Social Capital, Collective Transformational Leadership, and Performance: A Resource-Based View of Self-Managed Teams

Abstract

A growing body of literature highlights the role of teams in modern organizations. The ability of team members to work together can improve the overall functioning of the organization (Marks et al., 2001). An important construct that encapsulates relationships between individuals in organized groups such as self-managing teams is social capital (Tsai, 2000). Recent research has suggested that the relationship between social capital and performance also depends on other factors, such as internal characteristics of the team (Maurer and Ebers, 2006). This study examines the moderating impact of collective transformational leadership (CTL) on the relationship between social capital in self-managed teams and performance. CTL refers to the team's capability for collectively engaging in transformational leadership behaviors (Avolio et al., 2009). It considers leadership as collective process, such that the team influences, inspires, and motivates team members (Sivasubramaniam et al., 2002). According to House et al. (1995), CTL is similar to individual-level leadership in that the functional relationships hypothesized at the individual level are expected to be isomorphic at the higher (team) level. CTL thus elevates transformational leadership to the team level (Avolio et al., 1996). The present study examines the possibility that the relationship between social capital and performance is contingent upon collective transformational leadership. It uses resource-based lens to propose theoretical model where social capital within the management team has direct positive effect on the performance of the team. It extends extant research by studying the role of transformational leadership collectively enacted by the team in facilitating the impact of social capital on team performance. It links two emerging fields of inquiry, social capital and collective leadership, to study the interaction between the two constructs. Data collected from sample of teams making managerial decisions in simulated athletic footwear industry is used to test hypothesized relationships. THEORETICAL DEVELOPMENT Social Capital: A Resource-Based View Social capital can be broadly conceptualized as a function of social structure producing advantage (Burt, 2000: 347-348). According to Leana and van Buren (1999: 540), social capital is an attribute of social unit ... jointly owned by the whole unit and its members. At the team level, social capital is embedded in the linkages and relationships between individuals in team (Burt, 1992; Newell et al., 2004). These interrelationships between team members are available to and potentially benefit the team as whole (van Emmerik and Brenninkmeijer, 2009). Viewed broadly, social capital in teams can encompass several aspects of team functioning, such as the cohesiveness of ties between individuals (the structural dimension of social capital), trusting norms (the relational dimension of social capital), and shared code or paradigm (the cognitive dimension of social capital) that facilitates actions and behaviors (Tsai and Ghoshal, 1998). Actions and behaviors that help build these three aspects of social capital benefit the whole team (Kostova and Roth, 2003). Several scholars have suggested that social capital is an intangible resource, which can have major influence on overall performance (Dess and Shaw, 2001). Team social capital can be considered unique resource which creates value, is hard to imitate, rare to find, and very sustainable (Barney, 2001). Social capital is valuable as it diminishes the probability of opportunism, reduces the need for costly monitoring, reduces transaction costs, and results in benefits for all (Oh et al., 2004: 863). Few people know how to build social capital in teams, and close interpersonal relationships among individuals are relatively rare (Putnam, 1995). It is difficult to discern the exact mix of the elements comprising social capital (Maskell, 2000), and this causal ambiguity protects it from imitation by others. …