Social Capital: A Source of Sustained Competitive Advantage for Consumer Co-operatives

  •  Terhi Tuominen    
  •  Pasi Tuominen    
  •  Heidi Tuominen    
  •  Iiro Jussila    


Competitive advantages of consumer co-operatives have received increasing scholarly attention during the recent years. In the extant literature, co-operative social capital (derived from the co-operative values, purpose, and principles) has been identified as a source of competitive advantage for co-operatives. However, the literature lacks empirical evidence concerning how the sources of social capital are developed and utilized in consumer co-operation and what strategic benefits consumer co-operatives achieve by utilizing and developing different sources of social capital. Our paper is directed toward this end. In our study, we thematically analyze 20 qualitative interviews with executives, managers, and supervisory board chairs of Finnish retail and service organization S Group and its co-operatives.Our findings indicate that there are several sources of social capital for consumer co-operatives (e.g. interacting and sharing a common identity). Further,  we consider how these sources of social capital are interrelated to different dimensions of social capital (communal, relational, and cognitive). We also describe the strategic benefits that the different dimensions of social capital create, the most important finding being that social capital may help consumer co-operatives to achieve a sustained competitive advantage by providing resources for managing institutional dependencies and customer-relations.

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