Journal of World Business 39 (2004) 244–254

The influence of individual and firm level social capital of

marketing managers in a firm’s global network
David A. Griffith*, Michael G. Harvey1
a
Michigan State University, Department of Marketing and Supply Chain Management, East Lansing, MI 48824-1122, USA
b
University of Mississippi, School of Business Administration, University, MS 38766, USA

Abstract

Firm success is dependent, to a degree, on a marketing manager’s ability to develop social capital within the firm’s global
network. A model is developed employing individual social capital (both internal and external) as the foundation for three types
of firm level social capital (i.e., customer, business partner and governing agency) resident in a firm’s global network. It is
theorized that customer, business partner and governing agency social capital provide a basis for enhancing customer value
delivery and thus firm performance. Specific marketing management strategies necessary for the development of each type of
firm level social capital, as well as the benefits derived from each type of social capital are presented. This analysis raises a
number of previously unexplored research issues concerning the nature and scope of social capital in a firm’s global network and
how social capital can be employed in a global marketplace.
# 2004 Elsevier Inc. All rights reserved.

1. Introduction Theoretically, social capital has been conceptua-

Understanding the development and leveraging of
social capital has become an area of considerable
interest among social scientists (cf. Adler & Kwon,
2002; Leana & Van Buren, 1999). Defined as an asset
that is engendered via social relations and that can be
employed to facilitate action and achieve above-nor-
mal rents, social capital has been used to gain a greater
understanding of democracy and governance, eco-
nomic development, collective action, employment
success, industry networks, as well as a wide number
of other issues (e.g., Bolino, Turnley, & Bloodgood,
2002; Hunt, 2000; Kostova & Roth, 2003).
*
Corresponding author. Tel.: þ1-517-353-6381;
fax: þ1-517-432-1112.
E-mail addresses: griffith@bus.msu.edu (D.A. Griffith),
mharvey@bus.olemiss.edu (M.G. Harvey).
1
Tel.: þ1-662-915-5830; fax: þ1-662-915-5821.
lized at multiple levels. For example, Fukuyama
(1995) conceptualizes social capital at the national
level, Kostova and Roth (2003) at the individual level,
Leana and Van Buren (1999) at the organizational
level and Hunt (2000) at the inter-organizational level.
In addition, social capital has been visualized as being
a private good (i.e., an asset that individuals can
‘‘spend’’) as well as a public good (i.e., an asset that
can benefit not only the one who developed it but also
group members). While a significant amount of
research has been conducted in the area of social
capital, researchers are just beginning to integrate
social capital across levels of analysis (cf. Kostova
& Roth, 2003). As such, only a limited understanding
of the theoretical tenets of an organization’s social
capital and the resulting benefits of investing in mar-
keting management strategies aimed at its develop-
ment have been gained. This gap in the literature is

1090-9516/$ – see front matter # 2004 Elsevier Inc. All rights reserved.
doi:10.1016/j.jwb.2004.04.004
 D.A. Griffith, M.G. Harvey / Journal of World Business 39 (2004) 244–254
concerning given that understanding the development
and leveraging of different types of social capital (i.e.,
at the individual and firm levels) is important given
social capital’s influence on a firm’s ability to
enhanced customer value delivery. This shortcoming
in the literature becomes even more pronounced as we
explore firms operating in a global context where they
are separated from their customers by cultural and
economic differences. As firm success is found upon
integrating cultural and economic differences into the
firm’s overall marketing strategy to enhance customer
value delivery, marketing managers become central to
the discussion of social capital in a firm’s global
network.2
In this article, we integrate individual (i.e., marketing
manager) and firm level social capital to gain a better
understanding of how these two levels of social capital
relate and provide a context for enhancing customer
delivered value in a firm’s global network. First, social
capital at the individual level is presented as the the-
oretical context for the existence of social capital at both
the intra-organizational (internal) as well as the inter-
organizational (external) (i.e., when a marketing man-
ager serves in a boundary spanning role within a global
network context) level. Next, firm level social capital is
integrated into a discussion of increasing the effective-
ness of relationships in a global network context to
enhance value delivery and ultimately performance.
Specifically, customer, business partner and governing
agency firm level social capital are modeled. A model of
marketing management strategies for the creation of
firm level social capital within the firm’s global network
and the consequences of each of the three types of social
capital is then developed. Finally, directions for future
research are presented.
