Chapter 2 Social Capital and Sustainability Strategies

The chapter identifies in social capital the strategic resource for the implementation of sustainability strategies in smalland medium-sized enterprises. The relational nature, typical of these actors, has drawn attention to social capital and emphasised its significant strategic role, which, with a responsible view, would enable these actors to reinforce their relational resources. Relationships are thus vital connectors and the stakeholder engagement amongst the best viable approaches to sustainability development in small-sized enterprises.The chapter covers a literary review on the concept of corporate social responsibility and identifies the distinctive features of the sustainability strategy while describing business advantages and stakeholders’ benefits. It is highly important for a SME to be part of a network or a business cluster considering their amplifying impact on relationship-building strategies. Supply chains, clusters and local systems are thereby privileged survey units especially in the view of the growing productive processes de-verticalisation and the Italian economic and productive tissue primarily characterised by small and medium-sized entities. Through an overall review of literature, the chapter investigates the concept of sustainability in these networks, from their conceptions to the underlyingmotivations and conditions for success. It also identifies the need to establish a link between business social capital, productive systems competitiveness and institutions in order to create to “unique” sustainable networks bearing the economic and cultural characteristics of their local contexts. 2.1 Engagement and Social Capital for SMEs’ Sustainability The prospect of social capital is a useful means for identifying and altogether suggesting SMEs’ sustainability paths. In literature, the study of corporate social responsibility (CSR) in large enterprises should be based on the stakeholder theory, whereas SMEs should focus on the concept of social capital (Perrini 2006) while engaging in responsible conducts © Springer International Publishing Switzerland 2017 A. De Chiara, Implementing Sustainability Strategies in Networks and Clusters, CSR, Sustainability, Ethics & Governance, DOI 10.1007/978-3-319-40201-7_2 25 by virtue of their strong ties to the local system (Harvey et al. 1991; Perrini and Tencati 2008). It is undoubtedly more complicated for a single small-sized enterprise to adopt responsible conduct compatible with the standards for the protection of the environment and human rights as outlined in the international guidelines (Global Compact 1999; OECD for multinationals 2000, 2001, ISO 26000, etc.). By contrast, social responsible behaviour in supply chains and networks is more likely to be feasible for SMEs, considering their opportunity to share costs, gather the contributions of each actor and make a real impact on sustainable development. In this respect, precisely because SMEs play an important part in the supply chains, the adoption of ethical conduct in line with environmentally friendly production processes and strategies along with the respect for human dignity and social inclusion should not exclusively be the concern of a single actor. Conversely, such behaviour should apply to the majority of entities in the supply chain to increase the level of sustainability with positive impact on the entire community while preventing the unethical misconduct of others from undermining their efforts. This insight, although influenced by the different production chains, may be applicable to several organisational structures of production processes. Nowadays, the tendency to refer to business in terms of “processes” clearly shows that the running of production processes goes generally beyond the organisational boundaries and requires the active participation of different units either inside or outside the business. Furthermore, the logics of competition and global research excellence have nourished the unbundling of production processes along with supply chains de-verticalisation and encouraged businesses to oversee primarily those highly effective activities or processes whose distinctive resources and skills may significantly boost their competitive advantage. The supply chains showing an increased division of labour and a high business specialisation in different activities widely support the aforementioned rationale (De Chiara 2013). In these circumstances, therefore a low environmental impact, human rights protection and recognition may be the effective outcome achieved by the joint efforts of all parties within or outside the supply chain in a broader network dimension. In SMEs, the ability to maintain relationships and build confidence among stakeholders is considered the strategic resource par excellence. If social capital is a strategic asset, its management is strategic too (De Chiara 2012). For the purposes of responsible social capital management, SMEs will be able to strengthen the relationship nature of these actors (De Chiara 2012), in other words, the corporate social responsibility will help increase SMEs’ social capital. Several scientific contributions have underlined the existent positive relationship between responsible behaviour, its ecologic and/or social value and the possibility to enhance businesses relational nature by improving the social capital (Thompson and Smith 1991; Spence et al. 2003; Perrini 2006). In a self-referenced circle, the higher the confidence gained by management and/or entrepreneur, the less complex the governance (Jones and Thomas 1995). If social consensus and the enterprise’s overall credibility is 26 2 Social Capital and Sustainability Strategies