Social Capital Influences On Business Groups’ Diversification Strategies

Abstract

The purpose of this paper is to explain the relationship of the Turkish Business Groups’ unrelated diversification strategies and their social capital usage. The aim of this article is to reveal whether business groups that are different in using social capital have also differentiated in their diversification strategies. Theoretical framework of the study intends to determine the relationship between the strength of the edges between these organizations which have established relations within the social network, their role in developing social capital, and their diversification strategies. To this end, business groups are compared with respect to their entrance to different sectors and their role in spanning structural gaps. In this study, it has been found that business groups that span structural gaps are differentiated in the extent of unrelated diversification strategies. This research also explains the impact of the positions of business groups within the social network on their diversification strategies.