3Q2 3

Relationshipcapital is usually perceived as a critical element to an organizationbecause, when used well, it can yield outstanding benefits to anorganization in this case it is viewed as an intangible asset.However, it can also act as a liability in case it is not used wellby an organization or its stakeholders. Since it entails all types ofrelationships involving customers, suppliers, partners, government,community, media, institutions, and individuals having an interest inthe success of an organization, it can be perceived to be bothinternal and external to an organization. Nevertheless, it can beconsidered to be dominantly external to an organization.

Relationshipcapital is seen to be important in enhancing the performance of anorganization, but it can be viewed to be dominantly an externalfactor to an organization for instance, from Gabriel et al. (2014),the sales performance of an organization is likely to depend on thesocial networks of a manager. This is an indication that the salesperformance of an organization will depend mostly on the networks orrelationships that a sales manager has on the external world ratheron the inside this is true because customers or clients will comefrom outside of an organization. Besides, according to Chen et al(2011), customers can aid in influencing positive sales throughhaving a positive attachment with sales representatives. Capitalrelationship may also be considered to dominantly external to anorganization because most of the external relationships can affect anorganization immensely for example, consider the relationship withsuppliers, government, and media. These relationships can determinethe performance of an organization. Taking an example of anorganization seeking capital, the relationship with donors can beconsidered of importance since it would give an organization acompetitive edge in soliciting capital (Albanese, 2012). In thiscase, donors are external to the organization. Therefore,relationship capital can be considered to be dominantly external toan organization.


Albanese,C.K. (2012). DoesYour Organization Have “Relationship Capital?” Associationof Fundraising Professionals.

Chen,T., Yeh, T. &amp Yeh, H. (2011). Trust-Building Mechanisms andRelationship Capital. Journalof Relationship Marketing,Vol. 10 (3) pages 113-144.

Gabriel,R.G., Danny, P.C. &amp Robert, W.P. (2014).Synergistic Effects of Relationship Managers` Social Networks onSales Performance. Journalof Marketing,Vol. 78, No. 1, pp. 76-94.