Entrepreneurial networking capability and performance of startups in Isfahan city

Document Type : Sterategic Management

Authors

1 Department of Business Management. Qeshm branch. Islamic Azad University. Qeshm.Iran

2 Professor, Department of Management, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, Iran

3 Professor, Department of Industrial Management, Faculty of Management and Accounting, Shahid Beheshti University, Tehran, Iran

Abstract

Despite the key role of start-ups in economic development and job creation, one of the biggest problems of these start-up businesses is their legendary failure rate. One of the main reasons for the failure of these businesses is marketing limitations in the form of lack of financial resources, time, market knowledge and marketing expertise. Also, these companies lack strategic plans and their management is based on personal experience and business intuition. Entrepreneurial networking is one of the solutions that have been proposed to solve these limitations, because networking is considered to be the factor of restructuring the world trade architecture. The current research was conducted with the aim of explaining the role of entrepreneurial networking ability on the marketing performance of start-ups, taking into account the role of entrepreneurial orientation and market knowledge. The statistical population was 550 start-ups and fledgling businesses in Isfahan. The sample size was calculated using the Krejci and Morgan table of 225 companies that were selected by simple random sampling. A standard questionnaire was used to collect research data. Validity of the questionnaire was confirmed by experts and reliability using Cronbach's alpha coefficient. Data analysis was done using structural equation modeling with partial least squares approach and SmartPLS software to test fit and relationships between variables. According to the research results, entrepreneurial networking ability plays an important role in improving the marketing performance of start-up businesses; Therefore, managers who want to increase their marketing performance must identify and form strategic alliances faster than competitors.

