The social capital of social enterprise: friend or foe?

The social capital of social enterprise: friend or foe? Abstract Social enterprise plays an important role in community development (Pearce 2003) being increasingly seen by governments as an alternative vehicle for service... [ view full abstract ]

The social capital of social enterprise: friend or foe?
Abstract
Social enterprise plays an important role in community development (Pearce 2003) being increasingly seen by governments as an alternative vehicle for service delivery leading policy-makers to seek ways to scale up these entities (Blundel and Lyons 2012). The social capital of social enterprise is viewed as an important sectoral attribute (Birch and Whittam 2008) offering benefits such as increased legitimacy (Ridley- Duff 2008) and collaborative networks (Meyskens et al 2010). However the embedded community networks of social enterprise may hinder these ventures (Seelos et al 2011).
Hence there is a need to explore the structure and effectiveness of social enterprise networks (Haugh 2009) as well as the quality of the inherent relationships involving an understanding of trust and reciprocity within the field (Ridley-Duff and Bull 2011). Theory suggests that organisational social capital may present an enterprise with benefits and disadvantages and is influenced by a range of factors including the ability to strategically access and manage its potential (Adler & Kwon 2002). This paper examines the nature of the social capital of social enterprise and the opportunities or otherwise it represents for social enterprise development.
The research used a concurrent, convergent mixed methods approach on a sample of 93 social enterprise leaders using surveys and face-to-face interviews. The participants were sourced from a cross-section of social enterprise organisational types from urban and regional locations in Australia and Scotland.
The findings contribute to our understanding of the nature and potential of the social capital of social enterprise. Firstly the study empirically demonstrates that social enterprise leaders exhibit high levels of trust and collaborative tendencies. Furthermore the trusted networks of social enterprise leaders are shown to exhibit a potentially beneficial mix of strong and weak connections (Burt 1997) comparing favourably with similar findings elicited from traditional small business leaders.
However the inherent trust exhibited is shown to be unrelated to the growth of social enterprises despite growth being identified as the dominant factor in social enterprise sustainability. Hence the findings indicate that social enterprises may lack the capabilities necessary to optimise the potential of their latent social capital.
The research therefore alerts practitioners to the potential of their extant networks and the need to develop appropriate capabilities and strategies if their potential is to be materialised. For policy-makers the opportunity lies in facilitating an environment that supports the development of collaborative networks to engender a framework of growing, sustainable social enterprises within the community.

Future research at a macro level might examine the nature of collaborative activity in the sector seeking out the factors that influence success. Research into the role of government and particularly the role of external agents such as intermediaries would be useful here. At a micro level further exploration of the extended networks of social enterprises would give more insight into the nature and potential of these connections.
Keywords, social capital, networks, trust.

References
Adler, P & Kwon, S 2002, 'Social capital: Prospects for a new concept.' Academy of Management Review, vol. 27, no. 1, pp. 17-40.

Birch, K & Whittam, G 2008, 'The Third Sector and the Regional Development of Social Capital', Regional Studies, vol. 42, no. 3, pp. 437-50.

Blundel, R & Lyon, F 2012, 'The long view; applying historically informed approaches to study the growth of social ventures', paper presented to 2012 Research Colloquium on Social Entrepreneurship, Said School, University of Oxford, 16-19 July 2012.

Burt, R 1997, 'The contingent value of social capital', Administrative Science Quarterly, vol. 42, pp. 339-65.

Haugh, H 2009, 'A Resource-based perspective of social entrepreneurship', in J Robinson, J Mair & K Hockerts (eds.), International Perspectives of Social Entrepreneurship, Palgrave Macmillan, Basingstoke, UK.

Meyskens, M, Carsrud, A & Cardozo, R 2010a, 'The symbiosis of entities in the social engagement network: The role of social ventures.' Entrepreneurship and Regional Development, vol. 22, no. 5, pp. 425-55.

Pearce, J 2003, Social Enterprise in Anytown, Calouste Gulbenkian Foundation, London.


Ridley-Duff, R & Bull, M 2011, Understanding Social Enterprise: Theory and Practice, Sage, London.

Seelos, C, Mair, J, Battilana, J & Dacin, T 2011, 'The Embeddedness of Social Entrepreneurship: Understanding Variation across Local Communities', Communities and Organisations, vol. 33, pp. 333-63.