Social enterprises' social capital as a source of competitive advantage

Mario Tani

EMES Conferences Selected Papers Series, ECSP-T09-26
Thematic line: Management issues

The main aim of this paper is to design a strategic framework for evaluating the Social Enterprises’ Social Capital (Lin, 2001), focusing on the relationships created between the Social Enterprise and other social players as a source of competitive advantage focusing and to inform the Social Entrepreneur of their sustainability (Barney, 1996).

I’ve designed the model using a cross-disciplinary approach considering both sociological and managerial theories. In particular the model analyse the relationship the Social Capital is made of with the instruments of the Social Network Analysis (Wasserman and Faust, 1994) following an evolutionary approach (Watts, 2004) in the following step I use the tools of the Resource-Based Theory (Wernerfelt, 1984; Barney, 1991) to evaluate their potential for reaching a competitive advantage and those from the Market-Driven Management (Day, 1994; Sciarelli, 2008) to evaluate the innovation potential in the dyadic relationships and its capability to create economic value for the customer.

A first test of the model is focused on a Fair Trade Organization; I’ve chosen one of this organizations as they represent a class of Social Enterprises widespread in Europe. Moreover these organization always have to follow several policies (as “Product-project”, “Fair Prices”, and usually a selective distribution too) that significantly limit their choices of competitive behaviour in the market both limiting the cost structure of these firms and their marketing policies’ decisions.

I focus this analysis on a local organization that plays in a limited local area, the Campania Region, and is strongly embedded in a net of relationships as it manage several retail shops (3 WorldShops) and a wholesale warehouse distributing to several other local organization.

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