I still owed you my first blog for the course Entrepreneurship and Networks. This blog is taking organizational outcomes that entrepreneurs realize with the help of their social networks into account. We all know that it is important to have networks who we have a social understanding with, however, how is it that entrepreneurs can exactly benefit from this – and in what way to they benefit?
Scholars have made some systematic approaches into defining what social capital is, and how this can help entrepreneurs in terms of organizational benefits. First, let us define what social capital actually is: “The collection of resources owned by the members of an individual’s personal social network, which may become available to the individual as a result of the history of these relationships” (Van der Gaag & Snijder, 2004). It is in this definition that the real value of social networks and social capital can be found. Since social capital has been defined as a resource, and it can be attained just by having a history of relationships with other people – one might say that social capital e.g. social networks are extremely important pillars on which entrepreneurs should rely.
But what are these resources, and how are they shaped? Well, according to Lin (1999) one extremely important resource that entrepreneurs attain with their social capital is information. The flow of information that entrepreneurs share and attain with and from their social network helps them in many organizational aspects. Another outcome can be that entrepreneurs feel moral support and trust with having a social network.
If I take one of my good friends into account who just recently opened a webshop in food supplements and nutritional vitamins, it is quite easy to notice how these theories apply themselves in practice. This friend has always worked out, followed healthy diets and has always been very actively busy with food and sports. As a result, he knows a lot of other people having the same passion as he has and some of these people were gym owners. With their support, information and networks he has been able to open his webshop. But simply knowing gym owners was not enough, they came in handy for promotional purposes. His other networks – people who had a lot of knowledge about supplements – shared with him their knowledge and supplied him with a lot of information needed to attain a consistent and qualitative line for his webshop. Without all these people, he would have lacked the required knowledge and podia to promote his webshop.
I hope you enjoyed reading this week’s blog!