Original Article Social Capital and Entrepreneurial Locus of Control among the SMEs’ Managers Roya Khayer Zahed * and Ali N. Mosleh Shirazi a Ph.D Candidate in Business Management, University of Isfahan, Iran. b Associate Professor of Management, Shiraz University. Abstract 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 inancial 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 indings show that there is a signiicant positive correlation between social capital and internal locus of control among managers. Keywords: Entrepreneurship; Internal locus of control; Small and medium-sized enterprises (SMEs); Social Capital. Copyright © 2015 by IJOMA International Journal of Management Academy (2015), 3 (1): 24-38 Received: January 2015 Accepted: March 2015 * Corresponding author: E-mail: r.khayer@yahoo.com Introduction Researchers studying social capital have stated the importance of social relationships in entrepreneurial activities and actions (Seghers et al. 2012; Pirolo and Presutti 2010). Entrepreneurship is the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying inancial, psychic, and social risks, and receiving the resulting rewardsʹ(Hisrich et al. 2005: 8). The trait approach, with its focus on entrepreneursʹ personal characteristics, has been dominated in attempts to differentiate entrepreneurs from other groups. The list of personal characteristics that is studied and/or said to describe an entrepreneur is rather lengthy. One of the most frequently mentioned personal characteristics that claimed to distinguish between entrepreneurs and non- entrepreneurs is internal locus of control (Perry 1990; and (Perry 1990; and Kaufmann et al. 1995). Internal locus of control has been one of the psychological traits most often posited as predictive of entrepreneurship (Perry 1990).