Networking as a tool for competitive advantage evidence from Swedish new ventures

Abstract: The purpose of this thesis is to increase our understanding of factors influencing new venture performance, and ultimately survival. The focus of this research is to study how network relationships, and a new venture's ability to initiate, develop and utilise the relationships that affect the firm's entrepreneurial strategy (here defined as the firm's entrepreneurial orientation) when seeking competitiveness. If a new venture is entrepreneurially oriented, then it would be more innovative, proactive and risk-taking, which in turn would improve its performance. By utilising network relationships, a new venture can obtain access to vital resources, capabilities and information missing in the firm, resulting in entrepreneurial opportunities. Moreover, by being good at identifying and managing the relationships the new venture should achieve more from its relationships. As a result, in this study it is hypothesised that a new venture's network structure and its network capability should increase a firm's entrepreneurial orientation, and its performance. However, contextual factors such as a new venture's internal and external complexity are alleged to moderate the link between a firm's entrepreneurial orientation, its network structure and its network capability, and venture performance. This means that the more complex a new venture is, the more it should benefit from the employment of an entrepreneurial orientation and by networking. To test theses assumptions, a survey study has been conducted among Swedish new ventures and the results contribute both to the scientific field, to entrepreneurs in the process of establishing a new venture, and practitioners supporting new ventures. First, this study confirms that network structure and network competence are facilitative of a new venture's entrepreneurial orientation. In other words, engaging in network relationships and having an ability to initiate, develop, and utilise these relationships early in a firm's development will increase a new venture's innovativeness,proactiveness and risk-taking. Second, this study also supports prior research that an entrepreneurial orientation increases firm performance. Hence, by acting more entrepreneurially when entering a (new) market, a new venture increases its performance. Finally, considering the new venture's degree of complexity, this study did not find any moderating effects. However, both internally and externally complex ventures used more entrepreneurial orientation, network capability and network relationships to improve their competitiveness and performance. Venture complexity can thus be an important factor to take into consideration when the entrepreneur/s, or supporting actors, strive for high performing ventures and increased firm survival.

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