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Are successful clusters the result of social capital,industrial structure, government policy, culture?
Table of ContentsREFERENCES..............................................................................................................................11
MAIN BODYAccording to Møller, (2016) social capital is the one of the most important concept onwhich business firms are paying due attention to maintain their commanding position in theindustry. Social capital is the one of the important concept that heavily lead to origination ofsuccessful clusters. Social capital basically refers to the link that is between people, values thatthey shared and understanding that is developed in past years between the entities in respect tobusiness. All these things lead to generation of successful clusters in the specific geographicarea. Clusters refers to the successful firms that are innovative in nature or group of the firms inthe specific geographic area and are interconnected to each other in specific area. In manynations successful clusters emerge because in the geographic area all firms are operating similaror interrelated business. Such kind of firm’s business interests are interlinked to each other anddue to this reason firms share their values with each other in terms of supporting each otherwhenever required. Apart from this, because business interests are common and due to thisreason entrepreneurs understand each other business conditions. Thus, such kind of social capitallead to growth of the business firms that are operating in specific geographic area. This happenedbecause entrepreneurs share intellectual property and technology with each other which lead toconsistent growth of business. It can be said that social capital play an important role indevelopment of successful clusters in the nation.As per views of Nieminen and et.al., (2015) there are number of factors on which socialcapital depends and some of them are institutions, economic prospects, educational attainmentand culture. It is the institutions value system which promote them to cooperate with other firmand entities that are linked to them like suppliers. Firms cooperate with each other and due to thisreason close relationship build among them which lead to sharing of information and intellectualcapital with other. All these things lead to elevation in growth of the business firms. Social capital heavily dependent on the institutions. This is because every firm have itsown strength, value system and intellectual property. It must be noted that no company topmanagers have entire knowledge about the all aspects of the basis. Knowledge level ofentrepreneurs increased with enhancement in experience. While taking experience entrepreneurinteract a lot with the people that are operating specific institutions. Thus, sharing of values and
knowledge level among the intuitions help entrepreneurs in operating their business in propermanner and elevating its growth rate at rapid rate. All these things lead to development ofsuccessful clusters in the nation or any state. It can be said that institutions play a vital role in theformation of the social capital in the nation. Economic prospects are another factor that lead todevelopment of the social capital. In many nations of the world economic growth takes place atrapid pace. In such kind of nations large size firms work in close cooperation with the middleand small size firms. Large size firms and middle size firms work in close cooperation with eachother. Due to this reason in many situations firm takes each other help and also enter in tostrategic alliance. When firms form a strategic alliance then in that case lots of things are sharedby the firms with each other like infrastructure and services etc. All these things help firms ingrowing their business at rapid pace. Ultimately, this results in formation of successful clusters inthe nation. Clustering have impact on the competition in three ways which are productivity,innovation and efficiency. When in any specific geographic area competition increased in termsof productivity. This is because every firm target is to increase its business at rapid pace. In thisregard business firms focused on productivity and consistently make an attempt to increaseproductivity at the workplace. It can be said that social capital have positive impact on thebusiness firms. In accordance with the views of de Lange (2016) social capital is one of the mostimportant and essential aspects which is highly required for the development of clusters.Moreover, aspect of social capital lays emphasis on mobility of individuals across all the firms.In other words, social capital aspect enables other firms to attain success through the means ofhighly skilled and talented personnel. Moreover, usually small sized business organizations donot have talented human inventory who are able to perform business activities more effectivelyand efficiently. In this, by taking assistance of highly skilled workforce small sized firm wouldbecome able to perform in the best possible way. In this way, through the means of workforcemobility cluster of successful firms can be created. However, on the critical note, Giudici,Guerini and Rossi-Lamastra (2017) said that social capital aspect closely influences thecompetition which takes place between different business organizations or units. Moreover,human resources are the main assets of firm which in turn helps it in gaining competitive edgeover others. In this regard, under the case of mobility of individuals specific business unit wouldnot be in position to attain success over others.
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