The Productiveness Of Networking And Networking Events

Published Date: 02 Nov 2017

1. Introduction:

In order to develop and grow their start-up companies successfully, entrepreneurs must get access to resources from external sources to transform their ideas into viable organizations (Aldrich and Martinez, 2001). Entrepreneurs usually get these resources through their networks (Dodd, et al., 2002). Lack of networking and business contacts can have negative implications for their capacity to grow and further develop their business (Neergaard, Shaw and Carter, 2005). However, the activity of networking itself does not ensure the benefits that networks can bring to entrepreneurs. Effective networking may be determined by benevolent and reciprocal behaviour between the members of the network. The most important condition for a successful network is the trust between its members (Sommer and Haug, 2008).

2. Literature Review:

It is acknowledged that networks and networking are considered by many people as vital in business life since the constitution and configuration of the economic, business and social life happen through markets and networks (Mele, 2010).

According to Forret & Dougherty (2001), networking represents the proactive efforts that individuals make in order to cultivate and maintain personal and professional relationships with others for the purpose of mutual benefit in their work or career. This definition, however, only approaches the sociological aspect of networking.

The industrial aspect of networking, on the other hand, relates to the relation and collaboration between companies, that, in order to increase their competitive advantages, share ideas and sometimes resources such as material goods and/or knowledge, experiences, information, production capacities, etc. (Sedmak, Planinc and Planinc, 2011). These relationships can take many forms like co-operations, ventures and others, depending on the levels of involvement.

Many authors have highlighted the positive sides of networking, such as Staniuliene (2011), who states that networks can support entrepreneurs in a direct or indirect way by giving them access to third parties that can provide the resources needed to establish and grow a business. This helps entrepreneurs to get emotional support, self-confidence and motivation to remain in the business (Hoang and Antoncic, 2003).

Networking is normally used by entrepreneurs to boost their start-ups in order to cost-effectively get resources and other resources that may not be available on markets such as reputation, contacts, etc. (Staniuliene, 2011). Among the other advantages of networking pointed out are that it helps the sharing of knowledge, so entrepreneurs can easily take timely and useful advice and ideas through their networks. It also assures financial resources, which increase the probability of a start-up company surviving and growing (Acquaah and Eshun, 2010).

Davies (2008) emphasized the importance of networking for entrepreneurs in the creation of new ventures. He said that effective ventures and partnerships can help in enhancing the development of technology to react to the external environment; this helps companies to gain a competitive advantage and raise profits. Also, by making new ventures, start-ups and small businesses can beneficiate with the economies of scale that can face new companies by just going into the market by themselves (Watson, 2011).

Moreover, according to Witt (2004) as cited by Harris et al. (2012) networking stimulates innovation and can help companies to build up credibility and reputation. Besides, through networks, entrepreneurs can make and increase their contacts, for potential customers or suppliers. So, it could be said that the activity of networking can be seen as an investment for entrepreneurs.

However, it is not possible for an entrepreneur to get all these benefits, advantages and resources from networks if there is not a reciprocal action. The entrepreneur has to offer something in exchange to his/her network partners as well. The result of a successful network should be equally effective for all its members (Sedmak, Planinc & Planinc, 2011).

Despite the many advantages that networking can bring to entrepreneurs and start-up companies, there are also some limitations found in other studies. Some authors have researched the difference of networking in females and males. Although the results have been diverse, Sharafizad (2011) and Tonge (2008) found that women face several barriers to networking, as the married ones with domestic responsibilities do not have the time for networking activities and the young ones are sometimes excluded. These barriers limit women and therefore women are at a disadvantage. However, Watson (2011) found in his research that women are not failing or staying behind in their networking activities, although his findings were limited to male and female start-up companies’ owners.

Another limitation is related to minorities in networking. According to Knouse and Webb (2001), minority groups’ networks are usually smaller than white men’s networks. Although minority groups’ networks are wider due to the diversity of people in them; they are smaller and weaker.

Although one of the advantages mentioned about networks and networking is the encouragement of innovation, it is also argued that networking can discourage innovation due to the anti-competitive behaviour that networks incite (Advanced Institute of Management Research, 2004), since most of the networks’ purpose is collaboration and cooperation. Among that, there are also other studies that found no relation of networking with innovation at all (Love and Roper, 2001) and others that recognize that it facilitates innovation but does not necessarily end successfully (Harris, Cole and Dickson, 2000).

