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Entrepreneurial Process and Social Networks

Entrepreneurial Process and Social Networks

A Dynamic Perspective

Edited by Alain Fayolle, Sarah L. Jack, Wadid Lamine and Didier Chabaud

Entrepreneurship is undoubtedly a social process and creating a firm requires both the mobilization of social networks and the use of social capital. This book addresses the gap that exists between the need to take these factors into consideration and the understanding of how network relationships are developed and transformed across the venturing process.

Chapter 12: Entrepreneurial mingling secrets: investigating the performance impact of network structure for control-based entrepreneurship using agent-based simulation

Willem Jansen, René Mauer and Malte Brettel

Subjects: business and management, entrepreneurship, social entrepreneurship


‘Knowing many people is good for business; keeping them apart is even better’ captures the essence of research regarding the position and shape of entrepreneurial social networks. Current research focuses on high-level relationships, ignoring underlying processes. Consequently, its applicability to novel approaches such as control-based entrepreneurship, a decision logic designed for highly uncertain environments, is limited. Fostering co-creation and strong involvement of partners, control-based entrepreneurship is conceptually at odds with current networking strategies emphasizing transactional relationships, arbitrage and brokering between contacts. In this study, we therefore re-evaluate current theories regarding network position and shape for control-based entrepreneurship. We use a computer simulation of effectuation, a prototype of control-based entrepreneurship. We reveal the starkly different mechanics that lead to a similarly positive impact of network position yet completely contrasting results for network shape. Proposing tertius iungens as an alternative theoretical foundation, we demonstrate how control-based entrepreneurship reorganizes social networks towards a dense web with few structural holes, high personal centrality and highly constrained stakeholders.

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