TMT's SOCIAL CAPITAL AND FIRM PERFORMANCE: DO TMT's NETWORK MATTER?

Abstract

The firm needs getting information efficiency and effectiveness of resource access. Top Management Team (TMT) as part of governance have different role depending on firm performance. According to social capital theory, social capital can refer to company assets in the form of a network that contains information, trust and norms. TMT's social capital explored for improving firm performance through joining the same network of experience, personality, and management style. Those are beneficial for social and economic exchange as a source of company excellence and competitive performance. External parties' trust attached to the network, followed by the top management team. The amount of trust that is getting bigger, broader, and weighted will show the increasing network quality of the senior management team in providing benefits for the contribution of increasing company performance. Measuring social capital effectiveness determines the magnitude of the increase in company performance. The social capital new measurements exploration needed to be able to represent the component of social capital.