In the existing literature there are three main network theoretical models. One of those models, the strength of ties model, was introduced by Granovetter (1973), where he categorized the networking ties in strong and weak ties. The strength is related to the frequency, emotional intensity and intimacy of a relationship, so strong ties are those with high interaction and trust (usually seen by people as close friends); whereas weak ties are low intensity interaction relationships. Entrepreneurs with many weak ties and few strong ties have more access to information and more opportunities to spread information about their business ideas and projects.

The main criticism of this model is that for entrepreneurs who are people that face many kinds of limitations, such as lack of finance, lack of time, lack of expertise and lack of good market information (Gilmore, Carson and Rocks, 2006), weak ties are not always enough, because some useful information might be sensitive as well, and people might only share it with strong ties. In this case, entrepreneurs also need to build strong ties in order to get access to more detailed information (Krackhardt, 1992). Moreover, entrepreneurs usually find more important support coming from strong ties when they are to create a new business or starting a new venture (Staniuliene, 2011). However, researchers emphasise that both strong and weak ties play an instrumental role in an entrepreneur’s networking life (Drnovsek, Zorn and Martincic, 2008).

The second theoretical model is the notion of structural holes developed by Burt (1992), which analyses the connection channels of a network and also the lack of the connections between a network. Those gaps in the connections are what he calls ‘structural holes’. This theory focuses more on the open networks rather than the closed networks where there are no structural holes. The assumption is that as many structural holes an entrepreneur or start-up owner has, the more probability of having timely access to unique knowledge and information.

The third theory is the social resource theory by Lin et al (1981). This theory does not focus on the ties or structural holes, but it rather focuses on the nature of the resources that a network and all its members have.

There is also another theory or concept regarding networking, which is mainly to understand the Chinese form of networking in business. The concept of Guanxi of China’s way of networking is entirely about the close brotherhood network. Guanxi was a very successful businessman from China that recognized it was through his networks that he built his success. He stated that he developed his networks with time in terms to build a partnership that would later continue as a brother or family relationship. These relationships are based on trust, so there will be many favours exchanged as a result (Gibb, 2006).

However, this concept is only useful in the Chinese culture, and not in the western society (Gibb, 2006). Furthermore, Huang and Rice (2011) claimed there are some strong criticisms about this concept, like the lack of ethics of these networks and the fact that it also can consent bad networking behaviour such as bribery and corruption. However, they also acknowledge that this type of bad behaviour is caused by the abuse of some members and that this can happen in any type of network.

Regarding ethics, Domenec Melec (2009) explained the bad and good behaviour that members of networks have. Networking behaviours with conducts such as acting with bad faith or abuse of trust, opportunism, abuse of power, favouritism, bribery and cooperating in the wrongdoing of other actors of the network are bad networking behaviours. The good behaviour is the opposite of these conducts and includes dealing with people with respect and benevolence. The latter contributes to maintain trust within a network, which is essential since successful entrepreneurs are expected to maintain existing network ties which they trust, rather than replacing them with new ones or creating new ones (Staniuliene, 2011).

On the other hand, it is understandable that start-ups are always trying to find resources in order to compete or gain a competitive advantage to survive in the environment. According to Goldman (2008), opportunities are the base of start-up companies, and these opportunities should be attractive ideas that have an economical purpose in time and durability.

In addition, the numbers of start-up companies in the UK increased in 2012 by 10% compared to the previous year, and there were already 44.094 new registered start-up companies in UK by February this year (Jones, 2013). However, according to Stout (2012), to begin with a start-up could be dangerous since 20% of the new businesses do not succeed in their first year.

To conclude, although the subject of networking is not new among academics and researchers and there is a considerable amount of information about the activity of networking in general, there is no information or studies about the productiveness of networking in the e-commerce women’s fashion industry, especially for entrepreneurs and start-up companies. Furthermore, it is essential to mention that this study is only and purely about networking and the activities of networking events that happen physically, offline, face to face; not the type of online social networks that already have studies in the area.

3. Objectives:

1. To investigate the positive and negative effects that the activity of networking and networking events can bring to start-up e-commerce companies and entrepreneurs in the fashion industry.

2. To establish the most effective type of networking behavior at networking events in the fashion industry.

3. To investigate the extent of how entrepreneurs and start-up companies can benefit in the long and short term through networks and networking events.

