Last week in the lectures we discussed about the concept of embeddedness in the light of Uzzi´s (1997) conpetual model. For this blog post I interviewed an entrepreneur and asked which components of embeddedness and overembeddedness play a role in his business, what role these compononets play when it comes to attaining his desired professional outcomes and to which extend the entrepreneur perceives embeddedness as paradoxical.
Embedding can be seen as mechanism whereby an entrepreneur becomes part of the local structure. I asked the entrepreneur to describe the structure of his overall network. As I thought (because he is my acquaintance) due to his two businesses, his network is very large and includes both weak and strong ties. In IT business he has his collegues to whom he trusts and with whom he works daily, and his other career as a photographer gives him an opportunity to meet continuously new people. Most of those surely weak ties but can be reactivated later on, if needed. Since he has been running his IT business 8 years and photographed more than 10 years, so he had have time to create a large network.
When asking about relational embeddedness, the quality of his dyadic network relationships, he considered trustworthiness as an important factor in network. As a busy man, he considered embedded ties good for saving time. He thought that embedded ties are especially important because negotiations go with routine. That is also something that was mentioned in Uzzi´s (1997) article as Joint Problem-solving arrangements. Embededdedness regulates expectations and behaviors of exchange partners and one of the findings was that it helps coordinate functions and work out problems “on the fly”. Arrangements consist of routines of negotiation and flexibility.
According to Uzzi (1997), if the firm is too embedded, adaptation became more difficult. Uzzi (1997) states that if the positive effects rise up to a threshold, embeddedness can derail economic performance by making firms vulnerable to exogenous shocks or insulating them from information that exists beyond their network. When asking from the entrepreneur I interviewed, what does he think about the paradox of embeddedness, he said that it is always important to think and look outside of the box and find new opportunities.