Network structure gives a snapshot of the ties between entrepreneurs and their firms and reveals how they link together.
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Researchers e. This interdependence introduces both opportunities and constraints on the actions of individual entrepreneurial firms, which create a structure Easton, Network structure is the pattern of direct and indirect ties between the actors who are nodes in the network. Thus, an actor's differential positioning within a network structure affects resource flows and, hence, entrepreneurial performance Hoang and Antoncic, Two common measures for network structure are size and centrality.
Size is the number of direct links between the focal actor and other actors Hansen, ; Jenssen, ; Singh et al. Though size and centrality identify the extent to which resources can be accessed, they fail to determine their content and importance to the entrepreneurial firms Hoang and Antoncic, For example, the absence of ties, or different types of ties, may influence the access to diverse resources.
Granovetter broadly classified ties as being strong i. The absence of ties between actors is defined as structural holes and actors can profit by establishing ties that bridge these otherwise unconnected actors Burt, Burt viewed that entrepreneurs are not only aware of the power of the bridging position presented by structural holes but also can achieve high returns to their entrepreneurial business by brokering the connection with others.
Thus, the entrepreneur holds an information and control advantage and has the opportunity to wield power or influence over those who are other unconnected to the broader network Burt, ; Krackhardt, Therefore, most researchers prefer to map the direct links between entrepreneurs using the measure of the size and strength of ties.
Seeing the network as structure adopts the static approach to measure the aggregation and interdependence within network but inevitably ignores the dynamic process of the relationships changed by internal and external forces within a network. Network changes and dynamics, which are the central features of networks, are the subject of research on network development and its evolution over the venture formation and growth process.
There are three network development models: growth, structural, and strategic. Network changes are examined from a number of perspectives. The first is an organizational formation process in which social, business, and strategic networks are combined at the outset and extend throughout the whole organization Larson and Starr, The third is a network evolution process in which the entrepreneurial network evolves from a social network to a business network and finally to a strategic network Brown et al. Adopting the social and socioeconomic exchange theories, the growth model focuses on relationship and governance changes Larson, The growth model, however, falls short of explaining the network composition and changes in network structure that are associated with the creation of the firm.
Hite and Hesterly considered the entrepreneurial firm as a focal actor in the network. In addition, it addresses the entrepreneurs' both compulsory and voluntary aspects of networks Curran et al. On the one hand, entrepreneurial behavior is constrained by the network structure, and network change is path dependent due to exogenous factors outside the control of entrepreneur. On the other hand, entrepreneurs could intentionally create, adapt, and control specific relationships to reshape the network structure, which embodies the actors' rational calculation e.
The strategic model focuses on the entrepreneurial egocentric network and suggests network management as an entrepreneurial growth strategy. Entrepreneurial firms need to actively manage the network composition relational mix and to build up relations proactively in response to various resource needs at different stages. The strategic model acknowledges that both weak and strong ties fulfill different functions and so are important to the growth of the firm.
However, details of the relational capability are not provided. For example, is there a limit to the relational capability? What would cause the firm to reach the limit of its relational capability? Also, the three development models outlined here depict only the development process of network in the growth of the firm; they also identify neither the interlocking mechanisms of network relationships, governance, and structure that manifest the dynamics of the network nor the role of the entrepreneur in managing and changing the networks.
Thus far, the entrepreneurial network has been reviewed in the context of relationships, governance, structure, and dynamics. The first three dimensions describe the mechanism and sheds light on the effects of networks on the outcome of entrepreneurial endeavors. The last reveals its dynamic feature in association with the growth of the firm. However, a conceptual gap in the research exists that prevents further development of a distinctive theory that describes the entrepreneurial network.
First, current network research overlooks the interplay between the entrepreneurial network elements and thus fails to offer a unique and complete picture of the network for the entrepreneur. The three entrepreneurial network dimensions—relationship, governance, and structure—are dependent on one another and are specifically important in the network development process Hite, ; Hoang and Antoncic, However, the network as dynamics dimension fails to consider the interplay among the other three network dimensions.