Keywords

Main Subjects

References

 Akerman,N. (2014). Knowledge-acquisition strategies and the effects on market knowledge – profiling the internationalizing firm. European Management Journal.33(2),79-88.
Andadari, R. K. (2008). Local clusters in global value chains (Vol. 421): Rozenberg Publishers.
Aulakh, P., Kotabe, M., & Sahay, S. (1996). Trust and performance in cross-border marketing partnerships. Journal of International Business Studies, 27(5), 1005–1032.
Boso, N., Story, V., and Cadogan, J. (2013). Entrepreneurial orientation, market orientation, network ties, and performance: Study of entrepreneurial firms in a developing economy. Business Venturing, 28, 708-727.
Brazinskaite, J., and Durand, M. (2014). Entrepreneurial orientation in marketing: An empirical study of small businesses in the Swedish fashion industry. M.A Thesis, School of Economics, Lund University,Sweden.
Chetty, S., & Holm, D. B. (2000). Internationalisation of small to medium-sized manufacturing firms: a network approach. International business review, 9(1), 77-93.
Chen, S. H. (2002). Global production networks and information technology: the case of Taiwan. Industry and Innovation, 9(3), 249-265.
Coviello, N., & Munro, H. (1997). Network relationships and the internationalisation process of small software firms. International business review, 6(4), 361-386.
Covin, J.G. and G.T. Lumpkin. 2011. Entrepreneurial orientation theory and research: reflections on a needed construct. Entrepreneurship, Theory & Practice, 35(5): 855-872.
Das, T. K., & Teng, B.-S. (1998). Between trust and control: Developing confidence in partner cooperation in alliances. Academy of Management Review, 23(3), 491–512.
De Maeseneire, W., & Claeys, T. (2012). SMEs, foreign direct investment and financial constraints: The case of Belgium. International Business Review, 21(3), 408-424.
Dong,B.,Xu,H., Luo,J., Nicol,C.D,. Liu,W.(2020). Many roads lead to Rome: How entrepreneurial orientation and trust boost the positive network range and entrepreneurial performance relationship. Journal of Industrial Marketing Management,.173–185.
Eriksson, K., Johanson, J., Majkgard, A., & Sharma, D. D. (1997). Experiential knowledge and cost in the internationalization process. Journal of international business studies, 337-360.
Felzensztein, C. and Gimmon, E. (2009). Social Networks and Marketing Cooperation in Entrepreneurial Clusters: An International Comparative Study, Journal of International Entrepreneurship, 7(4), 281- 291.
Felzensztein, C., & Gimmon, E. (2018). Industrial Clusters and Social Networking for enhancing inter-firm cooperation: The case of natural resources-based industries in Chile. Journal of business market management, 2(4), 187-202.
Franco, M., de Fátima Santos, M., Ramalho, I. and Nunes, C. (2014). An Exploratory Study of Entrepreneurial Marketing in SMEs: The Role of the Founder-Entrepreneur, Journal of Small Business and Enterprise Development, 21(2), 265- 283.
Gilmore, A., Carson, D., & Rocks, S. (2006). Networking in SMEs: Evaluating its contribution to marketing activity. International Business Review, 15(3), 278-293.
Hartmann, N., Wieland, H., & Vargo, S. (2018). Converging on a new theoretical foundation for selling. Journal of Marketing, 82(2), 1-18.
Ho, H. D., & Lu, R. (2015). Performance implications of marketing exploitation and exploration: Moderating role of supplier collaboration. Journal of Business Research, 68(5), 1026-1034.
Hult, G., Tomas, M., Snow, C., and Kandemir, D. (2003). The role of entrepreneurship in building cultural competitiveness in different organizational types. Journal of Management, 29 (3), 401-426.
Hughes, M. and Morgan, R. E. (2008), “Deconstructing the relationship between entrepreneurial orientation and business performance at the embryonic stage of firm growth,” Industrial Marketing Management, Vol. 36 (5), 651-661.
Jin, B., & Jung, S. (2016). Toward a deeper understanding of the roles of personal and business networks and market knowledge in SMEs’ international performance. Journal of Small Business and Enterprise Development, 23(3), 812-830.
Johanson, J., & Vahlne, J. E. (1977). The internationalization process of the firm-a model of knowledge development and increasing foreign market commitments. Journal of international business studies, 23-32.
Karaev, A., Koh, S. C. L., & Szamosi, L. T. (2007). The cluster approach and SME competitiveness: a review. Journal of Manufacturing Technology Management, 18(7), 818-835.
Karlsson, C., Johansson, B., & Stough, R. (2005). Industrial Clusters and Interfirm Networks: Edward Elgar Publishing.
Knight, G. A., & Cavusgil, S. T. (2005). A taxonomy of born-global firms. MIR: Management International Review, 15-35.
