Contributions Made By Social Capital Enterprises Commerce Essay


In the depleted community the social capital will be invested in the right method and right way. In the article readings provided for the course, we learned about many community developers like Greg Macleod who initiated New Dawn Enterprises in Cape Breton Island, Jose Maria arizmendiarrieta to develop the Mondragon region to start the industries and the Muhammad yunus provide the loan to the surrounding community peoples for without security.

In this article I learned the things, how to implement new ideas in the community. Every place has some resources but the problem of the enterprise relies on how to get those resources out of the community.

Social capital implements the investment in the depleted community. The social capital helps the community for achieving the process in the high level and to develop their community to increase the economic value of the firm. In this research project. I will analyze the critical review of the social capital to the social enterprise [1] .

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The concept of social capital refers to relationship that paves way for a development within and between social communities. It can also be described as a resource being utilized such as network, social trust, and norms for a mutual benefit. Some of essential forms and ways to make social capital more productive and successful will be forming a network of civic engagement, such as community areas, sports and fitness clubs and co-operatives.

A sum of resources inform of personal relationship money blending resource, collective support or of any form of action within a collectivity, actual or virtual acquired to an individual or a group to assist for the development of has be in implement in many communities, towns of many growing countries. [2] 

Social Enterprise

The term social enterprise derives from enter pricing non- profit programs. These enterprising non- profit programs use and utilize social capital or few individual contributions in starting or establishing business ventures and services operated by non- profits like societies, charities, co- operatives and public run institutions. These business and service target at blended return on their investment from the products, good they may sell and services they may provide in the market. These may provide in the market. These social enterprises may also include ventures that are privately owned which will have a very strongly blended social and financial responsibility from the investment in return. This social enterprise has very reliable revenue - generated business that has a twist social enterprise economy will operate a business venture, delivering services and producing goods to the market, but redirects its profit or surpluses to the social welfare and environmental goals.

Social enterprise business operated a non- profit or a for profit company or organization, thrives to achieve cultural, social, economic community and environmental well being and earn more revenue. On the whole the social enterprise business or service may look more revenue. On the whole the social enterprise business or service may look more similar to other business, but social enterprise business or service will strongly depend on the income or profit for its stability or support. These social enterprise business or service always has a social or environmental purpose. At least partly by engaging in trade in the business marketplace. Also special enterprises tend and try to not disturb profits of individuals running bus or service.

Theses social enterprise business or services always hold its assets and wealth from the business in trust or under charity for the benefit of the community. Also always democratically involve member from the community for the governance of the social enterprise organization. [3] 

Importance of Social Capital

Social capital resolves collective issues more efficiently. The initiative to resolve issue or a problem evolves from co-operative ideas and suggestions from all participating individuals. It also exhibits more ideas in better development of a community where each and every individual is more concerned in a productive development of the society. It also increases the social transactions more trustworthy where people trust their fellow citizens and from repeated interactions allowing neighborhood more friendly and co- operative environment. Developing a social capital also helps to identify individuals who are more concerned and particular in getting them and particular in getting them involved in developing and their community grow making him or her a part or parcel of the society.

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Some of many people participating on a social capital accelerate awareness on many individuals in making a better society for them and their future fellow citizens. With people combining their participation and involvement in pursue of better advancement of society is more cost effective, with short span of time.

With the world starting to get more globalized already the people have already started contributing towards the social capital, understanding that their responsibility to make a better environment in the society rather than criticizing the sources. Where the lack of contribution is more consistent.

Social capital has become common and most popular means of getting socialized with the society amidst their busy living schedules where ideas of vast experience being exchanged making better enlightenment and understanding of society needs. [4] 

Importance of social enterprise

There may be many reasons why a social enterprise business has huge importance on the social well fare. Primary reason to implement and develop social enterprise will be to fill the need of a society by its own people and their resources. The first and foremost benefit of creating or implementing social enterprise business will be providing more employment for marginalized societies. It also plays an vital role in making considerate change on the society towards growth and establishment, when desperately needed. It is also more responsive. The social enterprise will have no impact from shifting priorities of major foundations and government. It always works to make the changes and improvements to its society and that leads to the change and growth of the whole region or country.

The ultimate success of this social enterprise does not always on both financial profit and social impact. It most of the time sticks to either the profit that will sustain the organization or ultimate impact on the society like environmental awareness, welfare and community growth. But social enterprise always works towards positive mission success rather than the profit that the business is making. They have overarching issues the amelioration of environment and social impacts. The sustainability and vitality of the non- profit sector is to potentially help directly to the society to make it a better place to live for now and in the future.

