Creating competitive advantage through informal networks: evidence from Indian healthcare industries

Abstract

Informal networks, interactions, relationships and bonds are integral parts of organisational mechanisms. They evolve out of interactions among individuals over a period of time in the organisational context, but are difficult to capture within the formal roles, procedures and responsibilities. Organisational experts have the opinion that informal networks have a profound association with organisational productivity and competitive advantage. Keeping this in view, the present study was designed to empirically examine the relationship between informal networks (social capital, organisational citizenship behaviour, and social identity) and competitive advantage. Data were collected from 501 respondents working for different healthcare organisations in Kolkata, India by using standardised scales of social capital, organisational citizenship behaviour (OCB) and competitive advantage. The data were analysed using structural equation modelling (SEM). The results revealed that informal networks significantly and positively influence competitive advantage. The findings of the study suggested important implications for organisations to nurture informal networks towards creating and sustaining organisations' competitive advantage.