THE ROLE OF SOCIAL CAPITAL
2. Theoretical development
As mentioned above, the main target of this study is to dwell on the basic social determinants of the entrepreneurs’
success. The emphasis is put on the manner by which a new venture, recently involved in the market and disadvantaged to established organizations, can go beyond its liability of newness. To do so, its nascent founder is called to obtain and recombine paramount resources the venture needs to acquire a certain reliability and stability (for more details, see Delmar and Shane, 2004; Tornikoski and Newbert, 2007).
In what follows, we first propose some hypotheses related to the effects of the entrepreneurs’ social capital on their access to outside vital resources. Then, we point out the key role of specific social skills by developing
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hypotheses concerning not only their impact on the access to relevant external resources, but also on the social capital development.
2.1. Effects of social capital
In compliance with the previous studies conducted by the network theory advocates; Baron and Brush (1999) as well as Baron and Markman (2000, 2003) have drawn attention, at least in a way, to the importance of the social capital (defined as the set of connections and interactions in the entrepreneur’s network, enabling him to gain access to other resources; Kim and Aldrich, 2005).
These authors have indicated that social capital helps entrepreneurs gain access to people who are willing to support the development of their ventures.
For this reason, we focused on the bridging social capital perspective advanced by Burt (1992, 2000), then by Adler and Kwon (2002). This view describes social capital in terms of weak and non redundant ties in a large network of relationships. Unlike strong ties built with family members and close friends, weak ties correspond to the vague, occasional or fortuitous acquaintances which don’t generate an emotional investment (Dubini and Aldrich, 1991). However, the non redundant ties constitute contacts that don’t give access to the same sources of information and then to the same people (Burt, 1992, 1997). Finally, the extent of a network is approached by the number of contacts the entrepreneur knows.
The preceding considerations lead us to propose the following hypothesis:
Hypothesis 1: A high level of social capital assists the entrepreneur to gain access to financing.
On the basis of the research orientation developed by Cable and Shane (1997, 2002), and Batjargal and Liu (2004) who underlined that a developed entrepreneurial social capital generates access to financing, we can hypothesize that:
Hypothesis 1a: A high level of social capital assists the entrepreneur to gain access to financing.
Furthermore, following Nahapiet and Ghoshal (1998), Seibert and colleagues (2001), Yi- Renko et al (2001), Uzzi and Lancaster (2003) as well as Cantner and Stutzer (2010), we argue that new ventures operating in uncertain areas benefit more from their non redundant, weak and numerous ties to acquire useful information they need for the development of their new ventures. Thus, we can suggest the following testable hypothesis:
Hypothesis 1b: A high level of social capital assists the entrepreneur to gain access to relevant information.
2.2. Effects of social skills
Once again, focusing on the conceptual insights and empirical findings suggested by Baron and Markman (1998, 2003); Baron (2004); Baron and Tang (2009), we will focus, in what follows, on the most relevant social skills in the Tunisian High-Technology context in order to push forward a more coherent view of their beneficial effects on the access to useful information and financing.
These social competencies involve:
(1) Persuasiveness: it refers to the capacity for changing the attitudes or behaviors of others in the pursuit of compliance (Dillard and Marshall, 2003; Dillard, 2004). It represents the aptitude to control and influence the answers of others towards the expected directions (Cialdini, 1994, 2000; Ewart et al., 2002).
Gartner et al (1992) and Baron and Markman (1998; 2003) have argued that entrepreneurs’ proficiency at social influence contributes to their success.
On the basis of these findings, we can propose the following hypotheses:
Hypothesis 2: The entrepreneur’s skill at persuasiveness has a positive impact on his access to essential resources.
In this perspective, the entrepreneur’s success is explained by his ability to quickly obtain the adhesion and support of the current and potential investors (venture capitalists or bankers) ideas or goals. Baron and Markman (2003), and Chi, Baron et al (2008), pointed out that persuasiveness may change the investors’ attitudes and decisions, as well as other stakeholders’ ones, towards the entrepreneur’s desired goals. Then, we can propose the following hypotheses:
Hypothesis 2a: The entrepreneur’s skill at persuasiveness has a positive impact on his access to financial resources.
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Hypothesis 2b: The entrepreneur’s skill at persuasiveness has a positive impact on his access to the relevant and useful information.
