INTRODUCTION
Rationale of the study
A State Capital Enterprise (SCE) is defined as a business where the State does not possess the majority of the charter capital or shares It operates as either a joint-stock company or a two-member limited liability company.
In recent years, State-Owned Enterprises (SOEs) in Vietnam have been undergoing restructuring, with many reporting pre-tax profits primarily due to government support While various studies have explored this issue, they often overlook the significance of intangible resources, particularly social capital Recognized for its impact on performance across micro, meso, and macro levels, social capital enhances tangible resources by fostering support, coordination, sharing, and cooperation for mutual benefit (Helliwell & Putnam, 1995).
Social capital is a valuable resource that can develop over time, significantly benefiting enterprises by fostering innovation and enhancing entrepreneurship Research conducted in Vietnam during the 2000s highlights these advantages, demonstrating that social capital not only promotes sustainable corporate operations but also strengthens resilience capabilities, enabling organizations to effectively respond, adapt, and allocate resources.
The study explores the significant role of social capital, entrepreneurship, and resilience capability in enhancing the performance of Small and Medium Enterprises (SCEs) in Vietnam, particularly during challenging environmental conditions These factors not only mitigate risks but also foster entrepreneurial growth, leading to competitive advantages and improved operating results By developing a structural equation model, the research aims to illustrate how social capital influences performance through entrepreneurship and resilience capability, highlighting their interconnected impact on business success.
A review of existing research reveals that while numerous studies have examined the individual effects of social capital, entrepreneurship, and resilience capability on performance, there is a notable gap in understanding how these factors collectively influence the performance of social enterprises (SCEs) in Vietnam Specifically, no studies have addressed the direct simultaneous impact of social capital, entrepreneurship, and resilience capability on performance, nor have they explored the indirect effects of social capital through entrepreneurship and resilience capability, or the indirect impact of entrepreneurship via resilience capability.
That is the reason that the writer chooses to do the dissertation: “Impact of Social Capital, Entrepreneurship and
Resilience capability on performance of State-capital
Research objectives
− Study on simultaneous direct effects of social capital, entrepreneurship, resilience capability to the performance of SCEs in Vietnam;
− Study the indirect effects of social capital through entrepreneurship and resilience capability to the performance of SCEs in Vietnam;
− Study the indirect effects of entrepreneurship through resilience capability to the performance of SCEs in Vietnam;
− The implications for administrators to improving the performance of SCEs in Vietnam.
Subjects of study and Research scope
- Subjects of study: The dissertation will focus on research
This article explores the direct and indirect influences of social capital, entrepreneurship, and resilience capability on the performance of social enterprises (SCEs) in Vietnam It highlights how social capital directly impacts SCE performance, while also examining its indirect effects through entrepreneurship and resilience capability Additionally, the study investigates the indirect role of entrepreneurship in enhancing performance via resilience capability, providing a comprehensive understanding of these interrelated factors in the context of Vietnam's social enterprise sector.
- Research scope: SCEs operating in Vietnam as of August
Significance of the study
By a data set of 720 state-capital enterprises up to August
In 2019, a dissertation conducted in Vietnam utilized both qualitative and quantitative methods to demonstrate the significant impact of intangible resources—specifically social capital, entrepreneurship, and resilience capability—on the performance of small and medium-sized enterprises (SCEs) This research not only highlights the critical role of these intangible assets but also contributes academically to the understanding of SCE performance in the Vietnamese context.
The simultaneous influence of three key intangible resources—social capital, entrepreneurship, and resilience capability—significantly affects the performance of small and medium-sized enterprises (SCEs) in Vietnam, particularly as these businesses undergo transformation and restructuring processes.
− The indirect impact of social capital on the performance of SCEs in Vietnam through entrepreneurship and resilience capability
− The indirect impact of entrepreneurship on the performance of SCEs in Vietnam through resilience capability.
Dissertation structure
To fulfill above mentioned research objectives, the study is structured as follows: Chapter 1: Introduction, Chapter 2:
Literature review, Chapter 3: Research methodology, Chapter 4: Research results, Chapter 5: implications and limitations.
LITERATURE REVIEW
Corporate social capital
Social capital is a concept that has been investigated in various fields such as economics, education, society, and psychology It is a multidimensional construct, which includes:
Social capital encompasses a system of networks and human trust, emphasizing the interconnection between coordination and cooperation for mutual benefit (Helliwell & Putnam, 1995; Putnam, 1993; Quyen, Nguyen, & Huynh, 2017; Van Nguyen, Nguyen, Thuy, Nguyen, & Huynh, 2016) This concept has been explored across individual, organizational, and national levels.
