Why is it important to study social capital and institutions

Additionally, it helps in creating an environment of mutual trust and transparency such that people within social networks can interact for great social good. Also, social capital understanding is important in emphasizing business efficiency. Through social capital, enterprises can enhance their influence in the society. Increased dominance and participation in social affairs is an effective strategy for gaining trust and loyalty from the community. As a result, it translates to good rapport and publicity. As a result, economists are impaired in making rational choices because they lack an understanding of traditions and social roles. This can be illustrated through an example of a marketer who sells goods through their long term relationships which is totally different from those who sell to strangers.

There is a sense in which long term relations between traders and clients has an impact on their purchase behavior. Explain Granovetter’s (1973) paper, “The Strength of Weak Ties. ” What does he mean by “the strength of weak ties”? What is Granovetter’s argument? What do you think are some criticisms of Granovetter’s weak ties hypothesis? In this case, the author present two aspects that are fundamental in longevity of friendships. Considering person A and person B who are former classmates but currently are not in close contact, it cannot be ruled out that such people can’t have strong relations. There is little to claim about the overlapping acquaintances because communications between them are determined by other factors. There is the possibility that such persons will remain to be close friends and the bond between them get even stronger.