Relational Capabilities: Is it an influencer to business financial performance?

Abstract

Relational Capabilities (RC) building is a key research area, including decisions heuristics, management of collective uncertainty or any situation that affects more than one actor. It is valuable not only for performance as a whole but also as an asset that generates profitability as well. In this direction, the study conducted a meta-analytic investigation of the association of RC with firm’s financial performance from the RC literature. The study also examined the role of moderating factors – knowledge management and partners integration - in influencing this association. For the meta-analytic review, 54 empirical studies that had examined the link between RC and firm’s financial performance were sampled. The study adopted the ‘random-effects’ model using weighted mean of raw correlation coefficient as a measure of the effect size and calculating the path effects using moderator’s meta-regression. The results showed the existence of direct and positive association of RC on firm’s financial performance and the existence of moderators, partner integration and knowledge management, impact this association revealing that at an aggregate level there is a higher positive association between RC and firm’s financial performance.