Investigating the effect of social capital on starting a home business

Master's Thesis in the field of Industrial Management-Production Management

February 2013

Abstract

In recent years, home-based business has received attention in our country. These businesses have many advantages, such as significant potential in increasing employment in the country and very low start-up costs, and they are divided into small and medium businesses. Since starting a business is considered an important source for the economic development of countries, investigating the factors affecting the starting of home businesses can be effective in the development and support of these businesses. The process of starting a business is affected by many factors, of which social capital is one of them. According to Putnam's definition, this concept means those elements and features of the social system that facilitate coordination and cooperation among the people of a society to achieve mutual benefit. Therefore, this article examines the effect of social capital in starting a home business. This research is a descriptive-correlation type, which was carried out by a survey method, and T-test and one-way analysis of variance were used in the data analysis. After consultation with experts, a questionnaire consisting of 36 questions with five options on the Likert scale was prepared and finally 385 people working in home businesses and 130 people without business in Shiraz city were surveyed. One of the findings of this research is that four factors of generalized trust, institutional trust, network of formal relations and network of informal relations were identified as the influencing components of social capital on starting a home business, and 2 factors of the network of formal relations and the network of informal relations were identified as the most important distinguishing components of the two groups. Also, the variables of income, type of activity, work history and membership in the trade union had a significant relationship with the amount of social capital of home business workers. Key words: home business, social capital, network. Relationships, trust, transaction norms, etc.

Chapter One

Introduction

In today's world, on the one hand, organizations are becoming smaller and more flexible day by day, and on the other hand, the boundaries between home and workplace are disappearing. According to the theory of human and reasonable development[1], work in the future will not be in the service of others, but it is an activity that humans have done for their own organization, with their own management and control, and to meet their needs (Alvani, 2008: 291), and for this reason, in recent years, the number of those who work independently and for themselves, especially the owners of businesses and home businesses, has grown increasingly. (C.I.N.B.R. [2], 1998). In general, home business[3] is not a new phenomenon, but as a result of the changes and developments that have occurred in economic and social activities today, more attention has been paid to it. Home business is one of the suitable solutions for the development of small and medium employment, especially for a large population of women and young people who have sufficient skills in doing some work but cannot be attracted to the market due to the inappropriate employment market (Nahid and Ghanbari, 1389, p. 6). It should be noted that starting a business from home can give opportunities to people in the first step of entrepreneurial activities, but if they are not properly supported, it can have negative effects. Avari has to be employed on his own people. In fact, if the policies to increase self-employment do not consider these issues, there is little chance for those businesses to become self-employed, and it puts them at risk of failure and business termination (Thompson et al[4], 2009: 235). in order to develop­ And support for home businesses is essential. Plans with goals and eyes. The appropriate measure can be implemented in short-term and long-term time periods. Therefore, knowing the dimensions of social capital effective in starting home businesses will help policy makers so that the policies in this area are efficient and effective.

Researchers have shown that the process of starting a business is affected by many factors that can generally be divided into 2 groups: psychological factors and non-psychological factors. Psychological factors refer to the personal characteristics of people; While non-psychological factors deal with the environment surrounding the individual, social capital can be mentioned among the non-psychological factors (Shin [5], 2003: 96). Social capital is one of the relatively new concepts that have been raised in the social and economic studies of modern societies. This concept refers to the links and communications between the members of a network as a valuable resource that, by creating norms and mutual trust, makes the members' goals come true (Farazmand et al., 1385:125). In this research, in order to investigate the effect of social capital on starting a home business, to examine and compare the capital We focus on the social welfare of home business workers and people without a business.

1-1-Research problem

Entrepreneurship and running a business is considered an essential part of an economy and society and an important source for It is the economic development of countries. Since entrepreneurship and running a business follows social and personal values, it has attracted the attention of politicians and researchers in various fields and fields. Shin and Venkataraman [6] state that why, when and when some people can identify business opportunities and launch them and subsequently make the right decisions during the entrepreneurial process, comes down to three major activities: discovery, evaluation and exploitation of business opportunities (Shin and Venkataraman, 2000). One of the important factors in identifying, evaluating and exploiting opportunities is networking and social factors that are effective in it. Social networks are not only effective in identifying opportunities; It is also important in collecting resources, allocation and successful start-up, as well as managing the company after its establishment. In fact, the process of starting a business is affected by various factors, of which social capital is one of them (Shin, 2003: 96). Social capital can be assumed as a social capacity that has positive social consequences and can strengthen other positive social norms. This capital, as a distinct component from human and physical capital, is the main axis of communication in business (Taggart, 2009: 4). Therefore, despite the importance of social capital in identifying, evaluating and exploiting opportunities, so far not much research has been done on the impact of social capital factors on business operations. Considering the importance of home businesses in recent years, the problem of this research is whether social capital and its factors have an effect on the start-up of home businesses. 1-2- Importance and necessity of research based on experiences. Successful countries in the field of small and medium businesses, one of the suitable fields for the development of entrepreneurship in societies is the development of home businesses, which, despite the need for limited capital, has a significant ability to grow employment and increase wealth production (Yagoubi Farani and Mohadi, 1389: 1). Although these types of businesses are often part of the hidden and informal sector of the economy (Tippel [7], 2006); But they play a significant role in the wealth and economic growth of a society and the development of its social capital. According to some thinkers, home business opportunities cause self-employment in order to solve the shortcomings and meet the local needs of a developed economy and pave the way for sustainable economic development (Hargan [8], 2001: 7). Laying the groundwork for the development of home businesses can be supported and taken care of by the government as one of the job creation programs in the country (Yagoubi Farani and Mohadi, 1389: 1).