. Social capital refers to the valuable assets that stems from the existing relationships with external partners. Lengthening supply chains and today’s accelerating competition make the approach essential especially in the supply chain context. More traditional, transactional value is not enough anymore, and value creation should be sought from new sources. Developing the social capital of relationships has a vast effect on a firm’s performance. Companies can create value through improving operational performance but also the performance of relationships which has been less discussed in the past academic literature. Utilization of social capital perspective can result in, innovations, enhanced inter-organizational learning, better satisfaction with external relationships, improved operational excellence, and many other valuable improvements. Literature expresses that social capital can be built mainly through creating trust and commitment and integrating supply chains. The practical implementation of activities that are leading to these desired results are, however, relatively less discussed. Negative issues of social capital, like raising opportunism, are expressed and they are in a critical role for managers to consider if the social capital perspective is implemented in the company. To create new concrete suggestions for managers about the practical activities of building social capital more empirical studies are needed. The thesis gathers the existing practicalities of building social capital but also it gives the direction for future research.
Thesis advisor
Kim, Seongtae
relationship management, social capital, value creation, supply chain
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