Academic journal article Entrepreneurship: Theory and Practice

Satisfaction, Investment, and Alternatives Predict Entrepreneurs' Networking Group Commitment and Subsequent Revenue Generation

Academic journal article Entrepreneurship: Theory and Practice

Satisfaction, Investment, and Alternatives Predict Entrepreneurs' Networking Group Commitment and Subsequent Revenue Generation

Article excerpt

Prevailing wisdom across the body of research regarding social ties suggests that quantity matters. However, this logic is less applicable in formal networking groups, which have a bounded (and stable) membership. In such a setting, we argue that the quality of an entrepreneur's relationship with the networking group is what matters. Accordingly, we suggest that the networking group setting is one in which core tenets of the literature need refining. Consistent with our predictions, findings from a sample of 279 entrepreneurs across 25 separate networking groups demonstrated that entrepreneurs' affective commitment to the group mediated the relations among (1) satisfaction with their group, (2) investment in their group, and (3) perceptions of alternatives to their group with the outcome of percentage of revenue generated from the networking group. These data provide insight into the psychological and behavioral antecedents of performance for entrepreneurs in networking groups: entrepreneurs who are more affectively committed to their networking groups are more likely to experience gains in revenue attributed to the group. We discuss the implications of these findings as well as offer multiple directions for future work.


For entrepreneurs, networking--forging new social ties that lead to information and resources and, ultimately, increased value creation for the venture--is considered an essential component of the firm start-up and growth process (Delmar & Shane, 2004; Vissa, 2011, 2012; Zhao & Aram, 1995). Bird (1988) conceptually related networking skills to a greater level of attunement--the readiness to send and receive information--and proposed that entrepreneurs with greater networking skills will achieve greater attunement, and ultimately more success, than entrepreneurs who lack such skills.

An increasingly popular route through which entrepreneurs attempt to acquire new social ties, via networking, is through membership in a formal networking group (e.g., Pollack, VanEpps, & Hayes, 2012). The way entrepreneurs' membership in a formal networking group fosters access to potential new clients is through the social ties generated from attending weekly meetings and having fellow members provide referrals to new contacts (e.g., Gilmore & Carson, 1999; de Janasz & Forret, 2007; O'Donnell, 2004; Parrott, Roomi, & Holliman, 2010). Business Networking International (BNI), for example, is the world's largest business networking organization with operations in over 50 countries and over 2,800 chapters (Thompson, 2010)--the goal of BNI is to connect group members with one another to exchange referrals, and other resources, and increase members' income.

Although a growing body of research highlights the importance of networking across the stages of entrepreneurial development (Greve & Salaff, 2003; Le & Nguyen, 2009; Malewicki, 2005), very little is known about how networking actually leads to beneficial business-related outcomes. Prevailing wisdom based on extant research suggests that a greater quantity of ties is beneficial for the discovery of business opportunities (Singh, Hybels, & Hills, 2000) as well as better business performance (e.g., Kilduff & Brass, 2010; Lerner, Brush, & Hisrich, 1997; Watson, 2007; Witt, 2004). Yet, in a formal networking group--where the number of group members is relatively bounded and stable--the standard recommendation of generating more social ties is not as applicable as compared to other avenues of networking where one can add any number of social ties at will (e.g., Facebook, LinkedIn). Thus, we argue that the networking group is one setting in which core tenets of research on social ties need refining.

Accordingly, in the present work, we take a different approach. We address this issue by integrating the burgeoning literature on entrepreneurial networking with well-established empirical work on the investment model of commitment (Rusbult & Farrell, 1983) to investigate how an entrepreneur's relationship with a formal networking group leads to increased revenue generation. …

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