Social Capital Theory In Globalization

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In this increasingly globalized world, there is an urgent need for the companies and organizations to globalized internationally and cross-border to survive independently. Besides, the practise of employing expatriates seems to be the stategic move of Multinational Corporation (MNC) to increase the international experience and knowledge base of the present and future managers (Boyacigiller, 1991). Moreover, the continuing growth and expansion of international operations abroad incident to globalization causes the multinational corporations (MNCs) and the prevailing management literature to focus primarily on the role played by MNC home country expatriates in achieving foreign operation success, at the stark neglect of host country nationals…show more content…
As knowledge transfer happens among interactions among people who are in various social relationships (Yli-Renko, 2001), a new stream of knowledge transfer involving the properties of social system relationships are encompassed under the concept of social capital (Argote et al., 2003). Social capital is an accompaniment to human capital and physical capital which share the same social fundamental to those factors that bring about positive economic value of organizations (Putnam, 1993). Therefore, social capital theory is concerned to have linkages to sources for social action (Audretsch & Aldridge, 2012; Burt, 1992; Coleman,…show more content…
Shared vision is one of the social capital factors and is considered as a cognitive element of the factor. This includes shared representations, interpretations and systems of meaning among parties (Cicourel, 1973 cited in Hsu, 2012). Eventually, this will lead to a common understanding of collective goals and proper ways of acting in social system (Tsai & Ghoshal, 1998). Trust is all about the expectation that one’s exchange parties would act benevolently and not opportunistically within a relationship (Nahapiet & Ghoshal, 1998). It is also a willingness act of one party to susceptible exposed to the actions of another party and it is a method of accessing information direct or indirectly (Mayer et al., 1995; Shapiro, 1987). Trust will speed the knowledge transfer as it increase commitment for both parties to help and understand the new external knowledge (Kang & Sauk Hau, 2014; Lane et al., 2001) and facilitate openness in communication (Kang & Sauk Hau, 2014; Nahapiet & Ghoshal, 1998; Tsai & Ghoshal,

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