What is the Definition of Social Capital?

Definition Knowing

Social capital is the value given to the elements that make up a company, institution or social group, that is, people, economic resources, materials and machinery, to make more efficient and encourage activities that generate goods and services.

Social capital in accounting

The share capital refers to monetary contributions or assets made by the partners that make up a corporation (owners), limited partnership (participants) or company, to start the development of an activity.

The assets, wealth and property that a company owns is also considered social capital.

Characteristics of social capital in accounting:

  • The people or shareholders that make up a company make contributions of their monetary resources or assets to finance the company’s investments and increase their productivity.
  • When a company or anonymous association is constituted, the members that make it up must make a minimum contribution of financial resources.
  • The share capital is divided into shares, which represent a participation and ownership right of the company or company.
  • The founders can receive a percentage of the profits obtained by the company or company, which varies according to their contributions and participation.

An example of social capital in accounting, is when a group of people prepare to found a company or society to produce handicraft products, all contributing the same amount of money, previously established in a document, all being equal participants, in order to promote the growth and permanence of it.

Social capital from sociology

From sociology, social capital is the set of social resources (people), which integrate institutions, organizations or social networks to execute actions of common benefit.

These institutions foster relationships of trust, commitment and cooperation among its members, and facilitate the economic, cultural and political development of a specific objective.

They also establish rules of coexistence, determine objectives and goals to be carried out through the capacity of collaboration and sociability of its members. A leader is chosen and the members of the group or institution are motivated to participate in the proposed activity.

Authors such as Bourdieu, Coleman and Putnam have developed concepts about social capital, as one of the research branches of sociology and social sciences, highlighting its value and importance.

Following this line, international institutions such as the United Nations Development Program (UNDP) or the World Bank have also developed their concepts of social capital, arising from congresses and research in which various researchers of international importance participate.

Examples of social capital from sociology, are the groups that are formed as social networks to work together and solve a problem that affects their community, either due to issues of insecurity, urban hygiene, among others.

Social capital contributions:

  • It allows the development of public policies through social and institutional relations.
  • Contributes to the work of public services.
  • It brings knowledge and resources to community programs.
  • It generates collective value to groups of people for social purposes.