Abstract

Relational capacity is the ability to develop and maintain the desired relationships with stakeholders by creating network, information and reciprocityadvantages. It aligns stakeholder theory with relational contract theory, social network analysis and related research streams to develop a “stakeholder-relational-perspective” of firm performance. This perspective views firm relationships built on relational capacity as heterogeneous, flexible and capable of becoming stronger over time. The assumption is that organizations with strong relational capacity can better leverage firm relationships to gain a sustained competitive advantage.