The Effect of Human Resource Management Activities on Social Capital Dimensions and the Strategic Performance of SMEs

INTRODUCTION: In the current turbulent conditions, proper use of all assets, especially human capital is the success factor for businesses and Human human resource management is a strategic approach for the recruitment, development, management, motivation, achievement, and the commitment of organizations’ key resources. In the case of successful implementation of human resource activities, it is expected that the created social capital have long-term strategic interests for the organization. Accordingly, the present study aimed at investigating the effect of human resource management activities and social capital dimensions on the strategic performance of small and medium sized companies THEORETICAL FRAMEWORK: The results of prior studies have indicated that the characteristics and dimensions of social capital and human resource management have a bilateral and significant relationship with each other and this case is more among professionals. The human resource management activities significantly correlated with measures of performance and strategy of firms. Structural social capital refers to the pattern of communication between the parties; this means that alternating interaction between multiple hierarchy levels and sectors lead to shared advantage with more reliable information. Such interaction between people causes knowledge sharing that leads to the formation of stronger communication. The findings of other studies show that the relational, structural and cognitive dimensions of social capital affect the strategic performance of different companies. METHODOLOGY: Regarding the objectives, this study is classified as an applied one, but in terms of the methodology it is a descriptive survey. The study sample consisted of 306 employees of SMEs of industrial city of Kerman. In this study, a questionnaire was used to collect data and its reliability was obtained to be 0.97 using Cronbach's alpha coefficient. RESULTS & DISCUSSION: According to the results of the regression coefficient, the impact of human resources activities on cognitive social capital is 0.85 and because P value is 0.001 which is smaller than 0.05, at this level, H0 is rejected, and thus it can be said that human resource activity has effect on cognitive social capital. The results of the regression coefficient of the impact of human resource activities on relational social capital is 0.79 (P = 0.001<0.05); therefore, at this level, H0 is rejected, and thus we can say that human resources activities have effect on relational social capital. The results of the regression coefficient of the impact of human resources activities on structural social capital is 0.40 (P=0.001<0.05); therefore, at this level, H0 is rejected, and thus we can say that human resources activities have effect on structural social capital. The results of the regression coefficient of the impact of human resources activities on strategic performance is 0.58 and because P value is 0.014 which is smaller than the 0.05, therefore, at this level, H0 is rejected, and it can be siad that human resources activities have effect on strategic performance. The results of the regression coefficient of the impact of cognitive social capital on relational social capital is 0.09 and because P value is 0.47 which is greater than the 0.05, at this level, H0 is not rejected, and it can be siad that human resources activities do not have effect on relational social capital. The results of the regression coefficient of the impact of structural social capital on relational social capital is 0.41 and because P value is 0.014 which is smaller than the 0.05; therefore, at this level, H0 is rejected, and thus we can say that structural social capital has effect on relational social capital. The results of the regression coefficient of the impact of cognitive social capital on strategic performance is 0.37 and because P value is 0.011 which is smaller than 0.05; therefore, at this level, H0 is rejected, and it can be said that cognitive social capital has effect on strategic performance. The results of the regression coefficient of the impact of relational social capital on strategic performance is 0.24 and because P value is 0.64 which is greater than 0.05; therefore, at this level, H0 is not rejected, and it can be said that relational social capital does not have effect on strategic performance. The results of the regression coefficient of the impact of structural social capital on strategic performance is 0.14 and because P value is 0.58 which is greater than the 0.05; therefore, at this level, H0 is not rejected, and it can be said that structural social capital does not have effect on strategic performance. CONCLUSIONS & SUGGESTIONS: The results suggest that human resource activities have significant and positive effect on relational, structural and cognitive dimensions of social capital and the strategic performance. However, in this study, it was found that among the social capital dimensions, it was just cognitive dimension that had influence on the strategic performance. Due to the impact of human resource activities on social capital dimensions and strategic performance it is suggested that more attention be paid to planning and implementation of these activities in the industry. Accordingly, it is suggested if it is possible activities should be taken to create opportunities such as experience in different parts of the organization through job rotation and encouraging employees to participate in decision making and team building. According to the impact of cognitive social capital on strategic performance it is suggested that companies take activities to integrate values, goals and visions with their partners to benefit from social capital of networks. For example, joint ventures can be an effective strategy. The elements of social capital lead to understanding of customers and markets, product development, and market.