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The influence of social aspects on new venture creation

A qualitative study on the role of entrepreneurs’ and entrepreneuses’ social capital and social competence in the start-up phase

Written by Sofie Blad

Paper category

Master Thesis


Business Administration>Entrepreneurship




Master Thesis: Entrepreneurship process Generally speaking, the entrepreneurial process includes three activities; discovery, evaluation and development, but there is no general consensus on the precise stages or stages involved in the process. The entrepreneurial process proposed by Shane (2003) is divided into seven stages, as shown in Figure 3.1 below. He explained these stages and their sequence as follows: "Before identifying opportunities, the source of opportunities must guide their existence. In order to evaluate and decide to use Opportunities, these opportunities must be identified. For the resources to be assembled, a decision must be made to use the opportunities. For the resources to be recombined into a new form (organizational process), the resources must have been combined. In order to organize the entrepreneur’s exploitation methods into one For new entities, entrepreneurs must have an implicit or explicit strategy to take advantage of opportunities. In order to achieve performance, the efforts to take advantage of opportunities must be organized into a new entity.” (Shane 2003:12) This description of the entrepreneurial process shows , Is officially a new enterprise established in the sixth stage, the organizational process. The statement of Shane (2003) above shows that entrepreneurs will not create business opportunities, they will only discover business opportunities, that is, opportunities exist and are discovered by entrepreneurs. This means that the actions or decisions of entrepreneurs or entrepreneurs will not affect the existence of business opportunities. Therefore, this stage should not be regarded as part of the start-up stage of a new enterprise. Therefore, the start-up phase includes the second to sixth phases, namely discovery of opportunities, development decisions and resource acquisition, and applied entrepreneurial strategies, as shown in Figure 3.1. The purpose of this research is to test the perceived effect of social capital and social capabilities in the entrepreneurial stage. These phenomena affect the network structure of entrepreneurs and entrepreneurs, their social interactions, and how they use his or her network and relationships. According to Shane (2003:252), these are the factors that influence the second, third, and fourth stages of the entrepreneurial process. Therefore, these stages of the process are the main focus of this research, so this research will only focus on those stages, as shown by the gray boxes in Figure 3.1; opportunity discovery, development decisions, and resource acquisition. 3.2. Social capital The central idea of ​​social capital is that a person’s relationship, regardless of its nature, can provide the person with resources that may be valuable when becoming or becoming an entrepreneur (Nahapiet and Ghoshal 1998). Anderson et al. (2007) pointed out that social capital “produces in social interaction, but exists in the network” (p. 264). This statement captures one of the main characteristics of social capital, that is, it can only be accessed if it directly or indirectly becomes part of the particular network. Most research on social capital sees it as something that promotes entrepreneurship, that is, those with a large amount of social capital are considered to be more successful in becoming entrepreneurs than those with smaller social capital (e.g. Casson and Guista 2007; Davidsson and Honig 2003; Nahapiet and Goshal 1998). Therefore, social capital supports entrepreneurs to obtain different resources, such as entrepreneurship, knowledge, advice, and reputation. In other words, social capital is seen as an intermediary or link between the network and the creation of new enterprises. However, few studies have studied how social capital and personal factors are related, that is, how personal factors affect the creation of social capital. In this research, social capital is regarded as a phenomenon that exists in all social relationships a person has, regardless of whether the relationship is direct or indirect. The following definition covers this view and is used to define social capital in this research. Social capital is: Scholars generally believe that social capital is created in social relations, but there are still disagreements over which aspects of the relationship create or promote social capital. (Adler and Kwon 2002) In the past ten years, the identification of these dimensions has received a lot of attention, and the two most recognized operationalizations distinguish them: 1) Bridging social capital and combining social capital (Gittell and Vidal 1998:14- 15) and 2) The structure, cognition and relational dimensions of social capital (Nahapiet and Ghoshal 1998). Bridging social capital focuses on the resources embedded in the relationships that constitute a personal social network, such as information or knowledge. These resources are like bridging mechanisms between participants. On the other hand, combined social capital refers to the resources that exist in a group or organization, such as trust or obligation, which forms a bonding glue between actors. Read Less