2. The theoretical foundations of social capital
Social capital is an intangible asset that is created
via social relations and that can be employed to
2
Our focus here is on the social capital embodied within
marketing managers as marketing managers serve a key role in
developing strategies to enhance customer value delivery in a
firm’s global network. However, at a theoretical level it could be
argued that other functional area managers accumulate social
capital within the firm (and its global network) and as such could
also be viewed as a key firm resource.
245
facilitate action and achieve above-normal rents for
the ‘owner’ (Adler & Kwon, 2002; Leana & Van
Buren, 1999). For instance, in China, the development
of social capital with key business contacts underlies
performance success, as social capital is necessary to
operate effectively in the Chinese market (Peng &
Luo, 2000; Tan & Litschert, 1994). In a marketing
management context, social capital has been primarily
conceptualized as a resource reflecting the character of
social relations within a firm (Hunt, 2000; Kostova &
Roth, 2003) that extend beyond firm boundaries pro-
viding a basis for inter-firm action. Although the term
‘‘social capital’’ has received considerable attention in
the literature, consensus on its theoretical domain and
tenets have yet to be achieved (Leana & Van Buren,
1999). In a review of the social capital literature,
Leana and Van Buren (1999) note that while the
literature presents a variety of perspectives on the
levels of analysis, dimensions, etc., of the concept,
two underlying dimensions are common to existing
conceptualizations of social capital: associability and
trust.
Associability is defined as the willingness and
ability of participants to subordinate individual level
goals and associated actions to collective goals and
actions (Leana & Van Buren, 1999). The inherent
subornation of individual goals through participation
in the collective, however, is not a relinquishment of
individual goals, but rather an active mechanism that
individuals employ to pursue individual goals.
Through participation in efforts to meet group objec-
tives, the individual is able to achieve their individual
goals. This is not to imply a self-serving purpose, but
rather through identification with the collective the
individual works toward the collective’s objective, and
residually toward their own goals, as is characteristic
in collectivist cultural types. Given the nature of
associability, it has both affective (i.e., collectivist
feelings) and skill-based components (e.g., ability to
coordinate activities).
A second component of social capital is trust. Trust
is evident when one partner has confidence in
another’s reliability and integrity (Leana & Van Buren,
1999). Cooperative, long-term relationships are
dependent upon the fostering of trust. Trust can be
considered in terms of a risk-reward relationship,
where predictable actions by a one party allow the
relationship to operate more effectively. The value of
246 D.A. Griffith, M.G. Harvey / Journal of World Business 39 (2004) 244–254
trust is derived from a reduction in risk of opportu-
nistic behavior on the part of one’s exchange partner
thus reducing the costs of the relationship (William-
son, 1993). Further, when someone is trusted, others
are more willing to commit to relationships. Through
the development of trust in the relationship, repetitive
transaction sequences occur, reducing transaction
costs. Further, trust extends beyond dyadic relations
via generalization through affiliation and reputation
(Leana & Van Buren, 1999). Putnam (1993) argues
that trust can reside at the generalized level via the
development and adherence to generally accepted
norms and behaviors. Thus, an individual or firm that
adheres to the generally accepted norms and behaviors
embedded within set social relations can be trusted
even though a member joining the firm’s associations
does not have personal knowledge of, or interaction
with, the firm.
The dimensions of associability and trust can be
both attributes of the group as well as the individual.
Leana and Van Buren (1999) argue that acts that
enhance individual social capital benefit the collective
directly and the individual indirectly, thus tying indi-
vidual level social capital to firm level capital. For
example, when a U.S. marketing manager engages in
social capital building processes with his/her firm’s
Chinese production manager the social capital devel-
oped by the U.S. marketing manager benefits not only
him/her but also the U.S. firm he/she represents (e.g.,
via enhanced coordination, etc). To more fully explore
this issue we will discuss social capital at both the
individual and firm level.
3. Individual level social capital
Social capital at an individual level refers to ‘‘the
standing one has in an organization and the concurrent
ability to draw on the standing to influence actions of
others in the organization’’ (Friedman & Krackhardt,
1997: 319). A marketing manager can build associa-
bility and trust within the firm’s global network
through the exchange of codified (i.e., knowledge that
can be synthesized into a set of codes) and tacit
knowledge (i.e., knowledge derived from doing, such
as the social knowledge one gains by living in a
foreign environment) across internal and external
relations. As such, a marketing manager’s social
capital, both in headquarters and local markets (i.e.,
internal and external social capital), facilitates infor-
mation transfer and learning as well as providing for
political support within and between organizations in
a global context. This enables marketing managers to
play a unique strategic role in global organizations and
within a firm’s global network.