Fang, G., Ma, X. Y., Brouwers-Ren, L., & Zhou, Q. (2014). Antecedents of network capability and their effects on innovation performance: An empirical test of hi-tech firms in China. Creativity and Innovation Management, 23(4), 436-452.
Forret, M. L., & Dougherty, T. W. (2004). Networking behaviors and career outcomes: differences for men and women? Journal of Organizational Behavior, 25(3), 419-437.
Franco, M., de Fátima Santos, M., Ramalho, I. and Nunes, C. (2014). An Exploratory Study of Entrepreneurial Marketing in SMEs: The Role of the Founder-Entrepreneur, Journal of Small Business and Enterprise Development, 21(2), 265- 283.
Löfsten, H. (2016). New Technology-Based Firms and Their Survival: The Importance of Business Networks, and Entrepreneurial Business Behaviour and Competition, Local Economy, 31(3), 393- 409.
Liao, J., Welsch, H., & Stoica, M. (2003). Organizational absorptive capacity and responsiveness: An empirical investigation of growth‐oriented SMEs. Entrepreneurship Theory and Practice, 28(1), 63–85.
Liesch, P., Welch, L., and Buckley, P. (2011). Risk and uncertainty in internationalization and international entrepreneurship studies. Management International Review, 51(6), 851-873.
Luzzini, D., Amann, M., Caniato, F., Essig, M. & Ronchi, S. (2015). The path of innovation: purchasing and supplier involvement into new product development. Industrial Marketing Management, 47(1): 109-120.
Masum, M., & Fernandez, A. (2008). Internationalization Process of SMEs: Strategies and Methods.
Mouzas, S. (2006). Marketing Action in Networks, European Journal of Marketing, 40(11/12), 1271- 1291.
Mu, J. (2014). Networking capability, network structure, and new product development performance. Ieee Transactions on Engineering Management, 61(4), 599–609.
Musteen, M., Datta, D.K., and Butts, M.M. (2014). Networks and Foreign Market Knowledge Facilitate SME Internationalization? Evidence from the Czech Republic Entrepreneurship: Theory and Practice, 38(4), 749-774.
McGrath, H. (2008). Developing a relational capability construct for SME network marketing using cases and evidence from Irish and Finnish SMEs.Waterford Institute of Technology.
McGrath, H., Medlin, C. J., & O’Toole, T. (2018). A process-based model of network capability development by a start-up firm. Industrial Marketing Management, 80, 214-227.
Mejri, K., & Umemoto, K. (2010). Small-and medium-sized enterprise internationalization: Towards the knowledge-based model. Journal of International Entrepreneurship, 8(2), 156-167.
Mitrega, M., Forkmann, S., Zaefarian, G., & Henneberg, S.C. (2017). Networking capability in supplier relationships and its impact on product innovation and firm performance. International Journal of Operations & Production Management, 37(5), 577–606.
Mu, J. (2014). Networking capability, network structure, and new product development performance. Ieee Transactions on Engineering Management,61(4), 599–609..
Nahapiet, J., and Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23(2), 242– 266.
Narver, J., and Slater, S. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54 (4), 20-35.
Lumpkin, G., and Dess, G. (2001). Linking two dimensions of entrepreneurial orientation to firm performance: The moderating role of environment and industry life cycle. Journal of Business Venturing, 16 (5), 42-51.
Liao, J., Welsch, H., & Stoica, M. (2003). Organizational absorptive capacity and responsiveness: An empirical investigation of growth‐oriented SMEs. Entrepreneurship Theory and Practice, 28(1), 63–85.
Luca, L. M. D., & Atuahene-Gima, K. (2007). Market knowledge dimensions and crossfunctional collaboration: Examining the different routes to product innovation performance. Journal of marketing, 71(1), 95-112.
Olkkonen, R., Tikkanen, H., & Alajoutsijärvi, K. (2000). The role of communication in business relationships and networks. Management Decision, 38(6), 403-409.
Oviatt, B. and McDougall, P.P. (1994). Toward a theory of international new ventures. Journal of International Business Studies, 25, 45–64.
Parida, V., Pesämaa, O., Wincent, J., & Westerberg, M. (2017). Network capability, innovativeness, and performance: A multidimensional extension for entrepreneurship. Entrepreneurship and Regional Development, 29(1–2), 94–115.
Rackham, N., & DeVincentis, J. (1998). Rethinking the sales force: Refining selling to create and capture customer value. Pennsylvania, NY: McGraw-Hill.
Rakthin,S., R.J. Calantone and J.F. Wang. 2016. Managing market intelligence: The comparative role of absorptive capacity and market orientation. Journal of Business Research, 9156: 1-9.
Reijonen, H., Pardanyi, S., Hirvonen, S., and Laukkanen, T. (2012). Entrepreneurial marketing orientation (EMO): An empirical test. Paper presented at the 41st Annual Conference of Marketing to Citizens, 22 to 25 May, Lisbon University.
