Corporate social capital and strategic isomorphism: The case of the Israeli software industry

Abstract

Corporate Social Capital has been receiving increasing attention in recent study of organizations. In this paper we focus our attention on strategic orientation of firms and reveal the ways they are affected by the social structure in which they are embedded. We focus on the way strategic orientation is socially determined and diffused. Our empirical application analyses 100 Israeli software firms, operating in four industrial districts. We reveal five generic business orientations. Applying corporate social capital as a framework, we find that similarity in business orientation is significantly associated with a firm's position in the inter-organizational network and with a firm's geographic location. Both network position and geographic location serve as a pool of social resources for adopting firm strategic style, deem successful in a highly uncertain sector thus creating corporate social capital.