Pauric McGowan and Alison Hampton
Introduction
In recent government publications, women have been recognised as a signific- ant, yet relatively untapped, source of entrepreneurial potential (Sundridge Park Management Centre, 1995; CEEDR, 2001; O’Reilly and Hart, 2003). This is particularly true in the area of new venturing and enterprise development (Carter and Anderson, 2001; McMurray, 2001; Orhan and Scott, 2001; Henry and Kennedy, 2003). Indeed, as areas of research, female entrepreneurship and the efforts of women to establish and develop growth-oriented business ventures are largely underdeveloped (Brush, 1992; Rosa and Hamilton, 1994). Often, it is claimed that research in this area, particularly that conducted by male researchers, is presented in a manner that suggests that women operate busi- nesses in ways that are similar to male entrepreneurs (Buttner, 1993; Davis and Long, 1999). Yet, one key difference identified between men and women in business is in the area of network development (Aldrich, 1989). Networking, as an area of research, continues to offer potential for greater development (O’Donnell and Cummins, 1999) and, with reference to female entrepreneurial networking practices, this is particularly true. Shaw et al.(2001), for example, suggest that, although there exists a substantial amount of anecdotal evidence to indicate that gender differences are evident in building and utilising networks, the subject has received little by way of rigorous academic research attention.
There is a need, therefore, first to acknowledge that, when it comes to managing networks, women may not do business in the same way as men and second, to show that there is real potential in examining how women create and manage networks in order to establish new ventures and grow existing businesses.
The aim of this chapter, therefore, is to build on existing research by provid- ing further insights into the networking practices of both new and established female entrepreneurs. In this regard, we present the findings of our pilot study which focuses on two groups of female entrepreneurs: one group engaged in new venture start-up, and the second in the development of their existing ven- tures. As part of a wider, longitudinal study, the aim of this research was to determine the extent to which a model of the networking behaviour of female entrepreneurs could be developed for subsequent testing with a larger sample.
Sectoral issues, while relatively unimportant at this stage of the research, will be addressed in the wider study. However, an important dimension, even at this initial pilot stage, is the exploration of the contribution of other females to the networking activities of female entrepreneurs. The chapter is structured as follows: first, the authors discuss the research context for their study by review- ing the pertinent literature on entrepreneurial networking and female networking so that the key issues can be distilled. Second, details of the methodology adopted for the study are presented, and, given the pilot nature of the research, this section includes a discussion on the limitations of the methodology and sample size. Following this, the analysis of the research data is presented. The penultimate part of the chapter provides a discussion of the key issues arising, and presents a tentative model of female networking behaviour. Finally, by way of conclusion, the authors consider important areas for further research.
Research context
Entrepreneurial networking defined
An entrepreneurial individual is described as one who combines particular traits and behaviours with appropriate managerial skills in order to establish a new venture or to develop an existing one (Adams and Chell, 1993). The entrepre- neurial process, which challenges the entrepreneurial individual to obtain and maintain a fit between an opportunity in the marketplace and the resources needed to exploit it, is recognised in research to be a particularly dynamic one (Timmons, 1994). A key resource in managing this dynamic process, and in making decisions on how to progress a venture speedily and accurately in an often rapidly changing environment, is the entrepreneur’s network of contacts.
Indeed, as Johanisson (1986:20) suggests, ‘the personal network of the entrepre- neur should be regarded as his/her major asset’.
Entrepreneurial networks are defined as those relationships that an individual develops and utilises, consciously or subconsciously, to progress a particular enterprise, whether it is to establish a new venture, for example, or to develop an existing one. They can be highly personal, reflecting relationships that are deeply embedded in the life of the individual. Such contacts are characterised by high levels of mutual trust and commitment that have been developed over time and through shared experiences (Cromie and Birley, 1992). They can be highly formal, also reflecting a more deliberate and controlled approach to managing relationship building. They include network brokers, Enterprise Centre person- nel and other professionals who seek to provide support to the entrepreneurial individual in his or her efforts to establish or develop their business ventures (Aldrich and Zimmer, 1986; Blois, 1996).
