Elsevier

Journal of Retailing

Volume 86, Issue 4, December 2010, Pages 310-321
Journal of Retailing

Performance Implications of a Retail Purchasing Network: The Role of Social Capital

https://doi.org/10.1016/j.jretai.2010.07.002Get rights and content

Abstract

This study employs social capital theory to examine how a retail buyer's network of industry peers influences retail performance. We propose that performance is enhanced by three network resources – access, referral, and influence – that result from two structural facets of a retail buyer's network: contact diversity and contact position. We test the model by collecting sociometric data that measures interpersonal ties among 84 retail buyers operating in the same geographic territory in the U.S. golf industry. The results offer evidence that network resources lead to higher levels of performance, even when accounting for differences in human capital and organizational resources. The paper concludes with a discussion of managerial and theoretical implications.

Section snippets

Theoretical framework and hypotheses

The analysis of social capital stems from sociological efforts to examine influences of relationships on social action. Unlike other forms of capital, social capital is not the property of a single actor; instead, it is embedded within relationships, and may be gained or lost as ties are developed or broken (Coleman 1988). Social capital has been examined as the resources available from one's ties, as well as the ties and structure of a network that yield access to resources (Foley and Edwards

Sample

We tested the proposed research model in the U.S. golf industry. A $76 billion industry (SRI International 2008), retail purchases of golf merchandise account for nearly 10% of industry-wide sales. The purchasing agents in this study are PGA (Professional Golfers’ Association of America) professionals in a single U.S. state, each of whom manages and acts as the buyer for the retail merchandise operations at an independent “on-course” golf facility. The respondents face a highly competitive

Results

Table 2 provides descriptive statistics, correlations, and psychometric properties for multi-item scales for the data collected from the PGA professionals. Initial calculations of network-based responses were performed using UCINET 6 for Windows (Borgatti, Everett, and Freeman 2002). With input taken from the covariance matrix, LISREL 8.80 (Jöreskog and Sörbom 2006) was then employed to conduct measure validation procedures and assess the structural model.

Discussion and implications

The present study contributes to channels research in a retail setting by employing social capital theory as a framework that captures network relationships as strategic resources. Taken as a whole, the test of the model provides evidence of the value of social capital derived from external ties to industry peers. Retail purchasing agents with external ties to representatives of a wide variety of firms were more likely to reach prominent peers. This finding corroborates the structural

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