This study examines corporate social capital, defined as the collective resources of an enterprise that thrive within a quality relationship framework and a network structure composed of influential leaders.
1997), an enterprise’s external network (Brashear Alejandro, Yang, & Boles, 2011), and its internal network (Brookes, Morton, Dainty, & Burns, 2006)
The scale of corporate social capital includes both network quality and network structure, shown in the following table (adapted and developed from the original scale of Huynh Thanh Dien, 2012):
Social capital of leaders (LD)
Network structure and quality of closed networks (proximity) Network structure and quality of open network
Network structure and network quality among individuals who are members of the business
Network structure and network quality among departments within the enterprise
Network structure and network quality between individuals and corporate internal divisions
Network structure and horizontal network quality
Network structure and vertical network quality
Entrepreneurship
Entrepreneurship is a strategic approach characterized by the pursuit of opportunities amid intense competition, emphasizing innovation and a readiness to embrace risks (Purwanti et al., 2020) It comprises three key components: proactivity, innovation, and risk-taking Covin and Miles (1999) identified four types of entrepreneurship: sustained regeneration, organizational rejuvenation, strategic renewal, and domain redefinition The essence of entrepreneurship lies in the capacity to identify business opportunities, launch new ventures, take calculated risks, foster creativity and innovation, and ultimately achieve sustainable outcomes.
Entrepreneurship is evaluated through three key dimensions: proactivity, innovation, and risk-taking (Kraus et al., 2017) The following table provides a detailed breakdown of these aspects, adapted from the original scale developed by Bolton and Lane in 2012.
Businesses always aim to achieve the best results
Enterprises always take advantage of positive action first Enterprises always proactively see opportunities in difficulties
Enterprises are always proactively formulating strategies and operational plans before all situations
Enterprises are always innovating in all activities
Enterprises are always investing in finding new ways to solve problems
New ideas are encouraged in all business processes
Enterprises are always innovating to best serve the business interests
Enterprises are not afraid of risks
The business always takes strong action to achieve its goals in a situation involving a risk
Enterprises choose to handle calmly to minimize risks
Businesses take strong action by venturing into the unknown
Resilience capability
Resilience capability is defined as the ability to maintain positive adjustments in challenging conditions, encompassing four key components: adaptability, anticipatory, agility, and flexibility To enhance resilience, businesses should focus on capacity building, growth, and balancing exploitation with exploration, while managing performance and resilient systems to sustain competitive advantage The essence of resilience capability lies in the ability to react, respond, and positively adjust to uncertainty and environmental turbulence, alongside the agility and flexibility to allocate resources effectively for sustainable operations.
Scale of resilience capability is as follow (inherited from the original scale of Chu, 2015)
Enterprises often apply new marketing techniques
Enterprises regularly introduces new products and services
Enterprises often improve products and services
Enterprises often adopt new technologies and skills
Enterprises regularly monitor changes in the market Enterprises regularly monitor the competitors' actions Enterprises regularly monitor the changing preferences of consumers
Enterprises regularly monitor legal / regulatory changes Enterprises regularly monitor economic changes
Enterprises regularly monitor technological progress changes
Enterprises quickly respond to changes in consumer demand in general
Enterprises quickly react to the appearance of new products and services from competitors
Enterprises quickly introduced new tariffs to respond to changes in prices of competitors
Firms rapidly change (ie expand or reduce) the variety of products / services available for sale
Businesses quickly switch suppliers to take advantage of lower costs, better quality or improved delivery times
Enterprises quickly apply new technologies to produce better, faster and cheaper products and services
Enterprises rapidly expanded into new regional and international markets
Enterprises are flexible in allocating marketing resources to the market with a diversified product line
Enterprises are flexible in allocating production resources to produce a wide range of products
Enterprises have flexibility in product design to support a wide range of potential products
Enterprises have the ability to adjust their product strategy to match their products / services to the target market segment
Enterprises have the ability to effectively rearrange organizational resources to support the company's intended strategies
Enterprises have the ability to coordinate resources to develop, produce and distribute products intended to target markets
performance
Performance is a critical metric that evaluates how effectively a business operates to deliver value to both internal and external stakeholders, as highlighted by Antony & Bhattacharyya (2010) and Adams & Ctg (2014).