The value of an entrepreneur’s network of relationships in making decisions about how to progress an enterprise depends, however, on a number of quality factors (Aldrich and Zimmer, 1986; Hunt and Morgan, 1995). Research suggests that any network needs to have ‘density’, reflecting the degree to which those in Networking practices 111
the individual’s network know each other and can share ideas and opinions, even in the absence of the entrepreneur him or herself. ‘Diversity’ in an indi- vidual’s network means that there is a sufficient variety of skills and experiences in the network to provide the individual with rich feedback. ‘Reachability’ in a network addresses the issue of the individual being able to make contacts through the existing network with people outside it. This raises a final quality factor in terms of the ‘strength of weak ties’, where the value of being able to access the contributions of people with whom the individual entrepreneur is unacquainted becomes apparent. Strong ties, made up of people who know the entrepreneur almost too well, may cease to be able to provide objective guidance and advice. A weak tie, on the other hand, has no other agenda than to make an objective contribution to a decision to be made or a problem to be resolved (Gra- novetter, 1973, 1982; Hoang and Antoncic, 2003).
A further point is the need to recognise that networks change over time. For example, the network of relationships that the new venture founder has initially when establishing the venture will necessarily develop and change as the venture begins to develop and grow. Butler and Hansen (1991), indeed, suggest that, for the lead entrepreneur in any enterprise, the development and manage- ment of networks of relationships over the life cycle of the firm amounted to a strategic imperative.
Networking behaviour of female entrepreneurs
Female entrepreneurs, similar to their male counterparts, need to be effective networkers. Indeed, Brush (1997) suggests that networking is crucial for female entrepreneurs seeking to grow their firms or to establish new ventures. Other research suggests that clear gender differences exist in the networking practices of females, for example, with respect to building and maintaining networks (Carter, 2000), defining the role of networks (Aldrich, 1989), in the composition of networks (Aldrichet al., 1997) and in the determination of quality in female networks (Ibarra, 1993; Knouse and Webb, 2001).
It is clearly important to understand what constitutes effective female net- working and, indeed, to gain insights into how females develop quality in their network of relationships, which is deemed so essential for any successful busi- ness formation and expansion (Carter and Allen, 1997; Carter and Anderson, 2001; Shawet al., 2001). From the literature, it would appear that the network- ing practices of female entrepreneurs are heavily influenced by family responsibilities in the decisions they make with respect to entrepreneurship prac- tice (Martin, 2001). Other factors that have a bearing on their decision-making process appear to be the limited nature of their educational qualifications and the lack of appropriate business experience beyond middle management (Aldrich, 1989). In order to further our understanding of the networking practices of female entrepreneurs we turn now to consider the role of female entrepreneurial networks.
112 P. McGowan and A. Hampton
The role of female entrepreneurs’ networks
Networked relationships are a critical resource for female entrepreneurs seeking to establish or grow their enterprises (Rosa and Hamiliton, 1994). The benefits of networking for the female entrepreneur seeking to establish a new venture or to develop an existing business include, but are not limited to, providing information on a dynamic environment (Birley, 1985), offering support and con- firmation in decision making (Johannissonet al., 1994), identifying new product ideas (Carsonet al., 1995) and developing new contacts, particularly with new customers (Dodd, 1997). Research by Moult (2000), for example, indicates that networking also plays a critical key role for female entrepreneurs. Networks emerge as being of particular importance to females in providing strong emo- tional support; in building confidence and in providing motivation and high levels of stability in circumstances of change that often characterise the roller- coaster ride of entrepreneurial new venturing (Smeltzer and Fann, 1989; Butler and Hansen, 1991).
