Social Capital by Design: Structures, Strategies, and Institutional Context

Abstract

We examine social entrepreneurship from a structural perspective, distinguishing between two structures of social capital and their associated entrepreneurial strategies: structural holes and the 'disunion' strategy versus social cohesiveness and the 'union' strategy. These two strategies represent alternative ways social entrepreneurs access and mobilize the resources inherent in the structure of a social network. The disunion strategist exploits structural holes between alters by keeping them apart; the union strategist creates value by bringing together disconnected alters. The frequency, legitimacy, and success of each strategy depends on the 'design' of the institutional context in which social entrepreneurs operate. Disunion strategies tend to occur in organizations and markets characterized by sparse, disconnected, and differentiated networks, coupled with competitive rules of exchange, opportunism, and an individualist orientation; union strategies tend to occur in organizations and markets characterized by dense, connected, and undifferentiated networks, coupled with cooperative rules of exchange, norms of reciprocity, and a collectivist orientation. We illustrate the distribution of triadic strategies in a specific institutional context by taking a triad's census of alliances in the global automobile industry and testing the structural hypothesis about the use of disunion and union strategies.