Individual level social capital binds the headquar-
ters of the global organization to the plurality of norms
held by foreign subsidiaries and/or network partners.
Without social capital with these constituents market-
ing managers could suffer resistance to the decision-
making latitude due to lack of confidence in their
ability, loyalty, and the commitment to the corporate
goals and policies. Marketing managers need to estab-
lish social capital with headquarters and locally to
support foreign strategies and gain the trust of both
local managers and top management of the global
organization thus providing the means for the orga-
nization to legitimatize the plurality of normative
institutions in both the domestic and foreign markets.
This concept helps to explain the need for inpatriate
(i.e., foreign marketing managers permanently or
semi-permanently assigned to the headquarters of
the organization) and expatriate marketing managers,
as these managers serve as a cultural bridge between
the domestic and global environments/organizations
(Harvey & Buckley, 1997).
The importance of marketing managers with social
capital, which bridge headquarters and foreign sub-
sidiaries in global organizations, becomes of greater
importance as the decision-making in global organi-
zations is being decentralized to the organization’s
periphery. These decentralizing trends have flattened
organizations, necessitating greater utilization of
cooperative initiatives based on reserves of social
capital. In particular, the growing use of cross-func-
tional, cross-organizational, and cross-national teams
(e.g., global account management teams, as well as
product development, advertising planning, logistics,
etc.) with broadened decision-making latitude, accent-
uates the need for cooperation and learning across
functional, subsidiary, and national boundaries, heigh-
tening the importance of social capital in these com-
plex organizational settings (Bennis, 1997). Further,
the movement toward the establishment of closer
connections to customers and global business partners
heightens the necessity of having social capital in both
 D.A. Griffith, M.G. Harvey / Journal of World Business 39 (2004) 244–254
the domestic and foreign organizations. Simply stated,
firm performance ultimately depends, to a degree, on
the firm’s marketing manager’s ability to build social
capital in a variety of different contexts and locations.
Past research has contended that marketing man-
agers are accepted in foreign subsidiaries because
headquarters legitimizes them, thus representing the
formal policies and norms of the headquarters man-
agement. Given the cultural novelty and need for local
tacit knowledge to effectively oversee these foreign
markets, marketing managers can be more successful
if they establish a level of trust in foreign relationships.
Social capital will be difficult for marketing managers
to build in a short-term assignment therefore under-
scoring the need to longer assignment terms (Harvey
& Novicevic, 2001). With the lengthening of overseas
assignment durations, marketing managers can experi-
ence an erosion of their parent/focal organization
social capital with headquarters due to their absence
from the domestic operations. Therefore, marketing
managers will have to concentrate on building their
social capital in not only the new foreign organization,
but also maintaining and building it in the home
country organization.
The advantage in building social capital accrues
from both the context and relationship-relevant con-
sequences of interpersonal interaction. Context refers
to the marketing manager’s ability to have relevant
behavior/knowledge in interactions. As such, a man-
ager must have intimate cultural/social insights into
how to effectively interact, communicate, and relate to
host country nationals both internal and external to the
organization, generally referred to as social orienta-
tion, to develop social capital (Kelly, 1984). Second,
relationship-relevant consequences of interpersonal
interaction are required for the development of social
capital. Here is it necessary for the marketing manager
to elicit a high level of associability and interdepen-
dence with local individuals via consistent and con-
tinued mutual interaction (Kelly, 1984). These two
dimensions of context-specific orientation are condu-
cive to the emergence of interpersonal trust, which
may grow over time due to repeated interaction
between marketing managers and host country
nationals. The high level of mutuality and accommo-
dation between the marketing managers and host
country ‘‘others’’ reduces the host country members’
need to be on guard. Therefore, through the exchange
247
of codified and tacit knowledge the marketing man-
ager and host country ‘‘others’’ develop a cultural/
social understanding of each other resulting in social
capital. As such, we argue:
Proposition 1: Social capital developed by market-
ing managers in the firm’s global network will be
positively associated with the extent of individual
interactions with both headquarters and the firm’s
subsidiary/network partners.
