Corporate Social Capital

 

According to Gabbay and Leenders (2001), Corporate Social Capital (CSC) refers to “the set of resources, tangible or virtual, that accrue to a corporate player through the player’s social relationships, facilitating the attainment of goals,” where corporate player refers to a company and its members.

To further elaborate CSC based on the six core dimensions of Social Capital mentioned earlier: (1) social networks refers to the total number and strength of networks that exist among the members within a company, and the quantity and quality of the relationships that a company and its executives and employees have built with other stakeholders; (2) trust and solidarity can include employee loyalty and solidarity, the brand trust of a company, and customer solidarity; (3) mutual help and reciprocity behaviours can be observed in the workplace and supply chain; (4) social cohesion and inclusion refers to the cohesive and inclusive culture fostered by a company, for example in the workplace; (5) social participation may include the community projects a company organises, or the volunteer services provided by its employees; and (6) information and communication refers to the information exchange and communication among the members of a company and their stakeholders.

Companies that invest in CSC gain the trust of their stakeholders, thereby enhancing cooperation and potentially leading to better economic outcomes for the firm. CSC can be particularly beneficial during times of crisis (Servaes and Tamayo, 2017). Corporate projects which benefit the community can increase the level of social participation and generate positive attitudes in the business; these activities can also contribute to economic prosperity and sustainable development (Saeed and Arshad, 2012). The development of CSC can build reputational capital,[1] which represents a company’s stock of perceptual and social assets. Thus, CSC is essential for building a positive corporate image.

 

Many companies have incorporated CSC development into their strategy for fulfilling CSR. This includes utilising corporate expertise to actively participate in social services, helping disadvantaged groups expand their social networks and increase opportunities to broaden their horizons, thereby bringing longer-term benefits to society and the company (see Figure 1) (CIIF website).

Figure 1. Examples of longer-term benefits to companies and society when companies fulfil CSR by leveraging a Corporate Social Capital development strategy. Adapted from the CIIF website.

 

 


[1] Please refer to Fombrun, Gardberg, & Sever (2000) and Oswald (1996) for information about reputational capital.

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