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The paper advances the argument that social capital operates on both the supply and demand sides of the labor market. Organizations have significant needs for employees with social capital capacity and skills as they do with human capital. We articulate a theory on why organizations have such needs and how social capital may be differentially and strategically deployed to different positions. Specifically, three types of positions (the top positions, the edge positions, and the exchange-oriented positions) are identified with such needs. We formulated two hypotheses derived from the theoretical articulation: (1) the deploying hypothesis – organizations are expected to strategically recruit and deploy workers with social capital capacity and skills to such key internal and edge positions and (2) the institutional contingency hypothesis – organizations in the more competitive environment (e.g., the private sector) are more likely to show such differential deployment than those in the less competitive environment (e.g., the state sector). The hypotheses were subjected to an empirical examination with a set of firm data from China. Both hypotheses were confirmed. Further, we also found evidence for differential deployment of human capital (education and experience) and hierarchical capital (statuses of prior positions and organizations) in different sectors. We discuss the implications of the theory and findings for future research on organizations in different economic sectors beyond China and how a theory of deploying various types of capital – social capital, human capital, and hierarchical capital – in different economic sectors may be developed.

Thirty years of rapid development and economic change have created organizations and work relations in China that would have been unthinkable at the start of transition. In December of 1978, the Chinese Communist Party agreed with Deng Xiaoping to allow agricultural privatization, a stark contrast to the communes of Mao Zedong's era. This change established the financial foundation that would lead to development in eastern, coastal cities and that would ultimately fuel an extraordinary transformation of China's economy and its global position. As a result, organizational structures have changed, and new organizational forms have emerged. There have also been dramatic changes in the way work organizations behave and in the nature and implications of work. This volume provides a glimpse into the state of organizations and work at the 30-year mark. The contributors are top scholars in the field, including many who have observed and studied China's transition for decades, who are drawing on some of the most up-to-date and innovative data sources available. The chapters are samples of the current work of these researchers that, taken together, provide a snapshot of the state of research on China's organizations and work behaviors as transition enters its fourth decade.