ROLE OF SOCIAL CAPITAL IN RELATION TO INFORMATION SHARING AND OVERALL FIRM PERFORMANCE: CASE OF FMCG SECTOR OF KARACHI

Abstract

Purpose The purpose of this study is to identify the effects ofsocial capital on promoting bi-directional information sharing (inflow and outflow) practices and. thereby, improving the firm performance (efficiency and responsiveness).This study examined the buyers’ perceptional differences in sharing of information: when they receive the information from suppliers and they give information to suppliers, so how social capital theory can resolved this in equivalent perception ofsharing information. Methodology & Design Quantitative method is used in order to collect and analyse the data and aid the researchers in future observ ations. In order to examine the aspects of a theoretical framework, a questionnaire was developed based on Likert scale, ranging from 1-5. The constructs include social capital (with dimensions including structural capital, cognitive capital, and relational capital), bi directional information (inflow and outflow) and firm’s performance (efficiency, responsiveness). Findings The findings present a problem of unequal perception in receiving and providing information, and dimension of social capital have different effect on information sharing and this sharing influence on firm performance. All dimensions of social capital were significant for information inflow; however only relational capital was insignificant for information outflow. Limitations Despite the fact that the present study provided valuable insights on social capital, bi directional information sharing and firm performance, but it has some limitations like the response rate was relatively low due to the current pandemic situation, as the survey was online-based therefore, it was hard to reach potential respondents, this research was limited to the FMCG sector in Karachi, The causal relations could not be fully identified due to static nature of the survey approach is employed. Longitudinal study settings would enable researchers to examine further into the dyadic interactions between buyers and suppliers. Recommendations The research advised that firms should take advantage of social capital in order to encourage bi-directional information sharing s because it help firms to work efficiently and reduce cost that will eventually improving organizational performance