Social networks across the SME organizational lifecycle

Abstract

Purpose

The purpose of this paper is to investigate how social networks evolve as small business enterprises transition across the organizational lifecycle. It aims to give attention to how social identities of small business owners impact social networks and whether social networks improve organizational performance in small firms.

Design/methodology/approach

A sample of small to medium‐sized enterprise (SME) owners employing less than 500 employees was drawn from the local directory of businesses in two Indian cities. A total of 297 SME owners participated in the study, for a response rate of 85.6 percent.

Findings

The findings show that social networks for small businesses change as firms transition from startup to growth and beyond. Personal networks were most important during startup, with other social networks growing in contact frequency and importance over time. The findings also show that small business owners can be classified along network preferences and that social networks lead superior performance.

Research limitations/implications

The study focused on a limited set of performance indices. Future research should assess a wider set of organizational metrics and should investigate granular aspects of transitional networks.

Practical implications

The findings suggest that small business owners cannot adhere to the status quo and must instead be willing to change business practices as their organizations evolve across the organizational lifecycle.

Originality/value

The study provides evidence that small business owners use different types of social networks and that the range and value of the strategic advice that they receive differ as their organization unfolds over time. The research contributes to the literature by showing that social networks and entrepreneurial learning practices are not static, and instead must be viewed in terms of dynamic decision making needs and processes.

Citation

Peltier, J.W. and Naidu, G.M. (2012), "Social networks across the SME organizational lifecycle", Journal of Small Business and Enterprise Development, Vol. 19 No. 1, pp. 56-73. https://doi.org/10.1108/14626001211196406