Topic 1: Networking
The entrepreneur is just an actor in the entrepreneurship process. Networking in entrepreneurship represents one of the most fundamental aspects of entrepreneurship. Networking is defined as the total number of people connected by a certain type of relations and is built by finding the ties among all the people in the population, regardless of how it is organised into role sets and action sets (Subrahmanyam, 2019). Networking and entrepreneurial activity are interrelated and reinforce each other: having a strong network fosters better entrepreneurial activity while engaging in a new network, while having an efficient entrepreneurial activity strengthens the network, as well. Networks can be classified into three aspects: type, orientation, and strength.
Type. Networking could be either business-related or personal-related. Business networks are those that involve professional relations and are outcome-based (the network is maintained as long as it produces economic benefits). Personal-related networks are generated by mutual sympathy, based on shared values, often involving personal emotions and moved by irrational inputs (Johannisson, 2009) This type of network is maintained based on the state of the personal relation, often regardless of the economic activity. A network could be both business and personal at the same time.
Orientation: Networks can follow a vertical orientation – those involving suppliers, customers, public entities etc. – or horizontal –with other entrepreneurs (Alam & Hossan, 2012). They could be either personal-related or business-related. For example, loyal customers initiate a relationship with the entrepreneur merely based on the outcome of it (business-related), but if it continues in time, personal traits may affect that relationship, as well. The more personal elements are added to that business relationship, the more likely it is to prevail if the entrepreneurial activity fails.
Strength: Even if two networking relations share type and orientation, they may be perceived differently by the entrepreneur. This is because each relation has its strenght, referred to as the depth of ties between persons (Sybrahmanyam, 2019).
Network characteristics.
Source: EH Consortium, created on Canva
Networking strength scheme.
Source: EH Consortium, created on Canva
Networking, at the same time, is strongly influenced by culture. According to Klyver & Foley (2012), networking does not function in the same way in every culture; there is no universality regarding how entrepreneurs engage in relations. Seven areas affect networking regardless of the culture, but all of them do so very differently, therefore, it is not possible to identify a common thread in entrepreneurial networking The areas are the following:
Drivers for activation of relationship: Depending on the culture, the factor to stimulate relationships between entrepreneurs and the environment differs. Some cultures would do it through rational choices, some others due to familiar connections for example.
View of the network: Most cultures see the network as an opportunity and a positive source. However, it could also be seen as a need rather than a choice.
Role of the family: Family tends to play a strong role in networking opportunities, and some cultures may see it as the natural way of connection. However, for some entrepreneurs, family may not be very relevant when engaging in a new relation.
Dynamism: Dynamic refers to the degree to which the network is subject to changes. Some cultures may accept a more flexible concept of network, while others tend to perceive it as something that must last in time.
Diversity: According to some authors, diversity in networking is necessary because it increases information variety, which leads to better profit opportunities (Subramanyhan, 2019), however, there are some cultures in which, due to traditional reminiscences, belonging to a certain ethnic, gender, and age etc. group is considered to be the best for establishing networks (Klyver & Foley, 2012).
Business relations: Separating business from family may be perceived as something more or less positive, depending on the culture. It is strongly related to the role that family plays in economic activity. The stronger that role is, the more connected it is with business, and therefore the less positively it is viewed if an entrepreneur actively splits the two spheres.
Relationship between social and business spheres: This is similar to the previous point, in the way that separating business from social relations may be perceived as something positive or negative, depending on the culture. In some cases, business networking is closely related to fostering or developing a social network as well, involving several non-business actors.
Failure perception: As pointed out before, failure may be perceived differently, depending on the culture (Yannes et.al, 2015). Having failed in previous entrepreneurial activities may represent a constrained for some cultures, while others may grant some facilities for the failed entrepreneurs, being aware of its positive outcomes (Olaison & Sorensen, 2014).