The trust building process between the marketing
manager and host country nationals in foreign markets
is an essential aspect of enhancing customer value
delivery. Overall, trust is important because it can
reduce transaction costs, improve organizational flex-
ibility to adapt, improve efficiency, facilitate coopera-
tion, and improve the probability of maintaining
implicit control through compliance with social norms
and expectations. Both increased organizational capa-
city and lowered interaction cost occur when trust is
established in cross-cultural relationships (Wicks,
Berman, & Jones, 1999). Marketing managers socially
embed trust at two levels, their personal relationships
and between the headquarters and subsidiary (exter-
nal) organizations. Trust needs to be both stable and
allowed to be shaped by the dynamics of the marketing
manager-subsidiary relationship over time.
Traditionally, expatriate managers have been used
in foreign assignments to insure adequate control over
the activities of subsidiaries. This form of formal
bureaucratic control has had as its primary goal to
regulate the activities of the foreign subsidiary so that
they are in accord with the centric policies, plans and
management expectations relative to performance
(Child, 1972). Through expatriation, a global organi-
zations’ top management institutes formal controls to
reduce the assumed shirking behavior of the geogra-
phically dispersed host country marketing managers.
For a stable set of tasks, such formal controls can be
used to insure coordination of activities among orga-
nizations that exhibit high levels of interdependence
(Van de Ven, Delbecq, & Koenig, 1976). However, in
situations where a high level of interdependence exists,
formal bureaucratic control mechanisms of distrust are
less efficient than the development of associability and
trust, which represent more informal and/or cultural
forms of social control (Roth & Nigh, 1992).
248 D.A. Griffith, M.G. Harvey / Journal of World Business 39 (2004) 244–254
Marketing managers, by building trusting relation-
ships with host country partners, become an efficient
mechanism for developing associability in foreign
subsidiaries and global network relationships.
Associability is developed by an indirect internaliza-
tion of norms, rules, or derived behaviors by host
country partners through cultural interaction with
marketing managers who have previously been socia-
lized to headquarters expectations (Edström & Gal-
braith, 1977). The establishment of associability
enhances coordination between headquarters and
the firm’s subsidiaries/network partners (Roth & Nigh,
1992).
The development of associability by subsidiaries
through marketing managers is based upon efficient
use of unique local codified and tacit knowledge of
foreign markets, and the marketing manager’s simul-
taneous understanding of the political nuisances of
headquarters. Marketing manager knowledge of local
markets may reduce the network member opportunis-
tic tendencies, frequently found in formal control
situations, and therefore facilitate coordination via
joint actions with host country partners implemented
in a relatively low cost manner (e.g., supply chain
coordination, advertising planning, new product
development/introduction, etc.). As such, we argue:
Proposition 2: Social capital developed by marketing
managers in the firm’s global network will be positively
associated with coordination between the firm and its
foreign subsidiary and/or network partners.
Marketing managers’ tacit and codified knowledge
of the local market allows for the development of
associability and trust to facilitate cooperation in a
plurality of interactions with host country stake-
holders. An additional benefit derived from enlarging
common knowledge is that marketing managers’ indi-
vidual knowledge about local opportunities helps
them to develop and build social capital in the head-
quarters (i.e., they become trusted and are viewed as
having unique skills and knowledge necessary to
differentiate the organization from competitors in
local markets). By integrating individual knowledge
at the firm level, common knowledge becomes
embedded in the routine and policies of the organiza-
tion. As common knowledge about foreign markets
increases, marketing managers are deemed essential to
the effective and efficient operation of the global
operations of the organization, thus providing the
organization with a mechanism of associability and
trust within its global network that is flexible, adap-
tive, and coordinated through the organizational cap-
ability developed in the headquarters organization.
The increasing demand for cooperative initiatives in
risky and uncertain environments require strategic
flexibility of a global organization to leverage sub-
sidiary units as well as network partners in a global
context (Zander & Kogut, 1995). Lei, Hitt, and Bettis
(1996) argue that the theory of global strategic flex-
ibility must emphasize the importance of resource
flexibility, where the critical resources encompass
strategic leadership, human capital, technological
advances and cooperative synergies between organi-
zational culture and structure. As an adaptive global
firm is oriented toward dynamic and anticipatory
strategic flexibility as its core competency at the same
time there is a demand for an increased level of
cooperation among subsidiaries. The proactive sub-
sidiary and/or other foreign stakeholders’ cooperation
is a global imperative for the development of the
global organization’s ‘‘relational capability’’ to launch
global initiatives, such as global account management,
global sourcing, and global production sharing devel-
opment. Therefore, the accumulation of social capital
by marketing managers enhances the organization’s
capability, via the transfer of tacit and codified knowl-
edge, thereby enhancing value-delivery to customers
in foreign markets. As such, we argue:
Proposition 3a: Social capital developed by market-
ing managers in a firm’s global network facilitates the
transfer of tacit and codified knowledge between head-
quarters and the firm’s subsidiaries and network
partners (and vice versa).
