Study On Effect Of Entrepreneurs’ Social Capital On Corporate Financial Performance Based On Competitive Strategy Perspective

The core issue of corporate strategic management is to explore the reason whydifferences exists in enterprises performances, corporate strategic choices, and theimplementation effects of these strategies,in order to find out the formula to enhancecorporate performance. Scholars of strategic management field have done a great deal ofresearch, such as Porter’s industrial economics, resource-oriented theory and so on. But thereare also major defects in these studies, that is, the organization are considered as an abstractand rational individual, which can not provide micro explanation for corporate strategicchoices and the successful implementation of these strategies..The Upper echelon, andvancedby Hambrick and Mason,compensates for this defect to some extent, they believe thatcorporate executives is the key influencers and advocates of the company, and suggest findingthe micro explanation of differences in enterprise performance and strategic choice from thesepeople’s psychological characteristics. However, the high-level theory is based primarily onpsychology, it focus too much on individual psychological characteristics that it neglectindividual external social attributes.In fact, whether entrepreneurs or senior managers, are embedded in a specific networkof social relations. Entrepreneur, as the strategic decision maker of the company, its socialcapital is a key factor in gaining access to resources, so it’s bound to have an importanteffect on the implementation of corporate strategy. Including entrepreneurial social capital inthe framework of strategic management research has become a realistic needs. Also, there arefew research studying the mechanisms of action that entrepreneurial social capital influencesenterprise performance.Therefore, with theoretical guidance of Resource-based View, wefirst define entrepreneurial social capital as the embedded network of social relations ofentrepreneur from which they can get actual and potential resources on the basis of therelevant research,and divide it six dimensions：political social capital, market social capital,finance social capital, technology social capital, reputation social capital and internal socialcapital. Then we construct a theoretical model reflecting the relationship betweenentrepreneurial social capital, competitive strategy and corporate financial performanceaccording to the research paradigm of "resource-strategy-performance", and put out theresearch hypothesis of this paper. We also design an relatively comprehensive indicatorssystem using the content analysis method and financial data. Finally, empirical tests by SPSSfor these hypotheses are conducted, using the data of236listing company in manufacturingindustry from2009to2011in Shanghai stock exchange. Through a series of studies of this paper, the conclusions are as following：market socialcapital, finance social capital, technology social capital，reputation social capital and internalsocial capital of entrepreneur have significantly positive influence on the successfulrealization of low-cost strategy, while political social capital has no apparent correlation withit. And the positive influence of entrepreneurial technology social capital，internal socialcapital are higher than that of political social capital，financial social capital，markets socialcapital and reputation social capital. Political social capital, market social capital, technologysocial capital, reputation social capital and internal social capital of entrepreneur havesignificantly positive influence on the successful realization of differentiation strategy, whilefinance social capital does not show significant correlation with it. And the positive influenceof entrepreneurial market social capital，technology social capital，reputation social capitaland internal social capital on differentiation strategy are higher than that of political socialcapital and finance social capital on differentiation strategy. The two basic competitivestrategies can both enhance short-term and long-term financial performance, but the financialperformance through differentiation strategy is superior to that through low-cost strategy. Thetwo competitive strategies play an intermediary role between entrepreneur social capital andcorporate financial performance.