Social embedding as a solution to a control problem?
Evidence from Vietnamese small business
Social capital, the sum total of all social relationships that can be used to an
individual’s advantage (Coleman 1990; Bourdieu 2001), is often seen as expeditious for
economic exchange.1 Such capital is held to be located directly or indirectly within the social
relationships of particular individuals (Burt 1992; Lin 2001). Social relationships sometimes
function as privileged conduits through which economically-valuable information may
rapidly flow (Katz and Lazarsfeld 1955) and through which influence can be exercised
(Marsden 1983). Information flow and influence are closely related to the two common
mechanisms for performance improvement, “exit” and “voice” (Hischman 1970), and they
are the basis for emotive trust, often thought to facilitate economic exchange (Zucker 1986;
Gambetta 1988). Social relationships are held to have economic value because, in certain
circumstances, they allow privileged access to information and result in the ability to exert
influence – whether between creditor and borrower, supplier and customer, or employer and
employee. Through such mechanisms, social capital can affect overall efficiency and
allocation of benefits.
Economic exchanges (transactions), such as those between creditors and borrowers,
customers and suppliers, and between employees and employers, have increasingly become
seen as problematic (Williamson 1975). Arriving at fair terms of exchange can be difficult.
1 The literature discussing this possibility has become quite large. DasGupta and Serageldin (2000), Lin (2001), and Portes (1998) provide good overviews. The possibility that social factors impinge upon economic outcomes runs through almost all research on social action including status attainment research (Blau and Duncan 1967), the socialization of elites (Domhoff 1970), job search (Marsden and Hurlbert 1988), and elite action (Mills 1956). The issues are numerous and diverse. No single review could hope to catalog, much less resolve, them all.