Internal social capital in restaurants: when close relationships become a barrier to knowledge sharing and product enhancement

Social capital is essential for success in tourism and hospitality businesses. Internal social capital develops through positive social relationships at work. Drawing on social capital theory, we investigate how internal social capital shapes knowledge sharing and innovation behaviours in hospitality businesses. We focus on positive and negative effects and draw attention to the tipping point of internal social capital. Results from 523 survey responses from owner managers and employees of 293 luxury restaurants show: (1) A tipping point is confirmed, where organisational outcomes of high internal social capital turn from positive to negative. (2) Whereas close employee relationships at work form a barrier to employees’ knowledge sharing intention, they continue to foster innovative product enhancement. (3) Initial positive effects of employees’ knowledge sharing intentions on product enhancement convert into a negative effect. This research sheds light on the dark side of internal social capital and extends the tourism and hospitality literature with fresh knowledge and a more nuanced understanding of the effects of too close relationships in the demanding hospitality workplace environment. Theoretical and managerial implications are offered.