Guido Spooren, Week 46, Networks Assignment 3

Guido Spooren, Week 46, Networks Assignment 3

Hi readers, welcome to my third blog about Entrepreneurship and Networks!

In this blog I will be talking about “Embeddedness”, which was one of the topics in our lectures. For this week’s assignment, I’ve also read an article written by Uzzi (1997) and I have interviewed an entrepreneur, for which I used the article as a basis. Unfortunately, due to privacy reasons he is not on Facebook, so I was unable to walk him through his network using the Facebook app TouchGraph (which I talked about last week), which is why I cannot show you a picture of his network.

The entrepreneur I interviewed is a relative of mine, who started his own restaurant about 3 years ago. Prior to the interview, I explained to him some relevant terms (e.g. arm’s-length ties, (over)embeddedness, the paradox of embeddedness, etc.) in order to make my questions understandable to him. One of the most salient things he told me was that most people in his network were either good friends or other people he had could get along with fine and had no problem trusting. This tells me that those ties are mainly embedded ties and he only had but a few arm’s-length ties. He told me that actually all of the suppliers for his restaurant were either his friends or people recommended by his friends (references), with whom he built a good relationship as well, including a lot of trust. He told me that this was of much importance to him, since he thought he would be unable to make his restaurant really work if there wasn’t enough trust between him and the people who help making his restaurant work (e.g. his suppliers).

When I told him about the paradox of embeddedness and overembeddedness and therefore the chance of his restaurant even failing, he looked at me funny , since he never thought about it that way. However, he did see how it could jeopardize bigger businesses on the long term and that the paradox of embeddedness is true, but then he also told me that since his restaurant is not that big, he’s not concerned with the risk of overembeddedness.

I hope you’ve enjoyed reading my blog and hopefully you will read my next week’s blog as well! 🙂

Guido

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Entrepreneurship and Networks – Tom Willemse – Assignment 3

Entrepreneurship and Networks – Tom Willemse – Assignment 3

Dear readers,

This week I had to interview an entrepreneur about the relational and structural embeddedness. Where relational embeddedness is the personal relationships people have developed with each other through a history of interactions. The structural embeddedness is the structure of the overall network/configuration of ones network. I asked her about the role of embeddedness and also about the paradox of embeddedness. This paradox is in short: more embeddedness gives an entrepreneur several advantages while the result of too much embeddness is that an entrepreneur is too busy with the existing relations he or she is hampered.

I women I interviewed owns a lingerie shop and has plans to expand on the Internet with a web shop. While the shop is 15 years old already, she noticed that due the economic crisis people prefer to shop online and get things cheap instead of tailored advice. Having a business in this sector requires not that many connections although it is important to built a good relation with every customer. Having a good relationship with a wholesale company is important to get a discount. Faith or trust is the keyword in this case, the wholesale company wants to bind the entrepreneur for a longer time. With less connections its easier to oversee everything and focus on these relations.

At the other side, all the connections in a retailers association makes it hard to make things happen. Some retailers/entrepreneurs in the same street are forming groups, this makes it harder to discuss agenda items because all voices have to be heard. It’s not hard to understand that making a compromise is easier with only 5 people than 20 people.

Even an entrepreneur with a small business in the retail sector experiences the paradox of embeddedness, something I had no idea of at the start of the interview. It’s important to control all your relations and filter the unimportant ones out.

Tom Willemse
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