Social Capital and Employee Behavior in an Organization: Resource for Reduction of Unproductive Waste in Agrarian Economy

Objectives: The goal of this research is to investigate the parameters of existing organisational culture in the agrarian sector as a resource for forming social capital and its impact on transactional costs formation. Method: Analytical methods such as sociological and expert interviews, content and problem-oriented analysis were used in an attempt to achieve the desired goal. The investigation of behavioural characteristics was based on G. Hofstede's parametrical models adapted to agriculture. The methods we used were intended to achieve the following goals: to reveal the essence of the agrarian sector's transactional costs while taking into account peculiar features in the field, to identify the specifics of behavioural settings and values, the specifics of cost patterns within the regional institutional interaction framework, and to analyse cultural codes and the agrarian sector's path dependence problem. Findings: The parameters of existing organisational culture were studied on the materials of the agrarian sector of the regional economy; transaction cost specifics shaped by cultural component were identified; and research on cultural codes was carried out. The agrarian sector exhibited the following characteristics: an excessive production cycle, unequal income distribution throughout the year, and dependence on natural and climatic conditions. The features outlined above demonstrate the importance of state support and a well-developed communication system. The cluster of cultural components denotes a cultural code that reflects a high level of role differentiation between men and women; prevalent collective consciousness; a tendency to avoid situations of uncertainty and clearly established courses of action and regulations; a low level of self-control and a low level of the need to satisfy basic needs. Specific transactional costs shaped by cultural determinants include: data searching, processing, and storage costs, negotiating and contracting costs, coordination costs, politicization costs, collective decision making costs, and lost profits costs. The paper aimed to help solving issues related to overcoming informal institutional limitations, also it could be applied for development and accumulation of social capital, implementation of best informal practices on costs reduction by elimination of lost profits, functioning quality increase of transactional sector of economy in general.