Challenges in the Era of Globalization - iaabd

Challenges in the Era of Globalization
Edited by Emmanuel Obuah
resources produced by human interaction that constitute society- and human action, termed as agency,
that shapes systems and human behavior. Inspired by this theoretical insight, the study attempts to
understand how local entrepreneurs’ facilitate their progress via their engagement with various entities
within their surrounding social structure. Beyond understanding the nature of local entrepreneurs’
embeddedness, this study also aims to ascertain the perceived value of various relationships within their
network. Social exchange theory (Homans, 1961) suggests that individuals will evaluate relationships in
terms of the perceived benefit versus the costs in comparison to the alternatives relationships. Though
seeking an explicatory framework for the duration and nature of exchange within entrepreneurs’
relationships is beyond the scope of this study, social exchange theory’s emphasis on benefit offers
insight in exploring how entrepreneurs perceive the value of various relationships in regards to their
venture’s progress.
Central to this understanding of an economic institution (the market) informed by the social interaction of
its actors is the conceptualization – and operationalization - of social capital, the intangible and tangible
productive resources which stem from the activity of relationships (Fukuyama, 2002). Social networks
represent one of the theoretical streams of the social capital literature (Bourdieu, 1986). Distinct from the
emphasis on social norms and values (Coleman, 1988) or associations of civility (Putnam, 1993), social
networks capture the structural quality of relationships and then the resources that are drawn from these
relationships. Furthermore, the literature has noted that different types of relationships exist within these
networks. Common references are bonds and bridges – referring to familial connections and relationships
with like actors and connections with actors from other types of groups, respectively (Gittell and Vidal,
1998). Relationships with institutions are considered linkages (Woolcock, 1998). Such distinctions help to
depict and formulate the idea of diversity in social networks and are used to organize and distinguish the
conceptual findings in this analysis that will position it with the broader literature.
The general conceptual framework offered by the empirical arm of the literature conveys that specific
entrepreneurial characteristics, and resulting activity, influence the structure of networks, and in turn,
relational structure shapes the variety of resources a member of the network partakes in. Empirical
studies of this regard are still few, and there is more room for such work to be expanded (Naude and
Havenga, 2005). Within the African entrepreneurial landscape, size (Barr, 1995; 2002); global exposure
(Mcdade & Spring, 2005); gender (Kuada, 2009; Rutashobya, Allan, & Nilsson, 2009); one’s ‘identity
landscape’ (Pingle, 2001); and ethnicity (Bruce, 2003) have been highlighted as entrepreneurial attributes
that lend to network structure variation. Environmental and institutional factors, such as the impact of
economic liberalization on informal business network structure (Meagher, 2006) are also taken into
consideration. On the other hand, empirical studies also capture the influence of network structure upon
entrepreneurs, particularly in terms of resources gained from networks – such as knowledge acquisition,
complex production, and operational capacities. Within the African context, Barr’s (1995, 2002) study
on Ghanaian manufacturing firms reveals that the prevailing network diversity provides innovative
resources for large firms, while security for small ones. Bakker, Oerlemans, & Pretorius (2008) unveil
similar findings for South African entrepreneurs in terms of innovation. Although the literature appears
to be growing, there is still much more to learn about the intricacies that constitute network structure and
value - particularly with small, emerging firms within African economies which are increasingly
connecting to a global economy (Naude & Havenga, 2005). Where social relations are shaped by much
more than economic incentives, more studies using inductive, exploratory methods are needed to capture
the nuances of the local phenomenon. In this regard, this study hopes to fill this gap in the literature.
Methodology
Subjects of the study were drawn from the Opportunity Exchange Database of the Business Place
Headquarters in Johannesburg. Thirty entrepreneurs were interviewed in total, of which the data from
twenty-four respondents was analyzed for this study. Exactly 50% of the twenty-four respondents were
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