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2014

Roles of Networks and Social Capital in the Success of International Entrepreneurs: The network as a catalyst for trade between merchants

Roles of Networks and Social Capital in the Success of International Entrepreneurs: The network as a catalyst for trade between merchantsThe use of a network of social relationships is a response to the failure of the institution. We formulate the following proposition: “The choice for an entrepreneur to expand into foreign markets cannot succeed without relying on solidarity and support in the host and home country.” It is then important to have links through the family, friends, clubs, and associations… Emotional Intelligence

Granovetter distinguishes “strong ties” (family membership) of “weak ties” (woven with colleagues, friends, neighbors, membership of clubs, associations…) to illustrate this fact. For him, the weak links provide more information than strong ties. Aldrich and Zimmer explain that managers use their weak links to collect professional information (new business opportunities, potential markets…) and to attract customers.
The different theories presented above show that the international entrepreneur must create and maintain relationships with various links. These links can be considered “strategic” because they provide access to resources. Individual entrepreneurs have a preference for sources of business and personal information obtained through verbal exchanges. Indeed, the “face to face” relationship appears comforting for leaders because it provides them with personalized feedback. During periods of uncertainty and doubt they are happy to use these relationships, especially since they give them an important socio-psychological support based on trust.
Social capital can generate for the individual entrepreneur, positive effects, provided that these relationships and their configurations allow the contractor to achieve the objectives it has set. The social capital will be “closed” when the relationships between people are structured through ethnic origin, age, or social class similarities or “open” when they designate cross-links compared to different directions of social cleavages. Social capital is a collective asset quality end of the relational structure in which actors can enjoy.
In networks where people do not have hierarchical relationships, communication and exchanges are more fruitful. Links can then develop through formal structures such as professional, cultural, sports, humanitarian, political associations, etc. These formal structures act as a meeting place and socialization for their members, and are likely to serve their professional interests. Associations, bringing essentially together leaders of organizations, are cited as examples of catalysts exchange between decision makers. Through this channel, business leaders can meet with their peers and build relationships over time.
However, empirical studies show that an environment conducive to an informational exchange, innovation in social networks, is difficult to establish and maintain. Networks promote and facilitate the phenomena of the imitation of business practices and products. In doing so, they may lead to some consistency in behavior and they may be detrimental to the business. Moreover, the phenomenon of mistrust causing a lack of communication can occur in networks, especially in those who gather leaders in competition.
This literature review has shown how membership in a network can explain the success in business in an international context. Thus, as a result of Jones & al., we believe in the existence of a link between international management and international entrepreneurship.

The use of a network of social relationships is a response to the failure of the institution. We formulate the following proposition: “The choice for an entrepreneur to expand into foreign markets cannot succeed without relying on solidarity and support in the host and home country.” It is then important to have links through the family, friends, clubs, and associations… Emotional Intelligence Granovetter distinguishes “strong ties” (family membership) of “weak ties” (woven with colleagues, friends, neighbors, membership of clubs, associations…) to illustrate this fact. For him, the weak links provide more information than strong ties. Aldrich and Zimmer explain that managers use their weak links to collect professional information (new business opportunities, potential markets…) and to attract customers. The different

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Kevin J. Brandon

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