Reviewed by Aug 27, 2020| Updated on
What is Social Capital?
The positive result of human interaction is social capital. The positive outcome may be measurable or abstract and may include valuable knowledge, new ideas, and prospects for the future.
In business terms, social capital is the contribution to the performance of a company that can be linked to personal relationships and networks, both inside and outside of the company.
The term social capital is also often used to describe a company's personal relationships that help create trust and respect among employees, contributing to better success in the business.
Understanding Social Capital
Broadly speaking, social capital is a collection of mutual ideals that enables any group of people to successfully work together to accomplish a common goal. Social sciences are pervaded by learning how social capital functions or does not work.
It is arguable that social capital today is as valuable as financial capital. The Internet enables professionals to form many variations of global social connections and networks. In terms of diversity, social capital is no longer limited and local.
Types of Social Capital
The Internet has revolutionised the idea of social capital, essentially generating an infinite range of appropriate social interactions for every occasion. For instance:
Web service consumers from Airbnb and Uber to eBay take advantage of social capital to make a pick based on previous customer feedback. By later leaving their own posts, the same people add to social capital. Organisations running these sites use feedback as a core component of their quality assurance programmes.
Social networking sites, such as Facebook, strengthen personal interest-based connections, such as interests, or past encounters, such as a shared hometown or a past employer.
Social networks have now become a key source of social capital for small business owners, who are able to advertise their goods and services online as easily, if not cheaper, than big business.