Relational capital plays a very vital role in an organization. In the present business era of Globalisation, Libralisation and Privatisation, the competition has increased manifold. The Darvin theory of ‘survival of the fittest’ has become a hard core reality. The business entrepreneur has to apply all his resources very intelligently for its survival and growth. It is very important to use intellectual capital and relational capital also to achieve the desired goals. The relational capital is an important organ of the intellectual capital. Therefore, business managers should intensify initiatives to encourage greater understanding and acceptance on relational capital elements, This is likely to increase organization performance.The relational view posits that the form, nature, and management of the relationship between two firms can provide a source of competitive advantage that can deliver “relational rents”. Firms develop relation-specific resources that are jointly owned and maintained. These relational resources augment any competitive advantage inherent in the strategic resources owned by a single firm.The purpose of this study has been to find out whether the performance of an organisation can be improved by focusing more on the relational capital. The findings of this study reveals that the form, nature, and management of the relationship between two firms can provide a better source of competitive advantage that can deliver “relational rents”. The firms develop relation-specific resources that are jointly owned and maintained. These relational resources augment any competitive advantage inherent in the strategic resources owned by a single firm.