What is Social Value in Business?

Have you ever found yourself wondering, “what is social value?”

Social value can be somewhat unclear and a little difficult to understand, but today, we’ve summarised some of the key things you need to know about what social value is and how it works to help.

After all, we all have a unique social value, and our actions and interactions can directly impact how we work and the world around us. However, choosing the most optimal strategies to strengthen a firm’s social value can be highly influential in terms of boosting its reputation among the community.

What is Social Value?

Before we go any further, the first question we need to answer today is “what is social value?” Social value is a very broad term, but it most commonly refers to the social change that an entity – usually a business – can provide for a community.

Whether that relates to the local community, such as a village around a shop or the larger national community, depends on the company’s business model. As such, social value is a quantifiable method of assessing firms’ social changes for local communities.

Social value can be measured based on several factors. However, it most commonly considers three factors of sustainability in its calculation. These are:

• Economic changes
• Community changes and support
• Societal influences

Each of these three metrics will again vary from firm to firm, so it’s important to consider how your business operates to determine your social value.

Why is Social Value Important?

Social value can often seem like an easy factor to overlook in business management. Sadly, a large number of firms focus exclusively on profitability. However, this can impact their social value significantly, preventing the firm from strengthening its social value for stakeholders.

This factor can have the negative impact of generating a poorer reputation for the business; moreover, by failing to prioritise the importance of social value, businesses may commonly fail to recognise when they could be making a positive impact on local communities.

This could potentially put your firm at significant risk of losing out to other competitors; indeed, investing in the local and national communities can be a huge source of reputation boosts for businesses. In turn, by neglecting to prioritise this factor, businesses could lose out on the chance to grow their reach and broaden their market.

Remember: your business is in a unique position to make a genuine, valuable difference for local communities. With this thought in mind, it’s integral to consider how social value may relate to your business and how your firm could grow its current social value to new strengths.

Does Social Value Relate to Businesses or Individuals?

Since the term “social value” is a rather loose term, it could technically apply to businesses and individuals alike.

However, social value is usually only considered from a commercial perspective to detail businesses’ value to their local communities. As such, if you operate a business, it’s important to consider how your firm’s activities could support local social communities. 

However, remember: not all actions are necessarily good. As such, some businesses’ social values can be negative and hinder the community rather than bolstering it.

Final Thoughts

Understanding social value doesn’t have to be a significant challenge, necessarily. Indeed, while the definition is often a little hazy, social value largely refers to the value that an individual or business entity – depending on the context – brings to society through their actions and contributions.

In turn, an entity’s social value directly relates to its contributions and provides a basis for understanding how brands interact with their stakeholders and communities.