Social Capital and Entrepreneurial Locus of Control among the SMEs’ Managers

In this study the association between social capital and entrepreneurial locus of control among small and medium-sized enterprises’ managers is evaluated. The innovation of this study is theorizing and clarifying the role of social capital and its dimensions in fostering managers' internal locus of control. Internal locus of control is one of the most frequently mentioned personal characteristics that claimed to distinguish between entrepreneurs and non-entrepreneurs. In the case of low social capital in a society, the mere provision of financial capital and human capital (through education) cannot positively boost entrepreneurship, economic growth and poverty reduction and usually will not lead to more economic participation in such societies. In Small and Medium-sized Enterprises (SMEs), the general manager is usually the founder of the business, so in this paper the relationship between social capital (and its dimensions) and internal locus of control of SMEs’ managers is investigated. In this study, social capital is measured by three dimensions: structural, relational and cognitive, as Nahapiet and Ghoshal mentioned. Also, the level of locus of control is measured by Rotter's scale of internal-external locus of control. The research data has been collected from 137 SMEs' managers in Iran. The findings show that there is a significant positive correlation between social capital and internal locus of control among managers.