The Relationship Between Social Capital And Corporate Diversification Strategy

Enterprise’s top management team make the enterprise strategic decision together, according to Social capital theory, the top management team can get scarce resources through embedded in social relations network, which is the social capital of top management team. According to Resource dependence theory, the development of the enterprise need the resources from the external environment, when the enterprise implementing the diversification strategy, it requires resources such as capital, technology, market information and so on. An effective way for enterprises to obtain these resources is the social relation network of top management team. In the Chinese tradition, the "relationship" is important, through the "relationship" we can get kinds of resources, Especially China is in economic transition period, the system of market economy is still imperfect, government intervention has important influence on the allocation of resources. Companies can get government support through the contact between the top management team and government agencies, such as investment subsidies and tax breaks, subsidized loans and other preferential policies. The top management team can get resources not only through political networks, but also through other networks. For example, they get information of other industries from the alumni, and they can also get technology resources by joining the association or other social groups, which has important influence for enterprises to carry out the strategy of diversification. What influence does the social capital of top management team has to the diversification strategy, whether different types of social capital will have an impact on the diversification strategy, and in different areas of economic development, whether the impact of top management team social capital on diversification is different. For solving those problems. This paper selects IT enterprises, which are listed in Shanghai and Shenzhen,as the object of study, conducting a research on the influence of the social capital of the top management team on the diversification strategy.In this article, collecting data from wind database and annual reports, and using SPSS20.0 to analyze the data. Drawing the following conclusions, The political social capital and the campus social capital of the top management team have a significant positive impact on the degree of diversification, but honor social capital of top management team has a significant negative impact on the degree of diversification, and the public social capital of top management team has no significant influence on the degree of diversification. In addition, the region of enterprise has a moderating effect on the relationship between the social capital of top management team and enterprise diversification.Finally, according to the results of the research, this paper verifies and supplements the existing research. Providing guidance for managers to strengthen their social capital and enterprises to choose the right managers. It also has a certain reference value for other industries.