Some researchers Chell and Baines, ; Elfring and Hulsink, ; Larson, tend to use interpersonal relationships to study only socially motivated entrepreneurial behavior. Hence, the network as a relationship stream of research cannot adequately show how social relationships influence entrepreneurial behavior Simsek, Lubatkin, and Floyd, Notably, multiple relationships e. The network as structure research approach deals only with the accessibility of the external resources that entrepreneurial firms need to obtain from specific personal or interfirm relationships.
Liao and Welsch argued that the range of relationships and positions of the entrepreneur within networks determine the accessibility of external resources. Solely using the structural approach will evoke the question of why a particular actor—that is, a broker conceptualized by Burt —could hold the position of structural hole for a long time without someone else creating a tie and bypassing the broker position.
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This question could only be addressed by examining the governance mechanism of the relationships between the broker and separate actors. The continual interaction among the network dimensions of relationships, governance, and structure implies that the network changes interactively. Network dynamics, the interlocking mechanism, should be incorporated into the framework. Thus, either approach could only provide a partial explanation.
The four dimensions should be acknowledged in the interplay and considered coherently to depict the network mechanism in the entrepreneurial process. Second, Aldrich and Zimmer used the social dimensions to examine the behavior of entrepreneurs in networks. Johannisson further advocated adding personal networks in the study of entrepreneurial networks.
Given that social and economic exchanges are important to social and business networks, Hite and Hesterly suggested examining the egocentric network in entrepreneurship research. Also, the entrepreneurial behavior is affected by the entrepreneur's intention on network rather than by the network members' collective action. Current network research ignores the proactive and reactive measures undertaken by entrepreneurs.
Entrepreneurs may make proactive efforts to change their networks to pursue their intentions and goals. On the other hand, entrepreneurial firms are forced to adapt to environmental changes reactively when the external environment brings changes to the connected actors of the firm. Thus, the volitional aspect—that is, the human agency Emirbayer and Goodwin, ; Emirbayer and Mische, —of the entrepreneurial behavior should be examined. Human agency is the capacity of socially embedded entrepreneurs to seize opportunities according to their personal ideals, interests, and commitments in response to the problems posed by changing situations.
Thus, entrepreneurs may perceive a unique set of opportunities and constraints in their own entrepreneurial networks and should undertake strategic decisions related to the networks. Monsted , p. Mattsson suggested two similar strategic network dimensions: network adaptation and external resource dependence. Network adaptation refers to the manner in which the entrepreneur deals with the relations in the network.
The network can be based on integrative adaptation i. External resource dependence refers to the strategies dominated by the use of the firm's own internal resources or the use of external resources. Thus, it is not known how entrepreneurs perceive their networks when facing the opportunities and constraints imposed by the environment and what strategic network decisions they would undertake to act on them. Having provided this background information, the research outlined in the present article investigates the interplay among the structure, relationships, and governance of the network and describes the dynamics of the network and their impact on strategic network decisions.
As suggested in the literature previously reviewed, although Chinese social, capital, and network are viewed as factors crucial to entrepreneurial success in collective Chinese society Chu, ; Redding, , ; Shi, , there have been no major studies of the content and development Chinese entrepreneurial network or the mechanisms underlying them.
Zhou et al. However, adopting the institutional analysis, Guthrie argued that the significance and importance of using guanxi or the social network is declining in China. Guthrie found that while Chinese managers often view social connections as important in business transactions, they tend to generally view the importance of guanxi in market relationship as secondary to the market imperative of price and quality. The research findings of Millington, Eberhardt, and Wilkinson on buyer—seller relationships in current urban industrial China not only supported Guthrie's view but also acknowledged the importance of relational contracting, which is characterized by economic and impersonal involvement rather than guanxi.
However, the value, importance and quality of guanxi depend on continual social interactions, such as mutual help rendered, ongoing demonstration of reliability and trustworthiness, and economic motivations, such as good prices offered and the provision of tips and relevant market or business information.