Resnick, S., et al. (2011). Aligning Teaching and Practice: a Study of SME Marketing, Journal of Research in Marketing and Entrepreneurship, 13(1), 37- 46.
Saeed, S., Yousafzai, S., and Engelen, A. (2014). On cultural and macroeconomic contingencies of the entrepreneurial orientation-performance relationship. Entrepreneurship: Theory and Practice, 38 (2), 255-290.
Shafaeddin, M. (2012). Competitiveness and development: Myth and realities: Anthem Press.
Sapienza, H. J., Autio, E., George, G., & Zahra, S. A. (2006). A capabilities perspective on the effects of early internationalization on firm survival and growth. Academy of management review, 31(4), 914-933.
Sarkar, M. B., Echambadi, R., & Harrison, J. S. (2001). Alliance entrepreneurship and firm market performance. Strategic Management Journal, 22(6–7), 701–711.
Sanjaghy, M.E., A. Farrahy, H. Dorody and I. Zohourian. 2014. Mediation effect of organizational commitment on the relationship between entrepreneurial orientation and organizational performance. Journal of Human Resource Management, Imam Hossein University, 1: 1-29 (In Persian).
Schilke, O., & Goerzen, A. (2010). Alliance management capability: An investigation of the construct and its measurement. Journal of Management, 36(5), 1192–1219.
Semrau, T., Ambos, T., and Kraus, S. (2016). Entrepreneurial orientation and SME performance across societal cultures: An international study. Journal of Business Research, 69 (5), 1928-1932.
Simsek, Z., Lubatkin, M. H., & Floyd, S. W. (2003). Inter-firm networks and entrepreneurial behaviour: A structural embeddedness perspective. Journal of Management, 29(3), 427–442.
Singh, R., Hills, G., Hybels, R., & Lumpkin, G. (1999). Opportunity recognition through social network characteristics of entrepreneurs. Frontiers of entrepreneurship research, 228–241.
Simsek, Z., Lubatkin, M. H., & Floyd, S. W. (2003). Inter-firm networks and entrepreneurial behaviour: A structural embeddedness perspective. Journal of Management, 29(3), 427–442.
Stejskal, J., & Hajek, P. (2012). Competitive advantage analysis: a novel method for industrial clusters identification. Journal of Business Economics and Management, 13(2), 344-365.
Taylor, Paul. (2013). The effect of entrepreneurial orientation on the internationalization of SMEs in developing countries. African Journal of Business Management, 7 (19): 1927- 1937.
Teng, B. S. (2007). Corporate entrepreneurship activities through strategic alliances: A resource‐based approach toward competitive advantage. Journal of Management Studies, 44(1), 119–142.
Tsolakis, N. (2015). Entrepreneurial Prospects in Loyalty Marketing: Real-world Grocery Retailers’ Market Survey and Conceptual Case Study. Procedia- Social and Behavioral Sciences, 17(5), 3 -11.
Vidic, Franc. (2013). Entrepreneurial Orientation (EO) and Knowledge Creation (KC). International Journal of Economic Sciences and Applied Research, 6 (2): 103-124.
Wales, W. J., Parida, V., & Patel, P. C. (2013). Too much of a good thing? Absorptive capacity, firm performance, and the moderating role of entrepreneurial orientation. Strategic Management Journal, 34(5), 622–633.
Zaheer, A., Gulati, R., & Nohria, N. (2000). Strategic networks. Strategic management journal, 21(3), 203.
Walter, A., Auer, M., & Ritter, T. (2006). The impact of network capabilities and entrepreneurial orientation on university spin-off performance. Journal of Business Venturing, 21(4), 541–567.
Wu, S. P.-J., Straub, D. W., & Liang, T.-P. (2015). How information technology governance mechanisms and strategic alignment influence organizational performance: Insights from a matched survey of business and it managers. Mis Quarterly, 39(2), 497–518.
Yli-Renko, H., Autio, E., & Tontti, V. (2002). Social capital, knowledge, and the international growth of technology-based new firms. International Business Review, 11(3), 279-304.
Yoshino, Y. (2011). Industrial Clusters and Micro and Small Enterprises in Africa: From Survival to Growth: World Bank Publications.
Zahra, S. A., Filatotchev, I., & Wright, M. (2009). How do threshold firms sustain corporate entrepreneurship? The role of boards and absorptive capacity. Journal of Business Venturing, 24(3), 248–260.
Zahra, S.A., Korri, J.S. and Yu, J. (2005), Cognition and international entrepreneurship: implications for research on international opportunity recognition and exploitation, International Business Review, 14(2), 112-146.
Zahra, S. A., Neubaum, D. O., & Huse, M. (2000). Entrepreneurship in medium-size companies: Exploring the effects of ownership and governance systems. Journal of Management, 26(5), 947–976

Files

History

  • Receive Date: 30 December 2022
  • Revise Date: 10 June 2023
  • Accept Date: 22 February 2024

Share

How to cite

Statistics