سرمایه اجتماعی در میان سطح مقامات ارشد شرکت ها و اثرات آن بر ارتقاء اجرایی در کره جنوبی

Our study provides both theory and evidence about the effect of social capital possessed by individual managers of Korean corporations on their likelihood of promotion to the next hierarchical level. We argue that (1) executive social capital can be dimensionalized into internal and external components, and both components are positively associated with executive promotion and (2) the effects of social capital on promotion are moderated by several contextual factors. We tested our hypotheses with a sample of 4759 executives in 199 large Korean companies from 1990 through 1999. The results provide strong support for the predicted main effects, but limited support for the predicted moderation effects.

Korea has transformed itself from one of the poorest countries in the world into an industrial powerhouse during the last several decades. The country now has a democratic government and is home to large modern corporations whose technology and management compete with companies in the most developed nations. Many Korean companies are governed by highly refined standards and rules. Yet there is strong tendency among Korean companies to use informal connections such as family, regional, and school ties as a means of doing business, securing information, and making important decisions (Yee, 2000). Our paper develops a theory of Korean executive promotion using the concept of social capital and tests the theory using a sample of more than 4700 officers of large, publicly traded Korean companies. Following Belliveau, O’Reilly, and Wade (1996, p. 1568), we define social capital, as “the resources available through social network and elite institutional ties that an individual can use to enhance his or her position”. The Korean setting is important for several reasons. First, in Korea, social capital is very important in executive promotion decisions. Sharing Confucian traditions with China, the family or clan plays a central role in modern Korean Corporations (Ungson, Steers, & Park, 1997). Like the Chinese word guanxi, meaning a social connection to authorities or important institutional players, the Korean term inmaek refers to the same type of instrumental personal ties. The strength of inmaek (personal connections) is critically important in Korean society. As the bond between people is strengthened by close and personal relationships, it can easily transcend institutionalized rules and formal regulations (Yee, 2000). Thus, we expect that social capital is a more important predictor of promotion decisions among Korean firms than among firms in the west. Secondly, while Korea is a major industrial power and its large companies frequently have global reach, little has been written about the executives who run Korean companies and how executive promotion decisions in those companies are made. Most Korean scholars would agree that inmaek based on Hyôl-yôn (blood relation or family ties), Jie-yôn (regional ties), and Hak-yôn (school ties) play critical roles in Korean business. However, there have been very few studies about the characteristics of social networks of executives in Korean corporations. Our study is among the first to focus on Korean executives’ social capital and the first we are aware of to consider its role in executive promotion. Finally, the Korean setting permits us to measure social capital, as we discuss in detail later.

Several results of our study are noteworthy. First, our results indicate that social capital is very important to executive promotion. Our results indicate that both external and internal social capitals are important to promotion, and that the different types of social capital provide different resources to executives. Most previous studies of social capital have exclusively focused on either internal social capital (e.g., Podolny & Baron, 1997) or external social capital (e.g., Pennings, Lee, & van Witteloostuijn, 1998; Useem & Karabel, 1986). By considering both, as well as contingent factors, we provided a more fine-grained explanation of the effects of social capital on promotion. Second, our study is one of few to focus on executives other than CEOs and the only one we are aware of to examine the role of social capital in Korean executives’ promotion. Scholars in strategic leadership have primarily focused on mobility at the very top (e.g., Cannella & Lubatkin, 1993; Cannella & Shen, 2001; Kesner & Sebora, 1994; Vancil, 1987). By focusing on the promotion patterns of non-CEO executives, our study helps to clarify the mobility of executives as a whole and explains how executive social capital is an important factor in promotion decisions. The significant main effect of tie strength to the CEO and the significant interaction effect between external social capital and sales growth rate imply that sociopolitical factors play an important role in executive promotion, as suggested in the executive succession literature (Cannella & Lubatkin, 1993; Ocasio, 1994). Finally, one of the most important contributions of our study is that it points out and empirically demonstrates a curvilinear relationship between internal network size and the likelihood of promotion. While the number of contacts at higher organizational levels is expected to increase the likelihood of promotion, too many contacts decrease the likelihood. This evidence sheds light on a relatively less studied, but important question in social capital research: Is network size a mixed blessing? From a senior manager's perspective, if incumbent top executives are quite similar to one another and closely interconnected, having too many dense ties with the executive cadre may not be beneficial. Because there might be concern for homogeneity among top managers, a senior manager with too many ties to others in the top management group appears to be disadvantaged. Whether this disadvantage derives from the maintenance costs of a large network or concern for homogeneity is an important theoretical and empirical question that should be addressed in future research. Our study has limitations that also deserve comment, and implications for future research. First, we do not intend to imply that social capital is more important than human capital in promotion decisions. The limitations of our data do not permit us to comment on this question, but the issue is clearly an important avenue for future researchers. Second, one of our measures of external social capital, degrees from prestigious universities, can be used as a proxy of both human capital and social capital For example, Useem and Karabel (1986) argued that the patterns of career development among the American business elite reflect the advantages of both upper-class family background and educational credentials from elite schools. As Useem and Karabel noted, and our results suggested, degrees from elite institution bestow advantages in the labor market, but it was not clear whether these advantages were from a university's high quality education or from graduates’ social background such as their school's alumni network. Labor economists would emphasize the education's role as a measure of human capital and ultimately, productivity. In sociology, graduation from an elite university might be a measure of social capital rather than human capital. In any case, the role of elite education is an important empirical question for further research. The extent to which degrees from elite institutions contribute to creation of human capital versus the extent to which they contribute to creation of social capital remain unanswered and should be examined further. The reason why education from elite schools matters may also differ from one country to another. In a strong meritocratic and collectivistic society like Korea, degrees from elite institutions may contribute more to social capital than to human capital (cf., Lee & Brinton, 1996). Thus, it would be interesting to replicate this study with samples of both Korean executives and American executives. Regarding this issue, Ishida (1993) found that the effect of social origin on higher education attainment was greater in Japan than in either the US or the UK. Ishida also found that university prestige had a strong positive effect on both current income and occupational prestige even after controlling for social origins. Finally, our study involved relatively new measures of social capital. While family background, degrees from elite institutions and demographic similarities have been widely used as proxies of social capital, regional ties are not common measures of social capital in most research of this type (e.g., Belliveau et al., 1996 and D’Aveni, 1990; D’Aveni & Kesner, 1993; Useem & Karabel, 1986). Growing up in the same town as other top managers is an important source of social capital in a country like Korea (Choi, 1983 and Lee, 1994; Shin & Chin, 1989). In other countries, however, regional ties may be less important. For example, in the United States, which is much larger and more culturally and ethnically diverse than Korea, regional ties may not yield promotion benefits. Therefore, the external validity of these results should be evaluated in other settings (for example, top managers of Japanese companies or those of Chinese or Taiwanese companies) where the culture and organizational hierarchies are comparable to those of Korea.