Reports

The Social Capital of the Top Marketing Team, Inter-firm Market Learning Capability, and Business Performance: A Test of a Mediating Model

Kwaku Atuahene-Gima, 2002, 02-118

To compete in an environment of rapid innovation, technological change, and market complexity, firms must invest in inter-firm relationships as a means of market learning and capability building. Yet current research views market learning as an internal firm-specific capability, and has neglected the role of marketing personnel in the process.

This report explores how the top marketing team's relationships with internal functions, and with managerial contacts in other firms, influence the organization's "inter-firm market learning capability" (defined as organizational processes for the acquisition, integration, and utilization of market information and knowledge that reside in other companies with which the firm has formal relationships). It also examines the effect of this capability on the organization's performance.

Study and Findings

In a survey of Australian manufacturing firms, the author finds:

  • Inter-firm market learning capability is related positively to business performance.
  • The top marketing team's "internal social capital" (that is, the degree of trust, reciprocity, and respect that exists between the team and other departments in the firm, and the team's willingness to seek advice and ideas from other people) is related positively to inter-firm market learning capability. 
  • Whereas inter-firm market learning capability fully mediates the positive effect of the top marketing team's network comfort on business performance, it partially mediates the positive effect of relational intensity. This suggests that inter-firm market learning capability is a critical conduit through which social capital of the top management team influences performance.

Related links

Harnessing the Marketing Team’s Social Capital (2003) [Article]

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  • Academic: FREE
  • Public: $18.00

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