Kiong and Kee further argued that the major factor in understanding Chinese networking relationships is not guanxi ; rather, the mechanism of interpersonal relationships is deemed much more important. However, the importance of guanxi should be acknowledged. First, Millington, Eberhardt, and Wilkinson mainly focused on the spot transaction in buyer—seller relationships, and it is reasonable to state that relational contracting is of first importance in building market relationships.
Nevertheless, as firms grow and develop, guanxi will be an effective asset for entrepreneurs to access capital and other kinds of support. Thus, this research examines the quality and content of Chinese entrepreneurial networks and the mechanisms underlying them. This exploratory study adopts a qualitative multiple case study method 1 to acknowledge the context dependency of the nuances of Chinese entrepreneurial network; 2 to capture the core concepts of relationship, governance, structure, and dynamics within the entrepreneurial network Hoang and Antoncic, ; 3 to understand how the entrepreneurs make sense of their own entrepreneurial network Bryman, ; and 4 to allow the involvement of researchers and informants in the process of data collection and analysis Dodd and Patra, The case study method has proven to be useful in the study of interfirm interactions and networks in the Asian business environment Pyatt, ; Redding, ; Trimarchi and Tamschke, ; Wong and Ellis, This number is much greater than that of Shanghai, which has only 1, 8.
Also, Beijing ranks highest with respect to the technology advancement environment, technological activity input, and direct technological activity output Ministry of Science and Technology of the People's Republic of China, Shenzhen was chosen as a supplemental field site to maximize the data variation; Shenzhen is the first special economic zone located in Guangdong Province. Shenzhen has a high total entrepreneurial activity TEA rate of Most of them stay there for work and start their businesses after graduation.
Shenzhen is considered to be the most capitalistic city in China, and most people rush there for business venturing. Both Beijing and Shenzhen attract thousands of people from other parts of Mainland China to establish their ventures.
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Regional culture variation in Mainland China was duly considered when soliciting respondents who came to the residing cities from different provinces. Suggestions for the optimal case number range from 2 Hedges, to 6 Perry, to 10 Eisenhardt, However, other researchers argue that representativeness Merriam, , flexibility Minichiello et al. A semistructured questionnaire was developed as an instrument to guide the interview. The goal of the interview was to reveal how entrepreneurs view their networks and how they act within and beyond the network. Thus, using a good network of personal contacts is one of the most effective methods to approach potential interviewees in Chinese society Huo and Glinow, Thus, all case respondents included in this study were selected using the researchers' personal network in Beijing and Shenzhen.
Data were collected on a cumulative basis until theoretical saturation was reached. The case profiles and characteristics are summarized in Table 1. Although most respondents could speak English Mandarin Chinese was used in the interviews because it was believed that the use of their native language might encourage them to express their ideas most freely.
Each interview audio was transcribed verbatim, including pauses and other nonverbal indications of what was occurring supplemented in the field notes. Transcripts were sent to the informants for confirmation within two weeks after the interviews were conducted. Following the advice of Miles and Huberman and Eisenhardt , the collected data were analyzed through data reduction and display and were gradually condensed into concepts. By focusing on the interplay among the network dimensions, the qualitative data were transformed through selection and summarizing of patterns.
Hence, concepts have emerged that demonstrated categories with unique properties. By assigning numerical values to the data categories, the data were then quantified. The different groups of data were further analyzed by linking them with relevant interview scripts Miles and Huberman, ; Yin, that provide critical links and insights.
The research results were further tested vigorously by credibility for truth value , transferability for fittingness and applicability , dependability for consistency , and confirmability for neutrality.
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Reviewing the transcripts suggests that the nature of relationships can be categorized as either collaboration based or transaction based. However, these concepts refer only to the relationship strength and, inevitably, neglect the nature of the relationship, for example, durable and repeated transactions. Its partners provide customer access, which is the critical resource. They have an open mind to pioneer the market, just as we do ….
The entrepreneur intends to continue the relationship and makes a great commitment to maintain it. The respondent believes that the ongoing relationship with another is important, so he or she exerts maximum efforts to maintain it. Indeed, in a complex market environment such as China you might need some system integrators or companies with special relations to help you in public relations.
