Role of Social Capital Strategies in Micro Small Medium

Bothy Dewandaru and Pamadya Vitasmoro

Economic faculty, Kadiri University, Jl. Selomangleng No. 1, Kediri, Indonesia

Bothy@unik-kediri.ac.id

Keywords: Social capital, Micro Small Medium Enterprises.

Abstract: The purpose of this study is to determine the use of social capital consisting of norms, trusts, and networks in

small and medium enterprises (SMEs) . In conducting this research the method used is descriptive qualitative.

All members of Primary Cooperative Tofu Tempe Indonesia Kediri as many as 15 people became informants

in this study. To obtain information from this research informant use observation and interview to informant.

The results showed that in running their business, the craftsmen in the center tofu that tinalan still maintains

social capital even though the cooperative and business group are not maximally in their activities. To develop

a social capital business consisting of norms, beliefs, and networks is important to support the business

development strategy of marketing strategy and pricing strategy. Success in the use of marketing strategies

and the right price can keep the tofu business continuity all along, even though the condition of supply of raw

materials and prices change.

1 PRELIMINARY

The most important elements of social capital are

social networks, social norms, trust, and reciprocity.

This elements enables to achieve a synergistic effect

through joint action and the creation of various

business partnerships. In other words, this is related

with the characteristics of social organization, such as

network, norm, and trust, which includes

coordination and cooperation in order to obtain the

same benefits. (Cvetanovic et.al, 2015). The theory of

social capital emphasizes information, knowledge,

and resources gained through social networks and

external networks, which help employers recognize

opportunities (consumer market information and

other business opportunities) and also acquire

external resources, information and advice from the

network (Tundui & Tundui, 2013). Some t anta ngan

which become an obstacle to the establishment,

kelangsung early life and growth of SMEs including

a lack of networking opportunities, lack of access to

finance and inadequate government support

(Chimucheka & Mandipaka, 2015).

There has not been much research that discusses

social capital in the strategy of developing SMEs,

most social capital discusses social capital with

microfinance process in business group. Akram and

Routray (2013) describes participation in local

organizations, institutional and heterogeneous

associations identified as structural and cognitive

dimensions of social capital in influencing

households obtaining credit. But when the combined

social capital dimension is social capital has no

significant effect on microfinance participation. In

another study also states that the mic ro b ank take

advantage of social capital in society and m

enciptakan relationship with physical capital to

improve living standards, empower women and

eradicate poverty in Bangladesh through the

operating level of microfinance (Fatum & Hasan,

2015).

Research on social capital in SMEs also become

interesting because SMEs has now become the motor

of Indonesia's economic movement and social capital

becomes an important part in developing SMEs

business. Wijaya (2017) reveals a group of traders

having a series the value of social capital such as trust,

norms and cooperation as well informal leadership is

quite effective in organizing group informally. This

capacity is then capable as a means solving problems

and simultaneously as a mechanism of empowerment

comes from a group of SMEs traders themselves.

Dewandaru, B. and Vitasmoro, P.

Role of Social Capital Strategies in Micro Small Medium.

In Proceedings of the Annual Conference on Social Sciences and Humanities (ANCOSH 2018) - Revitalization of Local Wisdom in Global and Competitive Era, pages 415-418

ISBN: 978-989-758-343-8

415

2 RESEARCH METHODS

2.1 Types of research

Form of research used in this research is qualitative

research with descriptive analysis . In this case

descriptive research in accordance with research

conducted by the author. Because in this study, the

author tries to describe a problem or phenomenon that

exists.

2.2 Research Sites

This study will be conducted in the Village Tinalan

School District of Kediri precisely in the Center of

Know Takwa, location was chosen because the

Center of Tofu Takwa Tinalan Village is one of SMEs

and typical food of Kediri.

2.3 Unit of Analysis

Informants selected based on their knowledge of

SMEs tofu in Tinalan Village and informants who are

business owners tofu piety in Tinalan Village which

has been incorporated in Primer Cooperative

Producer of Tempe Tahu Indonesia (Primkopti) or not

yet joined in the group. Based on this the selected

informants were: k etua Primkopti , a member of

Primkopti; business owners who have not joined in

Primkopti.

2.4 Technical Data Analysis

The first stage is to process data obtained from field

interviews, from the results of interviews selected and

adjusted to the needs of research. The second phase

of data that has been processed will be adjusted with

documents obtained from the mass media and related

agencies so that there is a synchronization between

the data in the field with the existing documents . The

third stage is After doing the decomposition of the

research data, the author intends to hold a discussion

in accordance with the results of research. As the final

stage the authors will do a generalization that aims to

clarify the results of research

3 RESEARCH RESULTS

3.1 Social Capital in Center of Tofu

Takwa Village Tinalan Kediri

3.1.1 Trust

The belief that occurs in Center of Tofu Takwa is the

trust of the craftsmen with the consumers, the

soybean raw material store , and the reseller. This

trust is done so that the supply of raw materials

remain smooth and keep running the production tofu,

then every craftsman has established confidence with

the soybean seller in the market, although Primkoti

now not sekatif first. As Sapingi said that:

"... for marketing my product has reached to

Bandung and Ponorogo, so there is a request to

be reseller Stick Tofu for sale in Bandung and

Ponorogo. Although the result is not as much as

in Kediri but I still tell Stick Tofu to there

"(Sapingi, interview result January 9, 2018).

From the information submitted by the informant

shows that the confidence that exists between the

craftsmen with the seller of soybean raw material and

resellers and consumers are able to develop a business

of tofu piety in Tinalan Village and able to compete

with the tofu traders from the Chinese.

