How To Rebuild Social Capital And Enhance Organizational Performance

As many organizations continue to implement new business techniques to boost performance, it is essential to use locally accessible resources, including social capital. In addition, building strong networks and collaborations that can improve a company’s success can be aided by investigating the value of people in general and human resources. To make it easier for enterprises to interact with the community, firms cannot entirely discount the significance of social capital implementation.

What is social capital?

In establishing the firm, building teams and relationships can occasionally be challenging. Social capital comprises several groups, networks, and associations or teams whose primary goal is to protect the organization from failing. It might be external, such as the specific community groups collaborating with the company, or internal, such as the company’s employees and their relationships with the leadership. Both big and small enterprises can adopt social capital for business development.

Benefits of social capital for businesses

• Builds company reputation: Building and strengthening a trusted brand can be aided by having an extensive network and strong relationships with the public. It is unquestionably impacted by the company’s adoption of social capital as a strategy to give the public a voice in how the business is conducted daily. The firm can function better if the community is connected to and attached to it.

• Enhances Diversity: Diversity is a suggested business management and leadership method for today’s organizations. Employing people of diverse ages, races, sexes, religions, and worldviews promotes diversity and enables everyone to participate in business operations, as well as helping businesses achieve their goals. The benefit of social capital is that it promotes diversity in the many workplaces of companies.

• Proper decisions: Different teams, networks, and connections inside the organization might help make effective decisions to help improve performance. In essence, social capital is renowned for doing so much because it welcomes various people with diverse viewpoints. Making the right decisions is one of the keys to enhancing a company’s performance and growth.

• Improved ideas and innovation: It is essential for firms to be innovative to keep up with market trends and performance as the business sector continues to adopt new management techniques and market research methods. One advantage of social capital is its capacity to bring together the brightest minds to contribute to creating concepts that can improve creativity.

• Improved service delivery: Usually, engaging with the community improves working conditions and output. For instance, if financial institutions have established various networks and relationships within the community, consumers can access their services, such as loans, for very little money and at low-interest rates. But due to the pandemic and its effects, such as labor shortages and fluctuations, many businesses lost sight of their relationships and networks, leading to poor social capital strategy implementation. Therefore, such firms need to rebuild social capital and improve corporate performance.

Rebuilding social capital

• Trust: Building social capital at work means developing trust among the employee groups. The interaction between employers and employees is one of the critical areas they need to improve. It aids in figuring out whether a worker is dependable for the business and does everything in their power to ensure higher performance.

• Motivation: The fundamental dynamic relationship between leadership and its subordinates is crucial to business development. Employee motivation and the many teams and networks connected to the company must be prioritized as a strategy to rebuild social capital. Practices like diversity, which might let more women and younger people sit in the boardroom, can encourage the other partners to contribute more effectively to creating and improving the company’s performance.

• Adopting social capital as a leadership strategy: The firm’s top leadership implements many cultures, such as embracing digital transformation, so it must be the same for social capital. Nevertheless, it is possible to successfully rebuild social capital as a culture many adopt with the management of the company’s deliberate involvement.


Because a company’s performance depends on how well it is represented in the community, the need for creating teams and networks has significantly increased in modern business development and management. The primary goal of business organizations must be to engage with the community by utilizing social capital to enhance their reputation.