Published on Jun 18, 2018
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The power of the social
If you’ve been thinking the term ‘capital’ just refers to your business funds, think again.
There is a new ‘capital’ making its way into the business world; ‘social capital’, and it’s driving big changes in business structure, performance and consumer perception.
In fact, 58% of Australians surveyed by YouGov Omnibus state businesses should behave responsibly on environmental issues, while 87% think businesses should do social good.
Hardly a new concept, social capital is used to refer to the degree that connections between networks create benefits which flow through to the community at large.
A lack of social capital can include poor labour arrangements, the use of unethical suppliers or a one-way transmission of benefits from the community to the business.
More and more, businesses are actively engaging with customers and communities to show how they operate as trustworthy ‘good citizens’, providing not just jobs and growth, but community benefits.
What is driving this change?
Frustration with traditional political and social institutions, according to Deloitte Access Industries.
Deloitte state that businesses are increasingly expected to fill the gap left by institutions which can no longer stem the tide of changes in technology and jobs, while confidence in political institutions is low.
Added to that is the belief that corporate behaviour has created a world in which environmental and economic stress are rising, and young people are questioning the rights of business to continue making a profit at the expense of the future.
How does it affect you?
It isn’t just large businesses which are increasingly expected to account to customers and communities for the impacts of their business.
You can incorporate socially responsible practices into your small or medium business by actively managing your supplier chain, ensuring your employment practices are fair and engaging in your community.
That can be range from taking a few hours a month to raise money for a local charity or sponsoring an environmental initiative.
It all adds up to greater social capital, and greater consumer trust. With the growing demand for socially responsible business practices, social capital isn’t just a side project for many businesses, it is key to their continued success. Check out our previous story on ethical marketing.