SOCIAL CAPITAL


SOCIAL CAPITAL
Man is a social being, meaning that we are bound to meet people and network with them all with the sole aim of attaining resources.

Wikipedia defines Social Capital as a form of economic and cultural capital in which social networks are central.

Social Capital transactions are marked by reciprocity, trust and co-operation, and market agents produce goods and services not mainly for themselves, but for common good.

Economists have defined Social Capital as a factor of production.

This means that if you can’t be trusted as a business man or woman, in a matter of time, you will lose your best resources namely: Your Staff, Your Vendors and Suppliers, Bankers and Investors (Capital) and the business.

In my opinion, Social Capital is equated as your trust capital. It is your earnings in trust capital that you either draw from or deposit into.

You must work on growing your social capital at all times, and you must be trusted at all times.

Little wonder the Chinese emphasize the word “Guanchi” or “Guanxi” (关系) and “Trust” (相信)

Oh by the way! The Chinese will never do business with you, if they don’t trust you, especially if they haven’t taken tea or coffee with you or had lunch with you.

A friend of mine and an NLP Expert Rajiv Sharma says that your Social Capital is a function of what you say you will do and what you end up doing.

This definition is intense and it means you are a function of what you can be entrusted with.

I was speaking with a childhood friend of mine who said to me that one of our childhood friends has depleted his social capital.

When I quizzed him further to really understand what happened. 

He told me that he entrusted the friend in person with a huge sum of money as an investment to help startup a business.

A decade later, the guy is yet to pay him the money, yet he is coming to ask for money to investment in his business from the same guy.

Infact, these were the words my friend used: How can he expect me to come and invest in a business that the founder cannot be trusted to pay his debts.

My conclusion: Social Capital is about Trust.


I end with this question: Can you exude trust in your relationships even when dealing with someone who lives close by or far away? 

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