The Mechanism Of How Entrepreneurial Social Capital Affects Strategic Decision Making Outcomes

Since French sociologist P.Bourdieu propose the concept of social capital,social capital has become a cross-disciplinary theory,which involved in sociology,political science,economics,and management science.One of the popular research subjects these days is the application of social capital theory in strategic management practice.The main focus is how CEO or top management team(TMT)'s social capital affects the strategic content,such as competitive strategy,diversification or merger and acquisition.But it has been rarely seen any research focusing on the relationship between entrepreneurial social capital and strategic process(e.g.strategic decision making or implementation of strategy).Therefore,the main subject of this research is the mechanism of how entrepreneurial social capital can influence firm's strategic decision making-specifically,how entrepreneurial social capital affects strategic decision outcomes through strategic decision process.On the basis of literature review,this research constructs the model of relationship between entrepreneurial social capital,strategic decision process,and strategic decision outcomes.An empirical test is also conducted to testify the above relationships,in order to offer enterprises practical suggestions on improving the effects of strategic decisions.There are three main concepts in this research:entrepreneurial social capital,strategic decision process,and strategic decision outcomes.Entrepreneurial social capital is defined as entrepreneur's social network based on trust and norms,and the ability to access resources embedded in the network.Strategic decision process is defined as the steps,phases,and paths that are taken to form strategic solution of strategic problems.The main characteristics of strategic process are rationality and conflict.Strategic decision outcomes means indicators that directly link to strategic decision process to evaluate the successfulness of strategic decision making.They are "process outcomes",not financial outcomes,which can more accurately reflect the effect of how strategic decision making helps firms to achieve strategic goals.Since the measurement scale used in this research is mainly adopted from foreign articles,I use practical and multi-item scale as possible to measure each variable.The data in this research is collected by paper and electronic questionnaires from 218 enterprises in Nanjing High-tech Developing Zone,Jiangning Economic and Technological Development Zone,Nanjing Economic and Technological Development Zone,Jiangsu Software Zone,Chuzhou Economic and Technological Development Zone,and Nanchuan Industrial Zone of Xining Economic and Technological Development Zone.After analyzing reliability and validity of the questionnaire,the methods of structural equation model and hierarchical regression analysis are adopted to analyze the data and testify the hypotheses.The conclusions of this research are as follow:First,in terms of concepts defining,entrepreneurial social capital consists of three dimensions:market social capital,institutional social capital,and supportive social capital;strategic decision process consists of two dimensions:procedural rationality and decision conflict;strategic decision outcomes consists of two dimensions:decision quality and decision speed.Second,individual dimensions of entrepreneurial social capital show notably effect on strategic decision outcomes.Market social capital shows significant effect on both procedural rationality and decision conflict;institutional social capital shows significant effect on decision conflict but no effect on procedural rationality;supportive social capital shows significant effect on both procedural rationality and decision conflict.Entrepreneurial market,institutional and supportive social capital show significant effect on both decision quality and decision speed.Third,strategic decision process shows certain mediating effect on relationship between entrepreneurial social capital and strategic decision outcomes.Specifically,procedural rationality plays part of the mediating role between market social capital and decision quality,but shows non-significant mediating effect on relationship between market social capital and decision speed;it plays part of the mediating role between institutional social capital and decision speed,but shows non-significant mediating effect on relationship between institutional social capital and decision quality;it plays part of the mediating role between supportive social capital and both of decision quality and speed.Decision conflict shows non-significant mediating effect on relationships between market social capital and both decision quality and speed;it shows part of the mediating effect on relationships between institutional social capital and both decision quality and speed;it also shows part of the mediating effect on relationships between institutional social capital and both decision quality and speed.This research provides certain theoretical value and practical suggestions by revealing the relationship between entrepreneurial social capital and strategic decision outcomes from the perspective of strategic decision process.It not only supplements and enriches the current research on entrepreneurial social capital and strategic process,but also illustrates the mechanism of how entrepreneurial social capital affects strategic decision process and outcomes.For management practice,leaders of enterprises should effectively accumulate their social capital in order to rationally analyze strategic environment,collect information and resources,and resolve conflict during the process of strategic decision making,therefore the effect of strategic decision making can be achieved.