(2) Impression management: it is defined as the proficiency at making good impressions on others and inducing positive and favorable reactions to them (Schlenker, 1980; Wayne and Liden, 1995). According to Baron and Tang (2009), it includes two distinct components: ingratiation, which refers to the efforts provided in order to induce high degrees of esteem on others by expressing liking for them or asking for their advice and Feedback (Wayne and Ferris, 1997) and self-promotion, which involves the ability at positively presenting his own skills and accomplishments in order to increase one’s appeal to others (Bolino and Turnley, 1999);
These research findings corroborate those of Baron and Markman (1998, 2003) and Baron (2004). Moreover, Baron and Tang (2009) added that the amount of efforts made by entrepreneurs to make a first good impression on others and induce high degrees of liking in them- defined as ingratiation- could strongly influence the entrepreneurs’
success.
Hypothesis 3: The entrepreneur’s skill at ingratiation is positively related to his access to the essential resources.
Hall and Hofer (1993), Timmons (1994), Zacharakis and Meyer (1995) as well as Shepherd et al (2007) stressed that venture capitalists' decisions concerning their investment in the assembly and development of new ventures are strongly dependent on the profile of entrepreneurs, their current behaviors, their competencies and their experiences, by “the manner which is the person himself”.
These considerations bring us to propose this hypothesis:
Hypothesis 3a: The entrepreneur’s skill at ingratiation is positively related to his access to financial resources.
Moreover, Baron and Tang (2009), referring to Lewicki and Wiethoff (2000), Ferris et al (2005), argued that impression management tactics used by the entrepreneur, and based on ingratiation and flattery, engender high levels of trust and liking of others. This may, in turn, provide the entrepreneur with a large array of information. Thus, we can hypothesize that:
Hypothesis 3b: The entrepreneur’s skill at ingratiation is positively related to his access to the relevant information.
(3) Emotional Intelligence: it represents the ability to perceive and express one’s feelings adaptively, the adeptness at understanding, regulating and monitoring emotions in oneself and others (Mayer and Salovey, 1995, 1997; Mayer et al, 2001; Goleman et al, 2002).
The scholars have also advanced that Emotional Intelligence could be an important predictor of success not only in personal relationships and family functioning, but also in the workplace (Goleman et al, 2002).
Goleman (1998) distinguished between two clusters of emotional skills: the first one is called personal emotional intelligence and refers to self-awareness and self-management (understanding and controlling one’s internal states, preferences, intuitions and resources); the second represents social emotional intelligence and encompasses social awareness and relationship management (understanding emotions of other people and dealing well with them).
To adapt the previous findings to our present context, we will focus, in what follows, on the personal emotional intelligence which seems to be more efficient for gaining access to external useful resources (according to qualitative research findings). Thus, we propose the following hypothesis:
Hypothesis 4: The entrepreneur’s skill at personal emotional intelligence has a positive impact on his access to the essential resources.
More specifically, Soros (1987), Gardner (2004) and Bandura (1995, 2001) highlighted that self-awareness, self-confidence and self-efficacy have positive impacts on self-fulfilling, handling changes, pursuing goals, and improving success in obtaining the desired resources. On the basis of this reasoning, we can test the following set of hypotheses:
Hypothesis 4a: The entrepreneur’s skill at personal emotional intelligence has a positive impact on his access to financial resources.
Hypothesis 4b: The entrepreneur’s skill at personal emotional intelligence has a positive impact on his access to the relevant information.
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Additional lines of evidence provide support for our prediction that socially skilled entrepreneurs will develop their network of relations and then their social capital more effectively so that they both raise their status within the market, and provide essential resources for the development of their new ventures.
In this perspective, Baron and Markman (2000, p.1) reported that « Specific social skills, such as the ability to read others accurately, to make favorable first impressions, adapt to a wide range of social situations, and be persuasive, can influence the quality of these interactions»; they added that « social capital is often the result of such skills».
In line with these assumptions, Diener and Seligman (2002) mentioned that «persons with high various social skills tend to have social contacts wider than those with low social skills».
Similarly, Baron (2004, p.222) revealed that «social skills may provide an important foundation for the development of social capital».
Hypothesis 5: The entrepreneur’s social skills are positively related to the development of his social capital.
Furthermore, Meurs (2008) used Conservation of Resources theory to support that social capital resources are gathered, maintained, and employed to reach desired personal and organizational goals by the socially skilled individual.
The resources he proposed are the most valuable, rare, inimitable, and non substitutable (Barney, 1986, 1991). He argued that a socially skilled person is better able to discern the resources that fall into those categories and to strategically employ them in the pursuit of his desired goals.
In this regard, we suggest testing these hypotheses:
Hypothesis 5a: The entrepreneur’s skill at persuasiveness is positively related to the development of his social capital.
Hypothesis 5b: The higher the entrepreneur’s skill at ingratiation, the higher his social capital’s level will be.
Hypothesis 5c: The entrepreneur’s proficiency at personal emotional intelligence has a positive impact on the level of his social capital.