Familial Networks and Regional Entrepreneurs in Northeast Mississippi's Upholstered Furniture Industry

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ABSTRACT

Using a sample of 75 owners, we examine the role of familial networks in the establishment and proliferation of the upholstered furniture industry in Northeast Mississippi. Our data show that strong familial and associational ties are linked to the original furniture plant and its owner--approximately 70 percent of our sample. Owners have used these strong-ties typical of rural regions to facilitate a regional development outcome where owners do not see each other as competitors, but they share in knowledge resources. There is a general feeling that, "There is plenty to go around, just let me get my fair share." When local competition represents one's friends and/or family, competition moves to a more distant, less intimate focus thus facilitating even more local entrepreneurial opportunities.

Keywords: familial networks; inertia; nepotism; Northeast Mississippi; strong ties; upholstered furniture industry

INTRODUCTION

Manufacture of upholstered furniture is the largest industry in rural Northeast Mississippi, producing more upholstered furniture in this ten-county region than in any other part of the nation (Bullard & West, 2002; Community Development Foundation, 1993). By 1991, an estimated $1.2 billion, representing 6 percent of the nation's $19.4 billion in upholstered furniture manufacturing, was generated in Northeast Mississippi's 194 plants. The plants employed 20,687 people and accounted for 11.2 percent of all manufacturing jobs and 9.7 percent of manufacturing payrolls in the state (Community Development Foundation, 1993). Today, the industry accounts for $1.3 billion in wages, and $1.9 million in value of shipments (Bullard & West, 2002).

We explore how the manufacture of upholstered furniture became so prominent in rural Northeast Mississippi and how tapping into the overtly rural characteristics of the region specifically strong family ties facilitated its success.

Industry Siting Decisions and Northeast Mississippi

While lists of factors predicting why businesses locate in one place over another are common (see Carroll & Hannan, 1995; Hannan & Freeman, 1989; Schmenner, 1982), Blair (1991) argues that the most important factor in location decisions is "inertia." Once an initial industry has been established in an area (for whatever reason), if successful, it creates a supporting infrastructure by developing ties to other producers, buyers, and employees in the region making it easier for others to move in (Scott & Meyer, 1994; Powell & DiMaggio, 1991; Brinton & Nee, 1998; see also Carroll & Hannan, 1995 on the concept of "organizational ecology"). Thus regions can, over time, create reputations for attracting certain types of business. Inertia has clearly played a role in the upholstered furniture industry in rural Northeast Mississippi. The first plant was established in 1948. By 1953, only four years later, there were forty-three. In 1992, this had increased to one hundred and ninety-four.

Supportive ties across organizations are the critical element in organizational inertia. Community researchers have consistently shown that rural places have a higher concentration of "strong ties"--social connections that are characterized by primary relationships across close associates and family (Granovetter, 1973)--than do urban areas (see also Beggs, Haines, & Hurlbert, 1996). Additionally, recent scholarship on "nepotism" (see Bellow, 2003) has argued that family networks facilitate capitalistic enterprises.

   [N]epotistic concern for the welfare of children is the engine of
   the capitalist system: take that away and you destroy the main
   incentives for innovation and the creation of wealth...
   [M]eritocracy unleavened by personal ties is inhumane, as ample
   evidence will show. Finally, on the individual level, nepotism
   is a profoundly moral relationship, one that transmits social and
   cultural values and forms a healthy bond between generations
   (Bellow, 2003: 25 emphasis in original). …