Proposition 3b: Social capital developed by market-
ing managers in a firm’s global network enhances the
firm’s relational capability to launch global initiatives.
4. Social capital at the firm level: a global
network context
Business networks are a set of interconnected
organizations or alternatively a set of connected
 D.A. Griffith, M.G. Harvey / Journal of World Business 39 (2004) 244–254
relationships (Peng & Luo, 2000). This perspective
views organizations as dependent upon their network
partners for inputs necessary for effective operation.
However, a marketing management perspective of
networks necessitates a broader view of the organiza-
tion’s network. Specifically, a firm’s social capital
network can be envisioned as extending to, and includ-
ing, governing agencies and customers.
The network infrastructure of a strategic path to
develop and maintain social capital can be viewed in
and of itself as an employable resource that, when
leveraged, can enhance customer value delivery and
ultimately performance. In the global competitive
arena, a firm makes long-term, quasi-irreversible com-
mitments of resources to network partners to develop
and maintain social capital (e.g., the assignment of
headquarter marketing managers to foreign markets).
Once established, social capital can then be employed,
such as to gain access to customer information (e.g., in
foreign markets) necessary to tailor products to needs
and enhance value delivery, to stimulate cooperative
behavior on the part of business partners to smooth
global logistical flows and increase efficiency, or to
garner governmental favor in relation to regulatory
modifications for the facilitation of commerce. Thus,
the employment of the firm’s social capital (built upon
marketing manager social capital) within a firm’s
global network can provide for enhanced customer
value delivery in diverse markets resulting in perfor-
mance gains.
The unit of analysis in this section is at the global
network level and the focus in on those marketing
management strategies a firm can employ to enhance
firm level social capital. Selecting the ‘‘right’’ candi-
dates or acquiring key global marketing managers that
can perform the function between the focal organiza-
tion and key external constituents may be one of the
quickest means of generating firm level social capital
(Kostova & Roth, 2003). Fundamental to the concep-
tualization of social capital is that while it operates at
the individual level, it is also a public good (i.e., social
capital belongs to the collective as opposed to a
specific social actor; Adler & Kwon, 2002; Leana
& Van Buren, 1999). As such, we argue:
Proposition 4: A positive association exists between
a firm’s social capital in its global network and its
marketing managers’ social capital.
249
The model developed next examines three types of
social capital (e.g., customer, business partner and
governance agencies) and their developmental strate-
gies and outcomes. The model put forth is not without
codicils. In order to maintain manageability, only a
sample of the marketing management strategies and
outcomes related to each type of social capital are
presented. In fact, each type of social capital has a long
list of marketing management strategies that would
aid in its development as well as a plethora of out-
comes. Further, for clarity, the types of social capital
are discussed independently. As such, the model is
intended to show applicability as opposed to comple-
teness. Theoretically, the three types of social capital
can be interrelated in both their development and
leveraging (see Fig. 1).
4.1. Customer social capital
Customer social capital is conceptualized as an
asset that an organization has developed and maintains
with its customers that can be employed to facilitate
action and achieve/sustain a competitive advantage.
Customer social capital resides in the trust and
associability the customer places in the organization.
Customer social capital can be viewed in relation to its
customer derivatives: (1) reduced transaction uncer-
tainty (i.e., customer avoidance of performance unpre-
dictability, performance satisfaction, and/or favorable
interactions relative to service) and (2) meaningful
affiliation, such as to an organization’s brand that
binds the customer to future interactions (Bendapudi
& Berry, 1997).
The development of customer social capital derives
from a number of marketing management strategies,
such as market orientation (e.g., Kohli & Jaworski,
1990; Slater & Narver, 1999), however, it is enacted at
the individual level. Market orientation is broadly
conceptualized as the system wide generation, disse-
mination and responsiveness to customer and compe-
titor related intelligence (Slater & Narver, 1999).