Social Enterprise tries to create new ideas to the better outcome of their business as they are flexible, reliable and innovative. It also bridges the gap between two unsimilar characteristics together to a better understanding by co-operative plans and deeds. This will automatically initiate advancement and growth in the business sector with better environmental concern. The contribution of individual is more effective when there is an competition between two societies. Lot of room for innovative and warm ideas from a group of people as the decision lies towards the social welfare making efficient contributions in bringing completion in the business market.

Potential source of job creation and brings new trend in entrepreneurship, employment and more also there will be a solid return to the voluntary work and participation favoring fellow citizen of one's own society. [5] 

Types of Social Capital


Bringing together people in more similar situations and needs such as immediate family members, people next door and close friends.


This is more popular and effective way to get more social capital. This encompasses a bridge to distianties of similar persons like loose friends, colleagues/ Collage mates.


This is to enhance a relationship between two distinguished characters with unsimilar ideas together. These people are more likely completely outside the community. This will thus enable people to leverage a far and wide variety of information and resources more than that are available in their community [6] 

Benefits of a Social Enterprise

Social Enterprise generated from the revenue of social capital has numerous benefits to the society growth and stability. Some of them may include equality trust worthyness, environmental change to advancement, positive change on people community enormously highlighting satisfying and provide means of living social capital creating social enterprise also address some of real public issues like long-term unemployment, career change for who deserve one learning disabilities people, disabilities people, disabled either physically or mentally. People ex-offenders, ethnic minority people, mainly women and young people with education, counseling advice, employment, health, medical attire and much more. [7] 

Theory behind Social Capital

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There are numerous theories in gaining wonderful results on the social capital. Some of which will include.

Group Characteristics

This will be categorized as contributions from a group of people being members, money being contributed to the source participation frequently being relatively high, group contribution or participation in a discussion or decision making hoberogeneity of members, identifying the source of group funding.

Generalized norms

The norms are held as solid source of social capital with people being more helpful with each other securing trust of fellow people and their fairness in participation.


The social capital gain rate is more strong and high, when there is a relationship between the people of a society. This determines how people will implement a common idea or enjoy an outcome.

Every day sociability

The social capital outcome is more productive and consistent, when there is a strong durability just socializing for a time being then stepping aside of the community will bring down the togetherness.

Neighborhood connections

It is must to have a friendly connection to your neighborhood which is a part and parcel of a huge society. When you lack connection to your neighborhood there are more chances that you stay apart from your society. More you exchange relationship with your neighborhood you tend to be strongly getting socialized with the community around.


This is most important more easy to have a high social capital. This will include in identifying how many people of that particular community of society have volunteered. Building expectation of volunteering. Making brief of importance of volunteering putting fourth you people are criticized for not volunteering. Explaining how volunteering can have fair contributions to the neighborhood. Insisting the value on helping someone.


Trust plays a vital role in a society, when it comes to social relationship. This trust could have a high necessity when it comes to trust of the family trusting the people to your neighborhood mutual understand with people from other tribes and castes, business owners, Government officials, fudge, court, police, government service Providers and more important trust on the local government or service.

There may be some representation of more possible of social capital. The social capital Broadly can be seen with the above discussed dimension along with also lateral network relationships reciprocity, willingness shares values, collective and personal efficiency within participative society [8] 

Some of the key advantages of social enterprise

Enhances cohesion and solidarity social enterprise also phenomenally aimed at social development which will receive a great attention from the people.

Employment development

The major economic value that social enterprise creates will be employment development. This is found more possible because of its share with more entrepreneurs and business of large sector. There were more studies of social enterprise that found one to eight percent of people being employed or given employment opportunities to segments of the society sector entrepreurship these social these social enterprises provide employment towards the social disadvantage like long-term unemployed homeless, gener-discriminate women and physical disabled. There was situation of six million women with disadvantages from & social enterprise according to case of grameem.

Innovation/ new goods and services

Social enterprise always aims to apply innovation that is important to the economic development and social welfare. It also targets at huge issue being addressed, issues like illiteracy, drug, abuse, mental, health and HIV which are the biggest concerns or problems on a growing society. Many of these innovations have leaded the government to adopt or take it as change in the government policy that will improve the quality of the whole country:

Social Capital

Initial endowment of social capital  physical capital financial capital human capitalorganizational capitaldividends of interest  further social capital  initial endowment of social capital.

