Question

. Explain the concept of social capital. Name an organization currently in the business news that seems to have a high degree of social capital and one that seems to have a low degree. Explain you answer in 200 words.

Answer 1

Social capital refers to the network of relationship among the people that represents the effective functioning of social groups through relationships, understandings, norms, values, trust, cooperation and reciprocity. It constitutes an important component of the economic capital and hence the economic growth of a company. Thus, it would refer to the degree of personal relationship and networks both within and outside the organization that allows the individuals of an organization to work more efficiently. Bonding, which leads to the formation of a social capital within a group and Bridging, which leads to the formation across the groups are the two means of social capital formation. It includes factors like trust among employees and satisfaction with the job that would result in a better outcome for the organization itself.

                                The organizations like Uber, that utilises the internet technology to deliver their functioning have a higher degree of social capital as their working includes incorporation of more people of the society and interactions of the staff within that brings in more bonds and linkages in the organization. But major companies like BMW and other motor manufacturers have a lesser social interaction as they are restricted to those categories of buyers only who forms a better, economically sound strata of people who can afford such products and also the staff interactions are lower in such an organization.