The direct and indirect effects of core and peripheral social capital on organizational performance

In this paper we adopt a core-periphery approach to specify the direct and indirect effects of social capital on organizational performance. We suggest that social capital deriving from stable task relationships between organizational members has a direct positive effect on organizational performance. Said effect depends, in both strength and functional form, on whether actors involved in stable dyads are located at the core or at the periphery of the organization. We also argue that core and peripheral social capital affect performance indirectly by moderating the organization's ability to leverage its human capital to improve performance. Results from a 48-year study of the National Basketball Association support our arguments and bear important implications for strategic human resource practices and organizational performance in competitive settings.