The role of social capital and culture on social decision-making constraints: A multilevel investigation

Social capital is a powerful theory explaining how organisations and their members access resources through relationships. Yet, it is important to examine potential negative consequences, as significant investments are required to build social capital, and indiscriminate promotion of social capital may lead to wasted resources. The research herein responds to this call by examining a specific negative consequence in cohesive, internally focused groups associated with the bonding perspective of social capital. To investigate the adverse impact of conformity, we employ the construct of social decision-making constraints (SDMC), which refers to perceptions of the extent to which social relationships can control decision-making in an organisational context. Using multilevel structural equation modelling (MSEM) of nested data from Chinese firms, we test the impact of social capital (norm of reciprocity and trust) and culture (power distance and high–low context) on SDMC, and find that reciprocity norms and power distance increase and trust decreases SDMC at both the individual and firm levels, whereas the high–low context operates only at the individual level to increase SDMC. Compared to previous studies, the current findings offer a more comprehensive understanding of the multilevel impacts of social capital, thus providing evidence that different facets of social capital and culture exert both positive and negative effects on SDMC.