Slater and Narver (1999: 1165) argue that market
oriented organizations employ marketing strategies
that ‘‘seek to understand customers’ expressed and
latent needs, and develop superior solutions to those
needs.’’ Market oriented marketing strategies stress
not only the importance of conducting marketing
research, but also a close alignment with lead users
250 D.A. Griffith, M.G. Harvey / Journal of World Business 39 (2004) 244–254
Development Social
Strategies Capital
Market Orientation Customer
Procedural and
Distributive Business
Justice Partner
Relationship Governing
Development Agency
Fig. 1. Developmental strategies and social capital network.
in its global markets. By working with lead users in
each of the firm’s global markets organizations are
able to discover new solutions to unexpressed needs as
well as exploring undeveloped markets and/or seg-
ments (Leonard-Barton, 1995). A business that
embraces the values implicit in a marketing strategy
of market orientation focuses its processes in each
market at creating superior customer value, where
delivered value develops trust and associability with
the organization’s customers.
The leveraging of customer social capital results in
benefits, such as re-patronage behavior resulting in
customer loyalty over time. The development of cus-
tomer loyalty allows organization’s to not only be
more profitable in the short-run, but also in the long-
run as loyal customers spend more (O’Brien & Jones,
1995), provide a base of positive word-of-mouth
(Reichheld & Teal, 1996), and evolve into a contin-
uous flow of future customers (Oliver, 1999). Through
the systematic accumulation of customer needs and
wants on a global basis organizations are able to be
more responsive to customers in both local and foreign
markets, developing a loyal customer base and achiev-
ing enhanced firm performance (Han, Kim, & Srivas-
tava, 1998). Thus, the development and leveraging of
customer social capital in an firm’s global network can
provide a basis for enhanced value delivery and ulti-
mately performance. As such, we argue:
Dynamic
Capabilities
Re-patronage
behavior/loyalty
Coordination Performance
Knowledge
Development
Input into
Regulations
Access to
Resources
Proposition 5: Marketing management strategies
(e.g., market orientation) develop social capital within
the firm’s global customer network context that can be
leveraged by the firm (e.g., developing brand loyalty)
to enhance customer value delivery in global markets
and ultimately firm performance.
4.2. Business partner social capital
Business partner social capital is defined as an asset
that an organization has developed and maintains
within its infrastructure of global business relations
(i.e., buyers and suppliers) that can be mobilized to
facilitate action and enhance value delivery (Peng &
Luo, 2000). Business partner social capital (i.e., the
accumulated associability and trust of those members
of the global business network) facilitates the func-
tioning of the relationship and the enhancement of the
organization’s ability to delivery customer value in the
global marketplace and is inherently based on the
individual social capital developed via marketing
managers.
The development of business partner social capital
can derive from marketing management strategies
such as relationship development. Relationship devel-
opment in the firm’s global business network can be
operationalized via its treatment of its global business
partners (e.g., procedural and distributive justice).
 D.A. Griffith, M.G. Harvey / Journal of World Business 39 (2004) 244–254
Procedural justice (PJ) refers to the process, and the
perceived fairness of that process, associated with the
distribution and/or allocation of goods/services in
limited supply relative to demand (Konovsky, 2000;
Lind & Tyler, 1988). PJ is focused on perceived
fairness of decision-making procedures itself and on
the attitudes of individuals directly involved in or
affected by those decisions (Korsgaard, Schweiger,
& Sapienza, 1995). PJ is considered important in
global business network relationships because expec-
tations of interaction are built-up between individuals
over time where outcomes are balanced over the
length of the relationship and not on each exchange.
However, that is not to imply that the outcomes are
irrelevant to the social exchange. Closely tied to the
principles of PJ is distributive justice (DJ; i.e., the
perceived fairness with the decision outcome;
Konovsky, 2000). In recurring interactions organiza-
tions are willing to accept short-term imbalances in
outcomes given that over time outcomes should accu-
rately reflect inputs. When outcome distributions are
appropriate and acceptable the business partner views
the relationship as beneficial and reciprocates via
additional inputs, if rewards are not forthcoming,
the relationship will cease to exist. When an organiza-
tion in a business relationship perceives the develop-
ment and administration of relationship policies to be
fair/equitable (i.e., PJ), as well as the equitable alloca-
tion of resources within the relationship (i.e., DJ), they
are more likely to develop associability and trust in their
business partner. The development of social capital
between specific business partners, while forming the
foundation of the specific relationship, can be general-
ized, thus enhancing the willingness of other business
partners to join the organization’s global network.
