University of Bielefeld

Institute for Interdisciplinary Researchon Conflict and Violence

Has networking an effect on subjective and/or objective success of entrepreneurs?

Andreas Grau1, Dominika Dej2, Cornelia Hering3 & Ute Stephan3

1 Institute for Interdisciplinary Research on Conflict and Violence, University of Bielefeld2 Institute of Industrial, Organizational, and Social Psychology, Dresden University of Technology3 Work and Organizational Psychology, Phillips-University Marburg

EAWOP 2009

g y gy, p y g

Networkingg

• Networking includes behaviors aimed at building and maintaining informal relationships, that possess the (potential) benefit to ease work related actions by p p (p ) yvoluntarily granting access to resources and by jointly maximizing advantages of the individuals involved (Wolff & Moser, 2006).

• Building, maintaining, and using relationships (Forret & Dougherty, 2001; Michael & Yukl, 1990)

• Relationships– Informal (vs. formal; Michael & Yukl, 1990)– Cooperative (vs. competitive, Baker, 1994)– Inside and outside the organisation – Voluntary exchange of favours (Cohen & Bradford, 1989)Voluntary exchange of favours (Cohen & Bradford, 1989)

• We focus in this study on the “maintaining contacts” component and on networking outside the organizationnetworking outside the organization.

Social competencep

• Specific competences that facilitate effective interaction with others (Baron & Markman 2000)others (Baron & Markman, 2000).

• Social competences are essential to build contacts to foreigners and maintain these contacts and arrange them in a positive way.

Research questionsq

Is networking positively related with subjective and objective business success?

Is networking in a regression model positively related with objective business success?

Is networking in a regression model positively related with actual subjective business success?

Is networking in a regression model positively related withIs networking in a regression model positively related with subjective expected business success in the next 3 years?

Is social competence related to networking and if this is the case which are the effects of it in the three regression models?

Measures

Questionnaire / Self report

Networking (Subskala Maintaining; Forret & Dougherty 2001)Networking (Subskala Maintaining; Forret & Dougherty, 2001)

Social competence (BIP; Hossiep & Paschen, 2003)

Social competence / Rated by InterviewerSocial competence / Rated by Interviewer

Self efficacy (Schwarzer & Jerusalem, 1995)

Personal initiative (Frese et al 1996)Personal initiative (Frese et al., 1996)

Business success (subjective appraisal)Actual successExpected growth

Net income

Results I

1 2 3 4 5 61. Networking (.71)

2. Social Competence .49** (.83)

3 S lf ffi 23* 39** ( 73)3. Self efficacy .23* .39** (.73)

4. Personal initiative .24* .33** .53** (.74)

5 Growth next 3 years 32** 36** 11 16 ( 77)5. Growth next 3 years .32 .36 .11 .16 (.77)

6. Actual success (subj.) .00 .03 .09 .22* .28** (.71)

7. Net income .39** .20 .05 .08 .20 .25*

Notes: Correlation coefficients ; diagonal: Cronbach’s alpha; **p < .01, *p < .05.

Results II (DV: Net income)( )

Modell 1 Modell 2 Modell 3 1 f b i1. years of business -,101 -,130 -,1242. Sex ,026 ,021 -,008 3 Age 097 089 0493. Age ,097 ,089 ,0494. Education -,158 -,139 -,131 5. Personal initiative 194 0965. Personal initiative ,194 ,0966. Self efficacy -,181 -,190 7. Social competence ,131p ,1318. Networking ,261* 9. Social comp. (rated-int) ,041

R2 ,04 ,07 ,18 ∆R2 ,04 ,03 ,11**

Notes: Standardized beta-coefficients; **p < .01, *p < .05.

Results III (DV: actual subj. success)( j )

Modell 1 Modell 2 Modell 3 1 f b i1. years of business -,130 -,169 -,1712. Sex -,080 -,128 -,131 3 Age 056 068 0883. Age ,056 ,068 ,0884. Education ,005 ,014 ,005 5. Personal initiative 337** 344**,337 ,3446. Self efficacy -,162 -,168 7. Social competence ,0628. Networking -,090 9. Social comp. (rated-int) -,040

R2 ,02 ,10 ,11 ∆R2 ,02 ,08* ,01

N St d di d b t ffi i t ** < 01 * < 05Notes: Standardized beta-coefficients; **p < .01, *p < .05.

Results IV (DV: growth next 3 years)( g y )

Modell 1 Modell 2 Modell 3 1 f b i1. years of business -,380** -,404** -,418**2. Sex -,040 -,067 -,071 3 Age 029 005 0033. Age -,029 -,005 -,0034. Education ,037 ,043 ,023 5. Personal initiative ,207+ ,105,207 ,1056. Self efficacy -,002 -,048 7. Social competence ,259* 8. Networking ,156 9. Social comp. (rated-int) ,011

2R2 ,16 ,20 ,31 ∆R2 ,16** ,04 ,11**

Notes: Standardized beta coefficients; **p < 01 *p < 05 +p < 10Notes: Standardized beta-coefficients; p < .01, p < .05, p <.10.

Summaryy• Networking should be accounted for in entrepreneurship research,

especially because of its positive effects on objective business ( t i )success (e.g. net income)

• No significant effects of Networking in regression-models on bj ti ( th t d t l )subjective success (e.g. growth expectency and actual success)

• Furthermore we found positive mid-size correlations between t ki d i l t d th tnetworking and social competence and growth expectancy

• Social competence has in the regression models only an effect on t d b iexpected business success

• Positive low though significant relations between networking and self efficac and personal initiati eself efficacy and personal initiative

Discussion

• Especially for the relationship between networking and social competence it is not clear whether networking behavior enhances p gsocial competence or if social competence leads to more (efficient) networking behavior

• For disentangling causal effects of variables (e.g. social competence) on networking behavior and the causal effects of networking behavior on outcome variables (e.g. business success) etwo g be av o o outco e va ab es (e.g. bus ess success)longitudinal studies are warranted

• Is social competence a Moderator of the relationship between• Is social competence a Moderator of the relationship between networking and objective business success?

l i f b i• Alternative measures for business success

Thank you for your i !attention!

andreas.grau@uni-bielefeld.de