Performance measurement encompasses various methods, focusing on business success and evaluating the effectiveness of organizational operations (Kennerley & Neely, 2003) It can be assessed using both objective and subjective indicators According to Chu (2015), a common scale for measuring enterprise performance includes three key dimensions: profitability (PR), customer satisfaction (SA), and market efficiency (ME).
Scale of performance is as follow: (inherited from the original scale of Chu, 2015)
Enterprises have a high level of customer satisfaction Enterprises have a high level of value supply to customers
Enterprises have a high level of response to customer needs
Enterprises have a high return on investment (ROI) Enterprises have a high revenue on sales (ROS)
Enterprises have the ability to achieve high financial targets
Market expansion (finding new customers and markets) The level of old customer retention
Relevant background theories
2.5.1 Theory supports the relationship between social capital and performance
Social capital theory posits that social capital functions as an economic resource, where firms invest in relationships to reap benefits (Lin, 2002) These resource-oriented networks are crucial for enhancing performance, as they facilitate access to vital information, particularly in imperfect market conditions Additionally, business leaders' decision-making is significantly influenced by their social connections, which can provide valuable and powerful resources based on their strategic positions within the network Ultimately, the network of relationships that constitutes social capital enables businesses to thrive by enhancing their performance and facilitating market participation.
* The theory of the strength of weak ties (Granovetter,
In 1973, the significance of open networks and the ability to leverage diverse external resources was highlighted Weak ties, which represent indirect connections through bridges to outside relationships, enhance the extroversion of these relationships by breaking local boundaries This aspect is crucial for businesses to recognize, invest in, and utilize, as it forms the foundation for strategic business cooperation.
2012) Indeed, compared to strong linkages and closed networks, weak ties and open networks do not require much effort to invest and maintain
Structural gap theory, as proposed by Burt R S (2009), enhances the weak ties strength theory by highlighting the importance of mediated networks Intermediaries act as crucial connectors between distinct network structures, facilitating the flow of resources This theory effectively elucidates the vital role of brokers in business operations, demonstrating how they bridge gaps and enhance connectivity within networks.
Institutional Theory posits that strong decentralization by business leaders, along with active interpersonal and inter-departmental coordination, enhances internal social capital By fostering cooperation and alliances with external stakeholders, businesses can significantly boost their performance A clear coordination mechanism allows members to work effectively without distractions, supported by strict reward and penalty policies that facilitate swift decision implementation This theory underscores the role of social capital in improving business performance.
Resource dependence theory posits that businesses rely on relationships with stakeholders and external organizations to thrive, emphasizing the importance of external social capital By effectively leveraging and utilizing these external resources, companies can mitigate uncertainties in their operating environment and lower transaction costs, as highlighted by Pfeffer (1972) and Williamson.
1984) , thereby improving performance This theory contributes to the explanation of social capital increases performance
2.5.2 Theory supports the relationship between social capital and resilience capability
Resource theory posits that a firm comprises a collection of resources and competencies that foster competitive advantage and a privileged position (Penrose, 1959) This theory highlights the significance of corporate social capital as a valuable resource that can enhance a business's stability and sustainability By promoting flexibility in the allocation, exploitation, and utilization of resources, businesses can operate sustainably Additionally, this flexibility is a key aspect of resilience capability, further reinforcing the notion that corporate social capital plays a crucial role in a firm's long-term success.
(a type of resource) has a significant effect on corporate resilience capability
Resource dependence theory posits that businesses rely on relationships with stakeholders and external organizations, highlighting the importance of external social capital in navigating uncertainties within the business environment (Pfeffer, 1972) This theory emphasizes that the ability to effectively exploit and allocate resources is crucial for enhancing resilience capabilities Furthermore, it suggests that corporate social capital, particularly external social capital, plays a vital role in increasing the flexibility necessary for resilience.
Thus, resource dependence theory (resource dependence theory) supports the argument that corporate social capital has an impact on resilience capability
2.5.3 Theory supports the relationship between social capital and entrepreneurship
Resource-advantage theory posits that possessing certain resources enhances a business's proactive spirit and innovation, crucial elements of entrepreneurship Corporate social capital serves as a valuable resource that can provide a competitive edge, thereby significantly influencing entrepreneurial success This theory underscores the importance of leveraging social capital to foster an innovative and proactive business environment.
