Organizational Stakeholders Relational Capital


All organizations face a critical challenge in attaining andmaintaining competitive advantage (Vasquez &amp Medhekar, 2016). Thecapabilities and resources, which are difficult to imitate, unique,non-substitutable and rarely creates power to compete are aboveaverage performance. Relational capital ensures effective knowledgeflow and may be referred as knowledge transmitter (Bourassa &ampCunningham, 2015). In this paper, suppliers, customers and employeeswere identified as the organizational stakeholders for exploration.Relational capital is a component of intellectual capital and isrooted in the organization relationship with the suppliers,customers, employees among other essential constituencies.

Hypothesizing on how to establish relational capital with thethree stakeholders.

The core hypothesis of this paper considers relational capital as acritical component of intellectual capital, which is believed toimprove the firm’s relationship with its stakeholders includingsuppliers, employees and customers. When formulating the hypothesisfor this paper, employees are taken as the primary determinants ofthe relationships between the organization and other stakeholders.

A positive firm’s relationship with the customers was found toimprove the performance of the organization. Moreover, the relationalcapital relationship with the customers is known as market-orientedconcept, and there is direct interaction with customers for differentreasons including issue reporting and feedback (Bourassa &ampCunningham, 2015). Market orientation is known as wide organizationalmarket intelligence generation concerning the future and currentcustomers’ needs. There is a need for vertical and horizontaldissemination of intelligence to create competence market thatresponse to the change of market.

The internal part of this relationship concerns organization’srelationship with employees. Nevertheless, attributes such as sharedparadigm or shared code facilitate a common understanding of propersocial system actions and collective goals. This erases likelihood ofopportunistic actions that allows employees to work together hencecreating a teamwork and possibility of sharing knowledge.

The relational capital relationship with the suppliers positivelyimproves the performance of the company (Bourassa &amp Cunningham,2015). The socialization concept to supplier-buyer relationshipdefines the chain of supply relational capital as the socialstructure and configuration through which resources are available.The relational capital level is accessed based on trust, interactionsand mutual respect that exist between the suppliers and organization.

The value for relational capital to organization

The knowledge entrenched among the employees, suppliers and customerrelationships lead to reduction of organizational cost. This isbecause of the knowledge obtained in these stakeholders increasesinnovation to eliminate bottlenecks and increase outputs (Vasquez &ampMedhekar, 2016). Moreover, relational capital leads to capitalsatisfaction since it increases value offered in the market. This isbecause to increased reliability, flexibility and quality of thefirm’s products due increased innovations in production anddelivery of service.


Bourassa, M.A., &amp Cunningham, P. H. (2015). Engaging with the enemy:understanding adversarial stakeholder processes and outcomes. InProceedingsof the 2010 of Marketing Science (AMS) Annual Conference&nbsp(pp.24-24). Springer International Publishing.

Campos Cunha,R., Faro Albuquerque, I., Dias Martins, L., &amp Brito Sá, A.(2014). Primary health care services: workplace spirituality andorganizational performance.&nbspJournal of Organizational Change Management,&nbsp27(1),59-82.

Vasquez, M.A. F., &amp Medhekar, A. (2016). Service supply chain coordinationfactors: the case of Saudi Arabian hospitals.&nbspInternationalJournal of Logistics Systems and Management,&nbsp23(3), 281-298.