Article: Thursday 13 August
Research shows how communities can do better when individuals and organisations support each other.
Socially cohesive communities, those in which the community members care about one another, benefit from greater members’ involvement and care. That is especially important in times of hardship. Social cohesion improves the community’s ability to withstand the hardship, and by that increase its economic resilience. Local businesses, especially family firms, play an important role in that. That’s what Prof. Tal Simons reported in a new research paper titled Love Thy Neighbour: The impact of social cohesion on community economic resilience published in Organization Studies. Prof. Simons of Rotterdam School of Management, Erasmus University (RSM) worked with co-authors Dr Stephanie Koornneef, Prof. Joris Knoben, and Prof. Patrick Vermeulen to examine the role of community members, both organisations and individuals, in encountering major disturbances to the economic functioning of communities. The researchers found that among the different types of organisations, family firms stand out. Their embeddedness in the community means that they are important conduits through which social cohesion enhances the economic resilience of that community.
Interactions between communities and the organisations that live and work in them are the focus of Prof. Simons’ research in her role as Professor of Organisation Theory at RSM. “My curiosity – and thus my research – are driven by the phenomena I observe in the world and find intriguing,” she says, and explains: “Communities are recognised as central social entities with far-reaching implications for the social and economic well-being of the people and organisations that inhabit them.”
Social cohesion affects how well communities do. And that effect is even more pronounced when communities face dramatic events such as the Covid-19 pandemic which in 2020 forced firms to close overnight to stop the virus from spreading, or environmental disasters resulting from climate change.
The researchers observed that although all communities in the Netherlands faced the same adversity simultaneously, there were big variations in how well they maintained their economic resilience. They concluded from their analysis that social cohesion – via kinship and residential stability – acts as a community resource that fosters the community’s ability to withstand hardship.
To find out how this works, Prof. Simons and her co-authors gathered two different kinds of information about communities. Their aim was to explain the observed variations in resilience and identify the characteristics of communities that maintained their economic viability during the pandemic lockdowns versus other communities that didn’t do that well.
They gathered qualitative information in the form of stories and reports in newspapers, looking for the underlying mechanisms of social cohesion that facilitated mutual support between people and organisations. Stories about community inhabitants’ willingness to help others, even if this means suffering some losses, demonstrate the notion of kinship. And stories about the quick mobilization of resources due to the relationships that develop over time, show that residential stability matters too.
They assembled quantitative data from various sources about communities in the Netherlands and their local organisations over the same period. Comparing how many organisations operated in the community prior to the pandemic, to how many left or ceased to exist following it, was the researchers’ measure of the community’s economic resilience.
Family firms were found to have a particular role to play – they have unique characteristics that enable them to become a go-between in the relationship between social cohesion and economic resilience. That is so because family businesses tend to have a long-term perspective, and their proprietors are usually community members themselves, resulting in deep community involvement. These characteristics mean they are willing to go the extra mile for the community and its members when there’s an emergency.
Prof. Simons and her colleagues’ study implies that investing in local businesses and their local relationships, and creating the conditions in which they can flourish, has long-term positive implications for the economic viability of the whole community, particularly when the community experiences a crisis.
“When many such businesses are facing challenges and threats to their viability, this study reinforces the need and significance of supporting such organisations, and for individual community members it demonstrates the importance of maintaining a local, community orientation when making economic decisions, for example where to shop.”I
In summary, Prof. Simons and her co-authors found that communities matter because:
Family businesses’ embeddedness in a community makes them particularly important in supporting and preserving the community’s economic viability and its social fabric.
When individuals and organisations support one another with a long-term view in mind, all are more likely to do better.
Read Prof. Tal Simons’ research in full here: Love Thy Neighbour: The impact of social cohesion on community economic resilience.
Science Communication and Media Officer
Rotterdam School of Management, Erasmus University (RSM) is one of Europe’s top-ranked business schools. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam – a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who can become a force for positive change by carrying their innovative mindset into a sustainable future. Our first-class range of bachelor, master, MBA, PhD and executive programmes encourage them to become to become critical, creative, caring and collaborative thinkers and doers.