2.5.4.Theory supports the relationship between resilience capability and performance
Organizational resilience theory offers valuable insights into how businesses maintain their performance amid stress, barriers, and environmental uncertainties, filling a gap in current organizational theory This theory emphasizes that the ability to anticipate challenges is a crucial aspect of resilience, significantly enhancing firm performance even during unpredictable fluctuations in the business landscape.
Contingency theory emphasizes the impact of unpredictable internal and external factors on business performance It highlights the necessity for organizations to develop adaptive structures and effective corporate governance to respond to these random influences By doing so, businesses can enhance their performance, as their ability to navigate these variables significantly affects their operational success Ultimately, a proactive approach to managing environmental uncertainties is crucial for achieving high performance in the business landscape.
Resource theory posits that a business comprises various resources and competencies that contribute to its competitive advantage and unique market position (Penrose, 1959) This theory emphasizes that firms with high adaptability can enhance their performance by effectively transforming resources into innovative products and services (Akgün & Keskin).
2.5.5 Theory supports the relationship between entrepreneurship and performance
Resource-based theory posits that the transformation of resources is fundamental to entrepreneurship, as highlighted by Casson (1982) This theory emphasizes that the application of newly created resources enhances business performance over time Entrepreneurship is identified as a key resource, where a greater entrepreneurial spirit correlates with higher profit margins and business growth surpassing industry averages This impact of entrepreneurship on performance is particularly significant in volatile industries, as noted by Teece and Pisano (1994) Therefore, resource-based theory effectively illustrates the substantial influence of entrepreneurship on overall business performance.
Competition theory posits that innovation, a key aspect of entrepreneurial spirit, is intrinsically linked to the pursuit of knowledge This learning process enables businesses to gather valuable insights that drive technological advancements, enhance products, and improve services, ultimately leading to better business performance.
2.5.6 Theory supports the relationship between entrepreneurship and resilience capability
Resource-advantage theory highlights the importance of a proactive mindset and innovation as essential elements of entrepreneurial spirit, which are intrinsically linked to resilience This theory provides valuable insights into how entrepreneurship can enhance the resilience capabilities of businesses, enabling them to effectively respond to challenges and adapt in a dynamic environment.
The theory of competition posits that creativity and innovation are essential for businesses to break free from initial equilibrium and achieve new levels of success.
Develop hypotheses and model
The relationship between social capital and performance
Corporate social capital consists of three components: leaders' social capital, internal social capital and external social capital (Huynh Thanh Dien, 2012)
Effective leadership fosters strong social capital, leading to positive relationships and timely support from stakeholders, including government and media entities This dynamic, as noted by Tushman (1997), significantly enhances operational outcomes and overall performance.
Strong internal social capital fosters cooperation, enhances support and coordination, builds trust among team members, and encourages the sharing of knowledge and experiences This collaborative environment reduces transaction costs and optimizes resource utilization, ultimately leading to improved performance.
Strong external social capital enhances both vertical and horizontal relationships, particularly for consulting organizations and government entities This improved connectivity facilitates access to valuable information and advice, enabling organizations to seize opportunities and achieve significant results, ultimately boosting overall performance.
Social capital plays a crucial role in mitigating risks and enhancing performance, as evidenced by various studies (Casey, 2002; Woolcock, 2001; Narayan & Pritchett, 1999; Dasgupta, 2000) While previous research indicates a positive correlation between social capital and performance, there is a notable lack of studies focused on this relationship within the context of Vietnamese small and medium enterprises (SCEs) Therefore, the author proposes the following hypothesis.
H 1 : Social capital has a positive impact on the performance of SCEs in Vietnam
Relationship between social capital and resilience capability
Corporate social capital consists of three components: leaders' social capital, internal social capital and external social capital (Huynh Thanh Dien, 2012)
Capable and highly qualified leaders significantly enhance business performance by fostering strong relationships with both internal and external stakeholders, including authorities and media organizations This connectivity enables businesses to navigate challenges effectively, anticipate potential issues, and maintain a proactive stance in adapting to their environment Furthermore, leaders who demonstrate agility and flexibility in resource allocation contribute to sustainable operations Ultimately, the social capital of these leaders plays a crucial role in bolstering the resilience of the organization.
Strong internal social capital fosters cooperation and knowledge sharing, leading to enhanced support and coordination within organizations High levels of trust and consensus create stability, enabling businesses to be proactive and adaptable to environmental changes This agility allows for effective resource allocation, ensuring organizations can swiftly respond to potential challenges Ultimately, internal social capital significantly boosts resilience capabilities.
