Social capital in relation to the business models of social enterprises

Social enterprises are companies that pursue both social impact and financial profit and are gaining momentum in the Netherlands. Due to the potentially conflicting objectives of social enterprises, it can be challenging to develop a successful business model. The presupposition of this research is that social enterprises work together with different stakeholders in an effort to overcome the challenges they encounter when trying to develop successful business models. The goal of this research is to find out how social capital relates to the business models of social enterprises. To answer this research question, a comparative qualitative research was conducted among social entrepreneurs in the Netherlands. The social entrepreneurs were randomly selected from the Social Enterprise NL database and data was collected using semi-structured interviews. Findings from these data showed that a ‘Network of Peers’ and ‘Entrepreneurial Safeguards’ have a positive effect on ‘Entrepreneurship’. On the other hand, the ‘Inability to Engage Key Stakeholders’ has a negative effect on ‘Intensive Stakeholder Interaction’. Based on these findings social entrepreneurs are recommended to focus on creating shared goals and trust between the social enterprises and key stakeholders. Also, additional research should be undertaken to qualitatively test these propositions on a larger sample of social entrepreneurs.