The role of social capital development on organizational performance

Document Type:Thesis

Subject Area:Business

Document 1

The choice of the retail businesses for this study is premised on the fact that there has been a concern on the effect of the rise of the so-called’ big-box retailing’. Walmart is one of the big-box retail stores with a giant base across the US. In this study, we try to investigate whether social capital stocks measured in communities where Walmart operates were reduced. Walmart is one of the largest enterprises with over 3600 operational stores in the United States and about 1150 in foreign nations (Goetz, S. J. It is also seen as a concept that can accrue benefits to the organization itself and those within it. Organizational social capital harbors benefits to the public since the members within the social networks can benefit from the benefits generated in these networks without necessarily taking part in these developments (Inkpen & Tsang, 2005).

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While studies have identified numerous positive impacts of social capital due to shared knowledge some downsides have also been identified such as the exclusion of other actors within the industry or making it hard for the new entrants. Organization: Founded in July 1962 by Sam Walton, Walmart began as one store in Arkansas. By the year 1990, Walmart had been able to take the top spot as the best retailer and the highest employer in the US. In multi-disciplinary research, social capital is used in the analysis of the importance of aspects such as trust, cooperation, and culture existing within people may be utilized in enhancing the socio-economic development of the society in general. This study will be significant in contributing to the body of research in enhancing social capital literature as an analytical tool in contributing to the socio-economic development of the communities in which Walmart stores are set up.

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Research Objectives While there is no investigation that has been done so far on the effect that Walmart has on the communities around where it is introduced in terms of economic growth, this research will try to address the above questions through three research objectives. • To contribute to the body of knowledge encompassing the effect that bib box retail businesses have on the economic well-being of the communities. • Assess whether these retail businesses have negative effects on social capital. The research paper to be completed does not have the boundaries or a specific scope since there a few studies that specify the circumstances in which the effects of organizational social capital are hypothesized. This remains imperative as organizational capital does not get acquired easily but rather cultivated (Arregle et al, 2007).

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The SWOT Analysis The SWOT analysis of Walmart helps us identify the key internal and external factors that affect the market strategy being employed by the company in the retail industry. Firstly, it is worth –noting that the success of Walmart is dependent on its ability to capitalize on its strengths. Walmart uses these strengths to exploit the market while also counteracting threats and ensure they remain the leaders in the retail industry. The threats are as follows; • Competition • Small and Medium Enterprises sales • Healthy trends of lifestyle (Walmart products are considered unhealthy) Preliminary Studies Preliminary research conducted for this proposal focused on the studies done on the effects that Walmart Company had. Stone (1988, 1997) was the first researcher to study the impacts of Walmart.

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In his comparative studies on the organizational performance, he found out that the sales after Walmart was set up in Iowa had increased within the host towns while sales decreased in neighboring towns and communities (those within 20 miles radius). The same results were shared by Artz and McConnon (2001) who found that entry of Walmart had shifted the general merchandise from non-host to host communities. Studies by Basker (2004) concluded that Walmart had succeeded in positively creating job opportunities in the host communities. , & McConnon Jr, J. C. (2001, June). The impact of Wal-Mart on host towns and surrounding communities in Maine. In Annual Northeast Agricultural and Resource Economics Association meeting, Bar Harbor, Maine. III. Organizational social capital and employment practices. The Academy of Management Review, 24(3), 538–555.

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