External social capital, characterized by strong horizontal relationships among consulting organizations and vertical connections with government entities, plays a crucial role in helping businesses anticipate and adapt to environmental changes This robust network enables organizations to be agile and flexible in resource allocation, enhancing their resilience and ability to respond positively to various situations.
Social capital plays a crucial role in enhancing resilience capabilities, as noted by Noel Johnson (2010), and is instrumental in effectively managing challenging business situations, according to Putnam (1995, 2000) While existing research indicates a positive correlation between social capital and resilience, there is a notable lack of studies focused on this relationship within the context of Vietnamese SMEs Therefore, this article proposes the following hypothesis.
H 2 : Social capital has a positive impact on resilience capability of SCEs in Vietnam
Relationship between social capital and entrepreneurship
The measurement of social capital encompasses three key dimensions: leader social capital, internal social capital, and external social capital (Huynh Thanh Dien, 2012) Leaders with high qualifications and strong abilities foster positive relationships with government entities and media organizations (Tushman, 1997), enabling them to navigate challenges and drive business success Their proactive and innovative approach, coupled with a willingness to take risks (Covin & Slevin, 1991), enhances their effectiveness in achieving organizational goals without the fear of personal accountability Consequently, a leader's social capital plays a crucial role in boosting entrepreneurship.
Strong internal social capital fosters cooperation, support, and knowledge sharing within organizations, leading to increased stability through high trust and consensus (Brookes et al., 2006) This environment empowers businesses to be confident and proactive, encouraging them to innovate and take calculated risks to meet their goals without the fear of personal accountability (Covin & Slevin, 1991) Ultimately, internal social capital plays a crucial role in enhancing entrepreneurship.
High external social capital fosters strong horizontal and vertical relationships, particularly beneficial for consulting organizations and government entities This connectivity aids businesses in navigating administrative hurdles and technical requirements, providing essential information, valuable advice, and collaboration opportunities As a result, firms become more proactive, innovative, and willing to take risks in competitive environments, ultimately enhancing their entrepreneurial capabilities and resilience in challenging situations.
Social capital plays a crucial role in driving enterprise innovation and entrepreneurship, as evidenced by research from Landry & CTG (2000) and Cheng-Nan et al (2007) While previous studies indicate a positive relationship between social capital and entrepreneurship, there is a notable lack of research in Vietnam, particularly concerning Vietnamese small and medium-sized enterprises (SCEs) Therefore, the author proposes the following hypothesis to address this gap.
H 3 : Social capital has a positive impact on the entrepreneurship of SCEs in Vietnam
Relationship between resilience capability and performance
Resilience capability enables businesses to proactively predict and adapt to their environment, fostering agility and flexibility in resource allocation to effectively respond to various situations (Chu, 2015) This adaptability not only creates opportunities for competitive advantage but also drives product and technological innovation, enhancing customer satisfaction, profitability, and market efficiency Furthermore, resilience capability has a positive correlation with performance during environmental changes (Chu, 2015), indicating its role in improving overall business performance While numerous international studies have explored resilience capability in volatile environments, research in Vietnam, particularly concerning Vietnamese small and medium-sized enterprises (SCEs), remains limited, prompting the need for further investigation.
H 4 : Resilience capability has a positive impact on performance of SCEs in Vietnam
Relationship between entrepreneurship and performance
Entrepreneurship enables businesses to proactively adapt to changing situations, creating numerous opportunities for competitive advantage through product and technological innovation This adaptation not only meets market demand but also enhances customer satisfaction and profitability while improving market efficiency Additionally, research indicates a strong positive correlation between entrepreneurship and organizational performance, suggesting that fostering an entrepreneurial spirit within organizations can lead to better outcomes By innovating management methods and reducing operational costs, entrepreneurship significantly boosts profits, customer satisfaction, and overall operational efficiency.
Previous research indicates that entrepreneurship positively influences performance; however, there is a lack of studies focusing on this topic in Vietnam, particularly concerning Vietnamese Small and Medium Enterprises (SCEs) Therefore, the author has formulated the following hypothesis.
H 5 : Entrepreneurship has a positive impact on performance of SCEs in Vietnam
Relationship between entrepreneurship and resiliencce capability
RESEARCH METHODOLOGY
Research process
Hình 3.1 Summary of research implementation process
Discuss research results Managerial implications Research report
Cronbach ’Alpha checksum correlation checksum, eliminates low correlation variables (