Relational capital and firm performance: A case of manufacturing tea firms in Uganda
MetadataShow full item record
The purpose of this study was to establish the relationship between relational capital and firm performance in manufacturing tea firms in Uganda. To help in the study, the study objectives were formulated together with a conceptual framework that linked relational capital and its components to firm performance. Firm performance was measured using attributes like profitability and future viability. A cross sectional, descriptive and analytical research design was adopted using a representative sample of 17 manufacturing tea firms and 59 respondents from these firms. Data was collected using a self administered questionnaire to the tea firms under study. The data was analyzed using SPSS (version 16.0), then manipulated using cross tabulations, factor analysis, Pearson’s correlation coefficient and the regression to determine the relationship between the independent variables impact on the dependent variables. The findings revealed that there was a significant relationship between social relational capital and firm performance, which means that when social relational capital improves, firm performance increases. The results further revealed that business relational capital is significantly related to firm performance. The regression analysis showed that a combination of business relational and social relational capital predicted up to 28.3% of the variation in firm performance. However, it was social relational capital that was a significant predictor of firm performance. Therefore, managers should intensify initiatives to encourage greater understanding and acceptance on relational capital elements, employ a viable relational capital composition that includes building strong social relational ties with the community and competitors, and pay attention to customers and employees in order to identify their needs and provide optimal value for them. This is likely to increase firm performance.