4. Methodology

4.1 Philosophical Worldview and Research Approach

The philosophical worldview proposed for this study is pragmatism. The pragmatism paradigm focuses more on the research question and on the research problem itself. It concentrates on how to assimilate the research questions and how to solve them using all the possible resources and methods (Creswell, 2009). This is the reason why it is applied for investigations using mixed method approaches. While the other paradigms address only a few aspects, such as observable empirical data (i.e. post-positivist paradigm) and social and subjective understandings (i.e. constructivism); pragmatism addresses both of them and is more practical and reality oriented (Creswell, 2009).

Therefore, the research approach for this proposal is inductive. It is not going to test the hypothesis, however it is going to explore the topic of the productiveness of networking for entrepreneurs and start-up e-commerce companies in the women’s fashion industry, therefore there are not yet any expectations or hypothesis of the results.

4.2 Research Design

The research proposed is an exploratory research, since the proposal comes from a subject that needs to be explored more in depth. Exploratory research is useful in order to get more information and data in areas where there is little research or no research at all. Furthermore, as its own word says, it explores data, reasons, issues, patterns, etc. (Malhotra et al, 2012).

The activity of networking and networks and its productiveness have been already researched as shown in the literature review; however, not in areas such as e-commerce in the fashion industry, specifically for early stage companies and entrepreneurs.

Moreover, the research design proposed to be undertaken is a mix of qualitative and quantitative methods in order to get a more detailed and accurate exploration.

4.3 Strategies

The strategies proposed to be undertaken are surveys and a multiple case study. The surveys are a good approach for exploratory researches (Saunders et al, 2009). Furthermore, they numerically describe orientations, impressions, attitudes or opinions of a representative sample (Babbie, 1990 cited by Creswell, 2009).

In order to reduce costs and have a faster delivery to respondents, the surveys will be delivered via online to respondents’ emails, and they will be hosted by the surveymonkey.com website. Each survey will contain 20 questions.

A multiple case study will also be undertaken. Individual in-depth interviews will be the form of data collection. The five most representative companies of the sample are going to be the chosen companies for the interviews. The meetings will be arranged by phone calls, although previous mails will be sent requesting interviews. Each interview will have 10 questions and it will be for 30 minutes maximum. This form gives a better understanding of attitudes and reasons behind results and behaviours (Wilson, 2006). In order to make the conversations and interviews progress easily, the interviews will be tape recorded, and there will be no need for video recording.

4.4 Research Methods

The research method to be taken is the mixed method approach, since the forms of data collection proposed are quantitative and qualitative. Taking the quantitative technique first, then following it with the qualitative technique as explained above. Both data will be analysed separately.

The reason to take this approach is mainly for complementarity; in case the research has any gaps, the mix of the methods are expected to fill them (Wilson, 2006).

4.5 Time Horizons

This research is a cross-sectional study since it is going to study a particular subject in a particular time (Saunders et al, 2009), in this case, networking productiveness for start-ups and entrepreneurs in the e-commerce women’s fashion sector in the UK.

4.6 Sampling

Since there is not yet broad information about the numbers of start-ups and entrepreneurs in the e-commerce women’s fashion sector in the UK, the type of sampling method is the non-probability sampling. The researcher is going to deliberately select the most representative sample that is considered for this study (Wilson, 2006), therefore it will be a purposive sampling. The researcher in this study is going to analyse 25 start-up companies in the e-commerce women’s fashion industry.

4.7 Ethics

It is acknowledged for the author of the research that there are some ethical issues to take into account in order to get the research done. The codes of ethics will be followed at every stage of the research.

Prior to the investigation, the researcher will make sure it is understandable for the participants that this study will be beneficial for them as well (Punch, 2005 cited by Creswell, 2009). This study will give the entrepreneurs and start-up companies in the ecommerce women’s fashion industry a critical idea about how beneficial the activity of networking in their sector is; furthermore the results will give the participants an insight into how to improve their performance in these events. In sum, the results of this research will give the participants an overall view of the productiveness of these activities in the sector.

Preceding the data collection, the participants will get an email where the intentions of making a research in the sector will be explained. There will not be any pressure applied to the participants in order to get permission, and it will also inform them of their right to decline participation (Saunders et al, 2009). In order to get consent from the participants, they email will also clarify the fact that their information will remain private and confidential and the study will be made only for academic purposes (Saunders et al, 2009). The researcher must make sure that participants have entirely understood the purposes of the study at all times (Creswell, 2009).

A proper use of language will be used in every type of communication with participants (Saunders et al, 2009).

Furthermore, the researcher is committed to analyse and interpret the data in an objective way (Saunders et al, 2009). Moreover, the researcher also bonds to not commit any unethical practice, such as falsifying or creating findings (Creswell, 2009).