However, according to our own principle, we cannot count on any agent to help us sell a certain amount of our products. We need to investigate the market and take on the project ourselves. However, in the process we find that it may be easier to take orders if we resort to someone's power. We may cooperate with these companies. Our cooperative relationships with them are very weak.
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The relationships with the system integrators or agents who help us sell products are very weak. Though the respondent CA07 described the relationship as being very weak, further probing revealed that he means their relationship is based on transaction. They do not want to rely on the agents or marketing partners, although they are currently cooperating with them. Now the entrepreneur is diversifying their business to original brand manufacturing OBM. He captures the market needs and contract product designs of several professional design houses. He then integrates the product solutions and subcontracts the production to some original equipment manufacturing OEM factories.
The entrepreneur places emphasis on cooperation and depends highly on the suppliers, manufacturers, and design houses in the value chain. We are now doing business order by order with Taiwan designers. It may cause the product styles to be very inconsistent. Nevertheless, if we want to develop a series of products I will definitely be constrained by the former design center, and thereby weaken my bargaining power. Then we become more and more dependent on the technology of one company. I cannot compare one product solution among different providers. My costs will increase.
We maintain more stable relations with factories. Although at the moment the situation remains that they are more dominant while we are more passive. But I have no other alternatives. This specific relationship, which focuses on the price and service quality, is durable and repetitive and also adds competitive edges in competition. Given the former durable and repetitive interactions, the relationship itself may impose constraints on the development of the firm's business.
To explore the form of governance underlying the exchange relationship, respondents were asked to describe how they dealt with those important relationships, specifically how the relationship began and was maintained over time. Reciprocity, trust, and interdependence are found to coordinate network exchange in the Chinese entrepreneurial context, which is consistent with most research findings. First, the research findings show that expected repetitive exchanges must meet both parties' economic needs; reciprocity, the required condition for mutual economic advantage, is the premise for building potential relationships.
The respondent commented on the relationship as follows:. The most essential factor in seeking a cooperative partner is mutual benefit. They definitely need to find one either with the same degree of service quality at a lower cost or one with better products or a higher quality at the expense of paying more … If you cannot reach this standard, although you may be his alumni or even his relative, you might not be able to cooperate with him.
Firm CA03 tends to maintain and cultivate a durable and steady cooperative relationship. The data, however, reveal that these conditions are necessary but not sufficient to determine network governance. Second, all respondents agree that interpersonal trust helps strengthen relationships and guarantee repetitive future exchanges. A respondent CA03 described that he and his business partner carry on their collaborative relationship based on the alumni identity, which in turn cultivates an interpersonal trust.
There is guanxi in it. We are alumni. Trust among alumni is advocated. Furthermore, because we graduated from the same university we act very steadfastly in a similar manner. He does not need to worry about the credit matter because there is an invisible control on alumni. So he will consider me more trustworthy. The transcript shows that shared identity helps to cultivate interpersonal trust.
It does not mean that two strangers cannot develop a relationship. The entrepreneur could interact with the potential partner, and a personal relationship might develop between them. Laddas ned direkt. Skickas inom vardagar specialorder. The degree to which the extensive business networks of ethnic Chinese in Asia succeed because of ethnic characteristics, or simply because of the sound application of good business practice, is a key question of great current concern to those interested in business, management and economic development in Asia.
This book brings together a range of leading experts who present original new research findings and important new thinking on this vital subject. Based on rich empirical research data and a multidisciplinary explanatory framework, this book assesses the role, characteristics and challenges of Chinese entrepreneurship and business networks in various East and Southeast Asian countries: the People's Republic of China, Vietnam, Malaysia, Singapore, Indonesia, and Australia.
With its strategic alliances in more than 70 countries and cooperative exchanges with government supported entrepreneur associations in provinces of China, DCYE is your gateway towards new business opportunities worldwide. DCYE can realize their ambition through the efforts and network of the honorary board. What can DCYE offer you? DCYE is an exclusive network organisation in the Netherlands for high profile professionals, entrepreneurs, SME enterprises, which are involved with business in China or which originated from China.