Social Capital Theory

Group Members
Sahil Shrestha
Anmol Baral
Bidhi Mallik
Kairawi Rana
Subigya Paudel
Introduction

1. Social Capital theory states that Social Relationships are resources are leads
to development and accumulation of human capital
2. social capital theory has influences various ascpects of business and business
people’s life
3. Social capital doesn’t influences only one type of business but almost all type
of business.
4. For the very purpose , we as a group decided to look into a business to see
how social capital influences the business of common man with business.
Research problem:

 we know that no business can survive and thrive without networking.

Networking is what helps businesses to thrive, grow and further market its
product and services
 we have found that no one has ever done the survey regarding the social
capital theory. But we have found out that this theory has been in practice
but the proper research has not been conducted on this issue
 So, considering to conduct the survey on this theory was a great opportunity
for us to explore the new way of learning and also interviewing the nearby
businesses to find explore the influence of social capital on various aspects of
businesses.
Justification behind research project:

 The research is oriented towards finding out multidimensional applications of

social capital theory in businesses.
 The survey included a questionnaire including 5 questions and where the
participants were required to answer the question to the best of their
knowledge.
 The questions were particularly explained if required and the answer of each
participant was noted at a time.
 The difference is that the general population implements the theory on a
practical basis without knowing the textbook definition of theory
 . The penultimate purpose of the information obtained is to link the
implications of Social Capital theory from a day to day business person to the
theories listed in a paper.
Research methodology

 direct face to face physically

 group discussion among our team members
 Data Analysis from book
Social Capital Theory in terms of
Business
 Social Capital Theory refers to the resources available to people and business
entities because of their networks. The assets that we possess are highly
influenced by the social relations that we develop and maintain, and the
shared values that arise from those networks make up the social capital.
 According to this theory, it also states that human create connections with
other humans and those connections are used in several ways to develop their
business. They can act as a pathway to valuable assets.
 According to the survey taken by our team we got to know that the
relationship of the owner with the people in the society has helped their
business flourish in many ways as well as they were able to get the required
raw materials at a cheaper price from the people who they know very well.
Conti…

 When we asked the dairy shop owner if his relations such as family or friends
helped in development of his business. He had a positive response to it as his
connections had helped him establish this new business and he believes that,
the venture of his will run smoothly in the coming days as well due to him
being able to make good social connections.
 This theory has quite a few criticisms of its own.
 The connections of the owner can have a negative impact on the business
because his relatives may want to buy the commodity that the business is
offering on credit, which will create a negative impact on the business.
Cont…

 we conclude that Social capital plays important role in different aspects of a

business varying from marketing to sales. Social capital helps business to find
reliable source of business fund as well inventory for business.
 But social capital can’t always be beneficial for the business as sometimes it
creates the dilemmatic situation for businesses often creating loss.
Research findings

 From the interview with participant we got to know more about not only his
business but also his day to day personal life and how social capital theory is
linked with him and his business.
 For him, social capital created for positive and negative impacts. What we got
to know through this research is that social capital is fruitful for the businesses
in the initial stages. The fund required for the business and the network
needed comes all through our networking or we may say social capital. Even In
the case of another participant when he started his business, apart from bank
loan he also got funds from his relatives and people with whom he has formed
good networks. Also, social capital helps in marketing of business through
word of mouth, the larger the network, the better is the business
advertisement. But as the business grows and comes to the stable position the
social capital which was once beneficial for the business becomes a kind of
burden and starts to back fire.
Cont….

 As in the case participant 2 while we were interviewing him , his business was
already In stable position and at that point of time social capital was acting
negatively on him and his business. People with whom he had close relations
were demanding lots of credit goods and were even cash in many cases. The
problem was that he couldn’t deny them as it would create negative impact
on his business and on his image. In most of the cases the credit taken were
not returned even for months which badly affected the cash inflow of the
business. The rate of credit purchase was found to be increased during
lockdown as people had no cash on hands but they needed the goods.
Conclusion

 The purpose of this report was to research how Social Capital Theory and
business is linked together
 we decided to take interview of a dairy business owner whose shop was
located in Balkumari. We prepared the questionnaire to carry out the
interview effectively and then approached to the people.
 Our talk with participants broadened our knowledge of how tough it is carry a
small business as well and what sort of obstacle a businessman faces in his
day to day life.
Cont…

 Businessman like participant 1 and 2 has been implementing and taking

benefits of social capital since long but aren’t aware of the textbook meaning
of social capital
 he has already been implementing the very thing in his business. Throughout
the process we came to know how social capital is practically implemented
and how it has been affecting life of business owners
 We discovered positive and negative aspects of social capital.
 We also found out that the social capital or networking of business has been
back firing after the COVID hit to Nepal.