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Social capital

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Social Capitals There are, according to Burt (1992), at least three kinds of capital in the competition of investment. First, the financial capital included any currency in hands, owned properties, reserves in banks, shares in the stock market, revenues from planned transactions in the near future, etc. Second, the human capital consisted of a person's natural qualities. These are "charm, health, intelligence, and looks" and "skills you have acquired in formal education and job experience" that allowed you to perform the best in certain duties (Burt 1992: 8). Third, here we are, the most powerful capital in the imperfect competition, it is the social capital. Social capital is the relationships with other people included close/remote, direct/indirect, formal/informal relationships, which we will mention later on, that allowed more opportunities for the investor to utilize his/her financial and/or human capital. This overall interaction of the two capitals with the social capital would provide a competitive advantage for a person's investment because he/she would get a higher rate of return comparing to those have less access of social capital (Burt 1992). Social Network Social capital is a key to be successful and social networking is the way to obtain social capital. The better quality and the higher quantity of social network you have gained, the more successful you are, in any social context, especially in the business investment. ...read more.


(3)Joint Problem Solving. Having an arm's-length relationship provided help when an individual or an organization is in difficult moment or "unforeseen contingencies" occurred. Two parties of the ties could "adapt and work things out, cooperating to make the most of a bad situation" (Carruthers & Babb 2000: 52). Yet there is also disadvantage of strong ties which we could not omit. Disadvantages from Individual Network Due to the responsibility to trust and to be trust in the embedded ties, too much of this tie might become a burden of either a firm or a person. In Japan, where many of their largest corporations formed multi-organizational groups and networks (also known as keiretsu in Japanese), the responsibility and commitment to partners are highly emphasized (Carruthers & Babb 2000). If a company did not carry out a contract or a verbal commitment (whether implicit or explicit), this company would become notorious quickly among people and organization within the network. This betrayal might just be a mistake whereas reputation within network plays a crucial role. Benefits from Weak Ties Sociologists tended to focus on the strong social networks between individuals and organizations and how these individuals and organizations could be benefited from their relationships with one another. From 1950s, some sociologist like Granovetter (1973) started to define the notion of weak ties and to look at how weak ties could also benefit individuals and organizations. ...read more.


In his studies, Burt found out that the number of structural holes, entrepreneurial opportunity, and information and control benefits are all direct-related in a player's network. Also, to achieve the higher the rate of return, the more primary structural holes between the contact and others in the player's network is required; and, the more secondary structural holes between the contact and others outside the network who could replace the contact, is needed as well (Burt 1992). Social network in whatever way must lead to success in certain level. All the arguments stated above proved that different types of social networking have overall coherent benefits. The notion of weak ties showed that a personal, close relationship is not the most important factor. A weak ties consisted of structural holes and also located on the local bridge seems to be the best tie one could have and thus getting higher rate of opportunities in the economy market. This essay is the analysis of other sociologists' studies, in which the main foci of social networks are the strength and position of one in his/her network. Yet more research could be done to find out how specialization of ties could affect one's success in his/her investment. Also, could the "negative" ties be positive in certain occasions? These two aspects are also what interested the researchers and should be further explored in future sociological studies. ...read more.

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