Human Capital Effectiveness as A Mediation Concept: Leveraging The Influence of Social Capital on Organizational Performance

Abstract

The rapid growth of social media users indicates that as an organization, it needs to adopt a concept of social networking as a communication tool among its members. However, in the real implication, a social capital gained cannot directly influence the organizational performance. It needs a filter to select the social network which suits the organization and runs effectively. This research introduces the novelty of Human Capital Effectiveness (HCE) as the concept of human resources as well as the competent mediator in the research gap. The sample used in this research was 176 fashion SMEs. The data were collected by randomly distributing the questionnaires. Structural Equation Modelling is applied as the analysis data method. This study aims to define the level of entrepreneurs’ readiness for managing social networking to meet the challenges in terms of innovation to foster work performance. Social capital significantly influences organizational performance of 0.846 (0.93*0.91) which is supported by human capital effectiveness variable as moderating role.