While the creation of business partner social capital
via PJ and DJ serves as a resource of the organization,
it is only through the leveraging of that resource, that
processes such as knowledge development can be
established. Knowledge is viewed as a key strategic
resource (Grant, 1996; Kogut & Zander, 1992).
Knowledge-based theory views the organization as
an efficient mechanism for integrating knowledge
diffused across a number of different sources, focusing
on the modes of acquiring knowledge through learning
and the mechanisms for dissemination of knowledge
among the constituents of the organization (Grant,
1996). Extending this from the firm to the global
251
business network level it is argued that a firm’s global
knowledge sharing with its network partners provides
a strategic resource facilitating the generation of
unique competitive capabilities for the firm in its
global network (Bolino et al., 2002). Firms capable
of integrating and utilizing knowledge are able under-
stand their customer needs across diverse markets thus
enhancing value delivery and thus firm performance.
Therefore:
Proposition 6: Marketing management strategies
(e.g., justice policies) develop social capital within
the firm’s global network context that can be lever-
aged by the firm (e.g., knowledge development) to
enhance customer value delivery in global markets
and ultimately firm performance.
4.3. Governing agency social capital
Firms operate in a regulated task environment, often
referred to as a political economy (Achrol, Reve, &
Stern, 1983; Zald, 1970). A political economy
approach views networks as comprising interacting
sets of major economic and sociopolitical forces that
influence collective behavior and performance. Cen-
tral to the political economy approach are governing
agencies, including regulatory bodies, trade associa-
tions, etc. who specify regulations and control
resource allocations (Achrol et al., 1983; Zald,
1970). Governing agency social capital refers to the
social relations, and inherent trust and associability,
that an organization has developed with those social
actors in the political economy charged with allocat-
ing resources, setting the guidelines for operation
(e.g., government agencies, political action groups,
etc.), etc. that can be mobilized to enhance customer
value delivery and ultimately firm performance.
The development of governing agency social capital
derives from marketing management strategies such
as the development of unique regulatory relationships.
Governing agency social capital, while generalized at
the organization level (cf. Luo, 1997), is developed
primarily at the individual level (individual level
social capital in social network theory is conceptually
similar to work related to career success, e.g., Bolino
et al., 2002). Marketing managers can serve as con-
duits for organization accumulation of governing
agency social capital. The development of governing
252 D.A. Griffith, M.G. Harvey / Journal of World Business 39 (2004) 244–254
agency social capital relies upon personal relations
and the exchange of favors between organizations’
management and its governing agencies (Park & Luo,
2001). For example, personal ties developed through
non-business related functions (e.g., family relation-
ships, memberships in associations, etc.) can develop
governing agency social capital.
An organization’s governing agency social capital
is considered a firm resource when the organization’s
relationships with governing agencies can be
employed to create value in the global marketplace,
such as through facilitating the organization’s opera-
tions, generation of new business, etc. The ability to
leverage governing agency social capital of a firm’s
marketing managers has specific performance impli-
cations. Those firms that are able to leverage govern-
ing agency social capital will be able to have input into
the development of new regulations, logistical infra-
structure development plans, governmental policies,
etc. In a firm’s global network, the importance of
governing agency social capital will depend on the
general level of influence governing agencies com-
mand in each market. For instance, nowhere is gov-
erning agency social capital more important than in
the Chinese market. Chinese business operates under
intensive regulatory control. Tan and Litschert (1994)
found that in terms of firm performance, Chinese
managers indicated that government policy and action
is the most influential environmental factor. With ease
of access to information and business assistance
strongly controlled by the state, it is not surprising
that many have theorized that governmental action in
China continues to be an influential factor driving firm
performance (cf. Peng & Luo, 2000; Walder, 1995).
Walder (1995) indicates that officials of various gov-
erning agencies maintain considerable power to
approve projects and allocate resources. The positive
influence of social linkages (i.e., governing agency
social capital) between firms and local officials is
strongly supported (Peng & Luo, 2000; Walder,
1995). While governing agency social capital is
obvious in China, it is no less important in other
markets for gaining effective access to customers
necessary for competitive positioning of a firm and
its global network. As such, we argue:
Proposition 7: Marketing management strategies
(e.g., relationship development) develop social capital
within the firm’s governing agency network context
that can be leveraged by the firm (e.g., access to
resources) to enhance value delivery in global markets
and ultimately firm performance.