The above order of capital from the sources would explain how social enterprise and utilizes the resources and capital from various sector of interest and making it a very unique endorsement in the society management.

Equity promotion

Many social enterprises have proved in the past that they act more important in bringing the equitable society by taking social responsible issues and achieving ongoing sustainable results and impact through their mission rather than concentrating only on profit maximization. When there is a common issue is addressed by the people of the same society enable vast exchange of resources thus providing more room for equity amidst people of the same society. [9] 

Knowledge of Social Capital it promotes the enterprise performance


Social Capital structure and dimension

Social network

Relational dimension

Conative fit

Affective fit

Shared norms


Knowledge of relatedness

Knowing what

Knowing how

Knowledge transfer and creatness [10] 

Organizational performance


CVC / Corporate

Relational fit

It demonstrates close relationship between the social network, social capital, affective fit, Conative fit, trust, knowledge relatedness and norms. It acts as an input device transferring the data to the knowledge transfer.

Social Capital

The social network provides two basic things to the corporation. That is trust and cooperation. The potential resources that supports to regulate of social relationships (Baker 1990).

Relational dimension

The relational dimension contains the affective fit, Conative fit, trust and shared norms.

Conative fit

The Conative fit was considered to judge the statement and demonstrated the compatibility of intention of interaction, willingness to collaborate [11] 

Affective fit

The affective fit was measured by analyzing such as first idea, sympathy, similar to [12] the process.


The many scholars have highlighted the problem of norms and shared approach to the people's performance [13] Trust

The word trust refers to honest, expectation of regular and good cooperative with the team members. All things it will be happen on surrounding the community [14] 

Knowledge relatedness

To understand the clear view of the knowledge between both the organizations it makes a good relationship [15] they create two groups of the knowledge.

1) The partner express the knowledge of fact "what".

2) To understand the experiences and ideas [16] 

Knowledge and its transfer

The knowledge is the primary source of business for any kind of organization [17] The knowledge based businesses are maintained the knowledge purposefully important resource of the firm . [18] 

Every time organizations can find out the new knowledge's and make use of previous knowledge's through transferred with the other business sectors [19] 

Organizational performance

It performs to measure the PC. The word PC means return on investment, market share, in terms of sales. The milestones are not used by all PCs. Those that did not link to the measurement of the study. The word CVC means corporations measured overall performance in self reported.

Knowledge of social capital

In this flowchart aspect view clearly shows the knowledge of the social capital theory of the firms. They interrelated and demonstrate the importance of two concepts of the firms. The proposed model explains the knowledge relatedness and social capital together mutually referred as to "relational fit". It facilitates transfer knowledge and creates. It to turn positively influence in the organizational performance. They suggest best relational fit has encouraging impact of sustainability and development of organization. [20] 

Social Enterprise outcomes on products and services

When it comes to the product the social enterprise can produce any product like fertilizers, furniture, cosmetics, meat, cookies, pies, fireworks. Also services of social enterprise will include consultancy, recycling education, medical, household maintained, cafes and catering.

The social organization can regulate wherever from five percentage to hundred percentages of a program costs. The source of income can range from discounted services, with low income clientele or from high end entrepreneurship & business, with private clientele to government aided services and funded contracts. [21] 

Challenges faced social enterprise

There are numerous challenges establishing a social enterprise. Some of them will include competing with commercial market and undergo the same challenges that all other business may face. Strong strategy will be required to have the business running successfully. Entrepreneurs of social enterprise have to work on double or triple bottom which includes environmental, social and financial factors. This is a greatest challenge for social enterprise while comparing with traditional enterprise. Entrepreneurs have to utilize their skills and techniques in order to achieve this goal without financial support since they have a social vision.


Social capital is important in many ways for each and every social enterprise, but in the meantime there is limit where social capital lags in being effective. Social capital can build trust, cooperation and unity among the people in the community but there is a chance that it may end up focusing on a particular area without having external contacts or neighborhood involvement. Social capital will be referred as selfish in its activities which in turn may affect the social enterprise without having a support or involvement from the neighboring community. Moreover it may lead to a wrong way in which its negative aspects may go unnoticed. Thus social capital has some limitations to be effective all the time when it comes to its contribution for a social enterprise.