A Theoretical Socio Economic Approach

1675 Words7 Pages
According to Laville and Nyssens’s book, ‘Towards a theoretical socio-economic approach’, a community-based business is a trading organization which has the capability to rebuild and develop social capital in a community destroyed or depleted by contemporary business thinking. ( Laville, J. L. and Nyssens, M. 2001), Compared to the traditional enterprise’s ownership rights held by investors, different persons including investors hold the property rights of community-based enterprise, workers, managers and others who related to the business, and all of them determine the enterprise’s objectives. They argue that the community-based enterprise has to serve the community, and satisfy the collective benefits. “Serving the community may be…show more content…
L. and Nyssens, M. 2001) When a community-based enterprise faces with uncertainties, its social capital can diminish the transaction costs between the enterprise itself and external stakeholders. Additionally, through the community-based enterprise develops the cooperation among all its labour, social capital can help to improve the productivity; 2) social capital can reduce the enterprise’s production costs. All the mobilized social capital will create a social network supporting the community-based enterprise. “The entrepreneur taking the risk in the project does not act alone but, rather, as a catalyst relying on a group of individuals, each of whom is making a voluntary commitment.( Laville, J. L. and Nyssens, M. 2001) Similar ideas mentioned by Johnstone and Lionais in their paper in 2004, Depleted communities and community business entrepreneurship: revaluing space through place, although community-based business entrepreneurship has some traits which are familiar in traditional business entrepreneurship, the beneficiaries of the business activities are different. The profits of the traditional entrepreneurship will go to its stakeholders; however, the wealth generated by the community-based business entrepreneurship will accrue to the community. They mentioned that the community-based business entrepreneurs has the following advantages when it runes its business in a local community. First, community-based business can
Open Document