Research by Okanlawon (1994) develops an aspect of this theme by suggest- ing that, within mixed groups, women tend to articulate their viewpoints less often than when they are within the perceived ‘safe environment’ of an all- female group. It seems that females are reluctant to become involved in formal networks, which they perceive as being largely male-dominated. As such, they fear being seen as less competent than their male counterparts (Smeltzer and Fann, 1989). This appears crucial in affecting the level of confidence of the female entrepreneur in conducting business. More recently, however, it is believed that female entrepreneurs have learned to utilise networking for the purposes of confidence building and to gain reassurance by building networks with females (McGregor and Tweed, 2001). According to Moore (2000), women entrepreneurs rely on other women they trust and in whom they can confide to provide both support and encouragement for achieving their business dreams and ambitions. Also highlighted in this research is the increasingly important role of accessing appropriate network brokers and mentors who are also female. This is addressed in the next section.
Types of networks utilised by female entrepreneurs
Informal networking
Research by Hill and McGowan (1996) suggests that personal contact network- ing is increasingly viewed as an essential entrepreneurial competence, the mastery of which is a core determinant of the potential of any enterprise. Inter- estingly, research by Buttner (1993) suggests that, while men’s motives for forming informal relationships with others are largely based on issues of per- sonal gain, women’s motives to network informally tend to be driven by a need to achieve and maintain strong social affiliations (Moore, 1998; Buttner, 2001).
Thus, gaining information and resources through people known to the female Networking practices 113
entrepreneur, i.e. either directly or through friends and family, is consistent with her particular approach to doing business. Even though females tend to network informally, they appear to approach networking in a conscious, deliberate way in which they seek to actively connect themselves with other females in business and, through them, to find ways of expanding their existing network of contacts (Smeltzer and Fann, 1989). This emphasis on maintaining strong social net- works made up largely of family and friends, combined with an interest in build- ing relationships with other females, suggests an inherent weakness in female networking practices. Such an approach, while addressing an individual’s need for emotional support and providing motivation and stability, may be detrimen- tal to the development of quality factors, such as density, diversity and reacha- bility. However, it must be recognised that female entrepreneurs have faced great difficulty in gaining access to many of the informal, well-established net- working groups, managed for the most part, if not exclusively, by males (Aldrich, 1989; Okanlawsom, 1994). Female entrepreneurship is a relatively new phenomenon. Thus, women’s representation in these informal networks is only beginning. Nevertheless, formal networking events and activities, initially involving women only, have gone some way to respond to this challenge to build the networking competencies of female entrepreneurs and to widen their circle of contacts (Davis and Long, 1999). We consider formal networking and female entrepreneurship in the next section.
Formal networking
Extant research suggests that formal networking for women is predominately based on gender rather than permeating gender lines (Buttner, 1993, 2001).
The current trend towards all-female formalised networking activities has attempted to provide female entrepreneurs with a forum for developing their competencies as networkers. Research by Strauss (2000), for example, sug- gests that females tend consequently to become involved in all-female for- malised networks in order to gain the advantages they perceive available from informal ‘old boy’ type networks. As such, these all-female forums can provide a useful opportunity for discussions on overcoming and tackling the challenges of establishing and developing a business. Crucial to effectiveness in this area, particularly for new venturers, are other female mentors. They play a special key role for these new female entrepreneurs. Their experienced guidance and emotional support can be crucial in determining the likelihood of future success, providing the aspiring new venturer with a role model whom they might aspire to emulate (Addison Reid, 1994). This concept is dealt with further below.
Increasing the effectiveness of networking by female entrepreneurs
An understanding of effective networked relationships is essential in gaining access to quality networks, deemed vital for business formation and expansion 114 P. McGowan and A. Hampton
(Carter and Allen, 1997; Carter and Anderson, 2001; Shaw et al., 2001).
Research suggests, however, that women face real challenges in introducing and developing appropriate quality factors into their networking activities, such as density, diversity, reachability and appropriate ties (Aldrich, 1989; McMurray, 2001; Shawet al., 2001). Strauss (2000), for example, suggests that, if women are to become more effective at networking, they need to enhance networking competencies in order to build in such quality factors to their networking efforts.
To do this, Strauss suggests that they need to access, at least initially, other female entrepreneurs who can act as role models as well as mentors. The sug- gestion is that other female business owners and women professionals are better placed to provide the help and insights required by aspiring female entre- preneurs seeking to establish and grow business ventures.