5. Managerial implications
The issues brought forth have significant practi-
tioner implications. Social capital embodied by mar-
keting managers in the firm’s global network can be
of great importance to the firm. Marketing managers
are at the core of the decision-making process for
marketing strategy and implementation. By examin-
ing the development of social capital of a firm’s
marketing managers firms can begin to gain a more
in-depth understanding of the specific resource stocks
they possess and those that they need to develop in
order to establish a competitive advantage in the
global marketplace. As such, the explication of
how a firm’s marketing managers embody social
capital can serve as an assessment tool through which
firms can determine their respective level of intangi-
ble resources (firms may wish to modify existing
measures, such as those used by Luo (1997) and Peng
and Luo (2000), to serve as a foundation for the
assessment of social capital). For example, if upon
assessment an organization finds that it has a weak-
ness in social capital accumulation within the firm’s
global supply chain, specific marketing managers
with a demonstrated ability to develop social capital
can be assigned to this area (Harvey & Novicevic,
2002). Through the eventual development and lever-
aging of social capital at the marketing manager
level, the firm’s global supply chain can operate more
effectively.
Further, firms are constantly challenged to attract
the best and brightest marketing personnel. Organiza-
tions can become more competitive if they hire the
best talent. Nowhere is this more evident than in
marketing where marketing managers receive lucra-
tive signing bonuses, stock options, and extraordinary
compensation packages. The issue of marketing man-
ager firm capital valuation is becoming increasingly
important as firms employ the external labor market to
recruit senior level marketing talent. Capron and
Hulland (1999) note that marketing personnel in
many firms are trained elsewhere and thus marketing
 D.A. Griffith, M.G. Harvey / Journal of World Business 39 (2004) 244–254
expertise is often ‘‘bought in.’’ The concept of acquir-
ing marketing talent to complement the firm’s accu-
mulated resource stock necessitates both an
understanding of the accumulated social capital of
the firm and the social capital possessed by the market-
ing managers a firm intends to hire.
While firms compete feverishly to attract the best
marketers, little effort is normally expended toward
the goal of retaining the employees. This is surprising
as the corresponding costs to the firm of voluntary
turnover, i.e., when employees leave the firm of their
own accord, and the subsequent costs of replacing
employees can be significant. This issue is becoming
paramount as firms are pushed into ever more increas-
ingly global competitive environments. Firms that do
not value marketing manager’s social capital are more
likely to incur instances of voluntary turnover as the
marketing manager may view the firm as acting
opportunistically and thus secure a position with a
competing firm.
Finally, the development of firm level social capital
in a global network is derived from the marketing
management strategies employed by the firm with the
conduit being the marketing manager. Foundational to
social capital is the development of trust and associa-
bility within the firms’ interactions (both with its
marketing managers and members of its global net-
work). For a firm to develop social capital in its global
network relation to its customers, business partners
and governing agencies it should carefully analyze its
current resources and its position in relation to each
element. Through the careful and decisive implemen-
tation of marketing management strategies aimed at
developing and leveraging social capital within the
firm’s global network a firm may enhance customer
value delivery in global markets and establish a com-
petitive advantage.
6. Conclusions
Considerable debate resides in the literature per-
taining to the role of social capital in an organization
and its global network. Individual level social capital
provides the foundation for the development of firm
level social capital. However, it is customer, business
partner and governing agency social capital estab-
lished at the firm level that provides a basis to analyze
253
and to critique marketing management strategies by
asking a set of questions that relate to the underlying
issue of resource development, leveraging and ulti-
mately customer value delivery. How do specific
marketing management strategies develop associabil-
ity and trust in customers, business partners and
governing agencies in global markets? How do these
strategies create a unique relational resource of the
firm? How can the firm employ its social capital
resources in its global network to most effectively
enhance customer value delivery in its global markets?
How do these types of social capital vary in impor-
tance in different global markets? By helping to frame
these issues, the three types of social capital discussed
may help to redirect the current emphasis on structural
and institutional network properties to one more tar-
geted to resources that can provide long-term con-
tributions to the firm’s success in dynamically
changing global markets.
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