| The entrepreneurial opportunity recognition process: Examining the role of self-perceived alertness and social networks |
| | Singh, Robert P. | U. of Illinois, Chicago | rsingh@blade-consulting.com | 847-910-3885 |
| | Hills, Gerald E. | U. of Illinois, Chicago | gehills@uic.edu | 312-996-9130 |
| | Lumpkin, G. T. | U. of Illinois, Chicago | tlumpkin@uic.edu | 312-996-8285 |
| | Hybels, Ralph C. | Leadership in Medicine, Inc. | leadership.in.med@connriver.net | 603-272-5001 |
| | Opportunity recognition is a key element of the new venture creation process. This study provides a conceptual distinction between
two aspects of the recognition process: new venture ideas and entrepreneurial opportunities. Then, hypotheses were developed
based on Kirzner's (1973, 1979) concept of "alertness," and Granovetter's (1973) "strength of weak ties" argument. First, we
examined the relationship of self-perceived alertness to the opportunity recognition process. Then, we hypothesized that an
entrepreneur's personal social network is critical to the process because it can expand a person's access to information and insights
about new venture ideas and opportunities. We studied the role of network size and the number of weak ties contained within an
entrepreneur's social network.
Data were collected from 256 information technology consulting entrepreneurs by mail survey. The entrepreneurs were provided with
a research model that illustrated and described the differences between new venture ideas and entrepreneurial opportunities. Results
of validity check questions showed that the entrepreneurs understood and agreed with the model, that is, they supported the concept
that ideas and opportunities are distinct constructs. Multivariate hierarchical regression analysis showed that size, number of weak
ties, and self-perceptions of alertness were significantly and positively related to the number of ideas and opportunities recognized.
Implications for future research and practice are discussed.
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| | Keywords: opportunity recognition; social networks; alertness |
| Personal Networking Activities and Venture Performance: An Assessment of the Moderating Effects of Firm Age Among Small High Technology Manufacturing Firms |
| | Crockett, Dilene R. | U. of Texas, Arlington | dilene@ionet.net | (817) 272-3166 |
| | McGee, Jeffrey E. | U. of Texas, Arlington | jmcgee@uta.edu | (817)-272-3868 |
| | New high technology ventures have long been characterized as "risky business" because they typically compete in dynamic, rapidly changing environments. Networks, involving informal relationships between the entrepreneur and external stakeholders are seen as useful mechanisms for thriving in the volatile, highly uncertain high technology arena. The existing literature uses a variety of theoretical perspective to address the networking activities of new ventures and the number of empirical studies examining the effectiveness of such activities is growing. We do not, however, fully understand how networking practices influence the performance of new high technology ventures. Our objective in conducting this research is to fill part of this void in the literature by assessing the performance implications of networking activities among 161 small high technology manufacturing firms. The results of multiple regression analysis indicate that frequent personal contact with members of the external social network was positively associated with performance. The results also indicate that this association is not moderated by the age of the venture. It seems frequent interations with external stakeholders may be useful for all businesses regardless of age. |
| | Keywords: Social Networking; High Technology; |
| The role of relational contracting in realizing the benefits of key customer relationships |
| | Yli-Renko, Helena | London Business School | hylirenko@lbs.ac.uk | 44 171 262 5050 |
| | Sapienza, Harry J. | U. of South Carolina | sapienza@darla.badm.sc.edu | 803-777-5972 |
| | Hay, Michael | London Business School | mhay@lbs.ac.uk | 44 171 2625050 |
| | Resource dependence, transaction cost, and strategic management literature emphasize the risks of being dependent on an exchange relationship. These perspectives argue that firms should protect themselves against opportunism through formal contracts. We challenged this view by examining the benefits which a new, technology-based firm (NTBF) can achieve through commitment to its single largest customer. The question we sought to answer was: Does contractual flexibility affect the potential benefits of NTBFs' key customer relationships?
We examined the extent to which the firms relied on relational rather than formal contractual mechanisms to govern the exchanges and tested the model with data from 204 NTBFs in the UK. We found that relational contracting moderates the relationship between dependence and outcomes. New product development, cost, and reputational advantages increased with increasing levels of economic exchange when NTBFs had informal relationships but not when formal contracts dominated. |
| | Keywords: customer relationships; contractual flexibility |