In a similar vein, Sullivan (2000) also expresses the view that there is a need to match mentors and clients on the basis of gender. The suggestion is that a key factor in helping women to engage in self-employment and entrepreneurial new venturing is the availability of role models with whom they can identify (Carsrud and Olm, 1987; Bygrave and Minniti, 2000). The difficulty in this regard, however, is the dearth of female network brokers in the enterprise support system, such as female bankers or female venture capitalists, as well as female mentors with the available time to commit. There would appear to be recognition that the availability of other females to provide support and guid- ance for female new venturers in the entrepreneurial network is essential, if not critical, at the initial stages of venture creation and beyond. The challenge, however, is ensuring that such resources are available in sufficient numbers to make a difference.
By way of summarising the pertinent literature on female entrepreneurial net- working to date, we have identified the following key themes.
• Networks are a key entrepreneurial resource in determining how an entre- preneurial female does business, whether in starting a new venture or devel- oping an existing one.
• Some networking practices of female new venturers are particular to them, as a group, placing an emphasis on the social network, and on female spe- cific networks.
• Quality in networks is determined by factors such as density, diversity, reachability and issues of ties. Thus, female networking activities may have limited quality aspects, particularly in the start-up stages.
• Entrepreneurial networks evolve throughout the life cycle of the enterprise, which may have implications for the way that female entrepreneurs network as well as the distinctiveness of that activity.
Given the above, and in view of the importance of networking to female entrepreneurial business creation and development, there is a need for further research to be undertaken. In the following section we outline the nature of our research and describe the particular methodology employed.
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The study
As already indicated, our study was designed as part of a larger research project in which a tentative model of female entrepreneurial networking behaviour would be applied. The aim, therefore, of this pilot study was to determine the extent to which such a model could be developed. Hence a qualitative research methodol- ogy was considered appropriate for this study, given the infancy of the research topic and the exploratory nature of the research itself (Hirschman, 1986; Miles and Huberman, 1994; Hillet al., 1999; Carsonet al., 2001). The empirical study involved a team of two researchers, undertaking a series of unstructured, in-depth interviews. The emphasis by both researchers was on an informal, exploratory discussion, rather than asking a series of specific, rigid questions. However, prior to the collection of any data for the study, an interview guide was formulated on the basis of themes distilled from a review of the pertinent literature.
The themes allowed the researchers to explore the wider issues that surround the key area of female entrepreneurial networking during the interviews, without explicitly referring to the research agenda. Due to the informal nature of the interview structure, the participants were able to discuss their individual experi- ences, as well as any issues they felt to be pertinent, in an open manner, allow- ing the issue of networking to emerge naturally. Probing the respondent was only conducted in order to develop the discussion and to keep a focus on the research themes. With particular focus on the networking practices of female entrepreneurs, the core themes that require further research include:
• how the female entrepreneurs started their business ventures;
• the crucial decisions made at different stages of business development and the basis for such decisions;
• how these decisions were validated;
• the critical challenges in maintaining and developing the business.
In-depth interviews were conducted with twelve female entrepreneurs. The focus on in-depth interviews allowed the researchers to gather reliable and valid data (Saunders et al., 2000) in order to explore female entrepreneurial network- ing practices. Eight of the female entrepreneurs were defined as ‘new venturers’
and four were the owners of ‘established companies’. For the purpose of this research, ‘new venturers’ are those female entrepreneurs who are involved in the initial start-up phase of company development. In other words, they have been operating the business for a short period of time, perhaps under five years; sub- sequently, they have a limited market and product range (Carson and Cromie, 1989). The companies which have been in business for over five years were classified by this research as ‘established companies’. These enterprises have a greater number of employees, greater market penetration and an extended product range, in comparison with new venture firms, which have developed as a result of their increasing number of years in business.
Participants in the research were drawn from women’s networking organisa- tions in Northern Ireland, university innovation centres and the researchers’ per- 116 P. McGowan and A. Hampton