3.1.2 Norm

Norms that occur in Center of Tofu Takwa Village

Tinalan same as in other business groups. Norms here

include the norms of cooperation in marketing the

product or in determining the price, this norm appears

for the relationship between craftsmen remain well

established . Bu Nar explains that:

"... if you determine the price here do not drop

another, do not be too low, if there is a difference

not too big" (Bu Nar, interview results, January 8,

2018).

However, the sanction of the norm is not yet well

run, although the craftsmen are members of the

cooperative, because one of the causes of

cooperatives is not the same way again because many

members who took the raw material of soybean but

the debt was and has not been paid .

3.1.3 Network

The network at Center of Tofu Takwa Desa Tinalan

is not much happening, because the craftsmen have

long got the market to market their products and

ANCOSH 2018 - Annual Conference on Social Sciences and Humanities

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already the seller to buy the raw material of soybeans

have been established for a long time. Because the

craftsmen tofu in Tinalan Village most are second

generation so they just run the existing course. The

craftsmen tofu that in Tinalan Village, they do not

need to expand the network for product marketing,

because they feel that sales in Kediri and surrounding

areas alone have yielded good results. At least every

day there are still consumers who buy their products.

"... for the price of soybeans is now stable, not as

it used to import soybean rare soybean price can

be up to Rp. 10,000. too high to climb, many

craftsmen tofu who paused ". (Vivin, interview

results January 8, 2018)

Strategy in Creative Industry at Center of Tofu

Takwa Desa Tinalan

3.1.4 Price Strategy

The selection of pricing strategy at Center of Tofu

Takwa Desa Tinalan Kediri is not derived from

soybean type whether the soybean is imported or

local, because the soybean of the two types according

to the artisans of the year the result is the same. But

what differentiates the price of tofu from Tinalan

Village and tofu China is the amount of soybeans

used in making the tofu. The big price difference

between tofu Tinalan Village and tofu china is

intentional by the craftsmen tofu. This is done

because the target consumers are also different, the

target consumers tofu from the Village Tinalan is the

market - the market so that the price is set cheaper

while tofu china is middle and above so that more sold

in the center of souvenirs . It is reinforced by Jamal

that:

"... the price tofu Tinalan and tofu the Chinese are

different, the year here more sent to the middle

market down the target, but its density is almost

the same as tofu china". (Jamal, interview results

January 8, 2018).

3.1.5 Marketing Strategy

Craftsmen tofu in Tinalan Village for marketing

strategies have not tried to develop in more recent

ways that use more information technology, the

craftsmen still use the conventional way that is sold

at home only and deposited into the markets. To more

easily market the product tofu some artisans tofu

more communication with the Department of

Cooperatives and SMEs Kediri, so often included

bazaar held by the government.

3.2 The Role of Social Capital in the

Strategy of Creative Industry In

Center of Tofu Takwa Tinalan

Village Kediri

3.2.1 The Role of Norm

 Strengthening Relationships between fellow

craftsmen tofu as well as with traders in the

market;

 Norm provides a good role in the relationship

between craftsmen and traders, norms are not

always associated with economic things that

can increase economic activity but also that

concerns the norms of everyday relations;

 Deepening Relationships with Consumers;

 With the norm in the relationship of

cooperation between craftsmen with

consumers will make the relationship will be

more closely;

 Competition among artisans become healthier;

 The existence of norms for the prohibition of

price fixing as low as possible and the

suggestion to stay healthy and do not drop each

other can encourage between artisans or

merchants to compete healthily.

3.2.2 Role of Trust

 Adequacy of raw materials provided by

soybean sellers

 The confidence that exists with the seller

makes the craftsmen able to meet the raw

materials at any time and the price changes do

not make the raw material supply change.

 Product transactions between craftsmen and

traders are still intertwined

 The trust that exists between craftsmen and

merchants makes it easier for craftsmen to

market their products and be able to expand the

market.

3.2.3 Network Role

 Craftsmen are easy to get raw materials.

Networks also play a role in the process of

getting raw materials. This means that with the

acquaintance of soybean seller will facilitate

the craftsmen tofu in getting the raw materials

at times the number of high consumers;

 Expanding product marketing. Networks in a

market can provide benefits and support the

productivity of goods. By having a wide

network then the marketing process of a

Role of Social Capital Strategies in Micro Small Medium

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product will be easier. Networking in

marketing methods can be illustrated by means

of artisans having established communication

with various industry actors.

4 CONCLUSIONS

Based on the results of research and data analysis on

the role of social capital in the strategy of Micro Small

Medium Enterprises , at Center of Tofu Takwa Desa

Tinalan Kediri can be drawn some conclusions as

follows:

The social capital in Center of Tofu Takwa is

classified into norms, beliefs, and networks. The

norms include rules for not setting a lower product

sale price, a rule to avoid taking each other's

craftsmen. Although the role of Primkopti now is not

too big, but the norm is still run by each - each

craftsman to interaction relations can work well.

Belief in the center of tofu piety is important

because it concerns about the working relationship

that occurs with each other. The belief that is formed

is the trust between the craftsmen and the seller of

soybean raw materials in the market, besides that

between the craftsmen with the seller of the tofu

products that are in the market. Given the trust with

raw material sellers and sellers of tofu products in the

market will make the production process and product

marketing can keep going.

The network that takes place in Center of Tofu

Takwa is a network of product marketing to expand

marketing, but also network to get seller of soybean

raw material. This needs to be done because at certain

times like Lebaran the demand for tofu products

increases so the need for more raw materials.

ACKNOWLEDGEMENTS

 Dean of Faculty of Economics of Kadiri

University;

 Organizers of coaching clinic;

 Colleagues and all parties who helped to this

research can be resolved as expected.

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