Investigating formation of social capital benefits for value creation and strategy enhancement : the case of SMEs in the UK’s construction industry

Abstract

Addressing calls for research into social capital (SC), value creation (VC), and business sustainability (BST), this study answers: What strategies do individual SMEs in the UK’s construction industry apply to generate SC benefits through network engagements? How do SMEs, in the construction industry in the UK, create value from the SC benefits generated through network engagements? and How do SC benefits enhance business sustainability (BST) strategies of SMEs in the UK’s construction industry? This exploratory and interpretive study adopts a social constructivist epistemology to examine, through abductive analysis, the ‘lived experiences’ of small and medium-sized enterprises (SMEs), when their managers and/or directors engage with networks to generate SC benefits, create value, and enhance BST strategies. Forty-one interviews are thematically analysed producing seven findings. First, SMEs deliberately undertake actions to engage with strategic stakeholders. Second, SMEs prioritise stakeholders to generate SC benefits. Third, SMEs prioritise specific actions to generate SC benefits. Fourth, there are categories and representations of SC benefits unaccounted for in the SC literature. Fifth, SMEs execute strategic actions to transform SC benefits into value. Sixth, there are value representations across six categories not accounted for in the SC-VC literature. And seventh, SC benefits trigger VC and strategy enhancement in SMEs. Findings encourage managers to adjust network engagement strategies following actions suggested in this study; nonetheless, contextual limitations demand research beyond the UK and its construction industry to better understand the SC-VC-BST strategy relationship. In summary, contributions of this study are fourfold. First, recognition of premeditated actions, supporting synergistic strategies, that SMEs adopt to generate SC benefits. Second, recognition of additional SC benefits not currently present in the management literature. Third, acknowledgement of value categories and representations transformed from SC benefits. And fourth, clarification of process and nature of relationship between SC benefits, their transformation into value, and enhancement of firms’ BST strategies.