Relationship Between The Top Martagement Team Social Capital,Strategic Change And Corporate Performance

With the deepening of economic globalization, enterprises are facing increasingly fierce market competition. The enterprises which are depending only on their internal limited resources have been unable to meet the needs of living and development. Faced with this new situation, in business management academia, researching on social capital has become a hot topic. From the social capital perspective, the key to improving business performance is to access to beneficial resources through external links. Therefore, An empirical study on issues that how the corporate social capital enhance performance through increasing resources which acquired from outside has high social value.The concept of social capital was first introduced to the field of sociology by the famous French sociologist Pierre Bourdieu, and it subsequently demonstrated a strong explanatory power, and highly valued by researchers of sociology, management and economics.In recent years, the study of corporate performance through the perspective of social capital or social network is playing an increasingly important role, Many researchers showed a great deal of concern about the relationship between corporate social capital and business performance. A point worth mentioning is that a lot of research on the relationship between Corporate Social Capital and Enterprise Performance is mostly around the personal relationship network of executives, and it is inseparable that executives play a key role in corporate strategic decision-making and strategic implementation process.On the one hand, the paper argues that it is not enough to focus only on the individual’s social capital of executives (Chairman of the Board or corporate persons), the entire top management team has an important impact on the strategic decision-making and strategic performance. Therefore, this study introduces the concept of "Top Management Team" in the top echelon theory, and draws on the concept of TMT social capital from Shipilov and Danis. On the other hand, executive social capital, will not only has a direct impact on corporate performance, but also has an indirect effect on corporate performance with the company’s strategic choice. The executive social capital contains two important conditions of strategic change:the types of resources used to change the various elements of the business organization and corporate strategy content; mobilization and the ability to reconfigure these resources. According to the theory of the resource-based view, resource generating capability, capacity can affect the performance of a comparative advantage. Therefore, the paper argues that it is necessary to put strategic change into the research framework, which is rare in existing research, and this is also the innovation in this paper. The paper adds the proportion of state-owned shares to examine its impact on the model, and it can also guide the different nature of the commercial banks.Comprehensive financial reform that began in April2012, the price reform of the RMB, property rights reform of breaking the long-term monopoly of state-owned financial institutions, and the reform of the RMB internationalization exacerbate the intensity of competition in the financial market. The soon-to-start Market-oriented interest rate will have a significant impact on the interest rates decision the interest rate transmission、the term structure of interest rates and interest rate management in commercial banks of China. How to allow commercial banks adapt to market changes, and start strategic change, it offers the TMT higher requirements. Therefore, we use Chinese commercial banks to study the relationship between the TMT social capital, strategic change and corporate performance.I first read the latest literature at home and abroad extensively, through the analysis of the hot topics and new areas of research in recent years, and combined with the mentor’s research project to determine the topic. Secondly, according to the direction of my topic, I collected the relevant domestic and foreign literature, and write literature review. Third, based on the literature review and the material collected, I determined the outline of the thesis and empirical analysis model. Fourth, I collected empirical data, and did summary and analysis. Fifth, I finished this paper according to the results of the data and empirical analysis, and made recommendations.This paper is divided into six parts, the first part is the introduction. The second part is the literature review and theoretical basis. The third part is a theoretical model and assumptions.The fourth part is the study design. The fifth part is the empirical analysis. The sixth part is conclusion and outlook.In this study, a combination of the methods of measurement used in the existing empirical research, according to the data characteristics of the commercial banks, the concept of executives social capital is divided into three indicators: executives longitudinal relationship network、executives lateral relationship network and executives social relationship network. I collect panel data of commercial banks for the period2005-2011. I used statistical software such as SPSS and STATA made descriptive statistical analysis, correlation analysis, factor analysis, multiple regression analysis, and I analyzed the results with the following conclusions:First, the TMT social capital has become an important factor to improve enterprise performance, the executive social capital is positively correlated with corporate performance in general; executive longitudinal network of relationship is negatively correlated with corporate performance; executive horizontal network of relationship is positively related with corporate performance; the executive social network is positively related with corporate performance. The executive team of social capital can help companies to establish contact with organizations and departments, and keep on getting the needs of a variety of resources for business development, and enhance the ability of enterprises to mobilize and configure these resources. And it plays a positive role in promoting enterprise performance. However, executive longitudinal network of relationship is negatively correlated with corporate performance, for the reason of "MIAN ZI", there will be a certain degree of obstruction to the executive who with a government background. At the same time, to maintain a relationship with the government takes a larger cost. So the executive longitudinal relationship network will reduce the corporate performance.Second, strategic change has a mediating effect between TMT social capital and business performance. The empirical results show that:the TMT social capital has a positive impact on business performance; TMT social capital has a positive impact on strategic change; strategic change have a positive impact on business performance; social capital and strategic change together has a positive impact on business performance. The mediating effect strategic change has been validated, means that the TMT social capital will not only directly affect corporate performance but also will indirectly affect business performance through strategic change. In addition, executive longitudinal relationship network has a negative impact on strategic change, means that the high strength of the longitudinal network relationship will lead the TMT to generate awareness about strategic change inert, and the vested interests in the longitudinal network relationship will produce impediment on strategic change, eventually leading the negative effects of the executives longitudinal relationship network to strategic change.Third, the proportion of state-owned shares has a positive regulatory role of social capital and firm performance. When a higher proportion of state-owned shares existed, the positive impact of social capital on corporate performance will be enhanced. Therefore, with a higher proportion of state-owned shares, the state-owned commercial banks should be more emphasis on the role of social capital.In this paper, there are still some limitations and shortcomings:First, the sample data collected in this article is from the18domestic commercial banks, there are some limitations on the scope, due to the special nature of the banking industry, the conclusion may have certain limitations. Second, the research on the measure of the TMT social capital is mainly borrowed from BianYanjie’s definition. The executive social capital is divided into longitudinal network relationships, horizontal network relationships and social network relationships, and the accurate of definition needs to be further explored. And data on social capital comes mainly from secondary data in the existing literature, there are some limitations in the accuracy of the data. Third, there are some limitations on the choice of strategic change variables. Research for strategic change is still not formed a comprehensive analytical framework, and measurement of strategic change is still in the development stage, it may be the reason that industry, the nature and level of the angle that strategic change involved in is different, so the situation of strategic change is different. Therefore, the design and measurement of variables used in this study has some limitations. I hope that the above inadequacies will be improved in the follow-up study.