The importance of entrepreneurship to organisational health and national economic growth has been widely acknowledged. Concerned government agencies and economic development boards have tried to encourage entrepreneurship. Academics have spent endless effort looking into the variables associated with entrepreneurship.
The Traditional Approaches to the Study of Entrepreneurship
There have been two main approaches to the study of entrepreneurship. One focuses on psychological aspects, researching traits or behaviours, or both. The other focuses on sociocultural aspects, researching the social and cultural backgrounds of entrepreneurs. In the behavioral (sociocultural) approach to the study of entrepreneurship, an entrepreneur is seen as a set of activities involved in organization creation, while in the trait approach, an entrepreneur is represented by a set of traits and characteristics.
Gartner (1989) has organized the literature on entrepreneurs and entrepreneurship, disclosing a startling number of traits and characteristics that can be attributed to the entrepreneur. It seems that these psychological profiles could fit anyone. Learning from the history of research on leadership, Gartner suggested that it would be more fruitful to focus on the behaviour of the entrepreneurs in order to determine what situational factors affect their behaviour. Carland, Hoy, and Carland (1988) stated that the problems with the trait approach point to the need for improving the methodology. In the infancy of entrepreneurial study, it is not wise to discard this approach entirely, but we should not rely solely on this approach.
Entrepreneurship also can be studied as a function of entrepreneurs' social and cultural identities. This approach explains entrepreneurship as influenced by membership in certain ethnic, political, or occupational groups. Wong (1988) describes how immigrants from Shanghai, many of them with educational qualifications not recognized by the colonial government, formed their own business in Hong Kong.
These two approaches have been very useful in providing information on different aspects of entrepreneurship. However, the trait approach overgeneralized about individual sources of entrepreneurship. The sociocultural approach stereotyped the ethnic, cultural, or religious group as being the source of the entrepreneurial impetus. Chu and Siu's (1993) study of Hong Kong female entrepreneurs and Tuan, Won, and Ye's (1986) study of Chinese entrepreneurship in Hong Kong and Guangzhou were based on traditional approaches to describe the entrepreneurs. They encountered the same problems as the research carried out by their Western counterparts in the U.K. and North America.
The weaknesses of the traditional approaches also include the assumption that resources, one of the key factors contributing to business success, are freely available to those with the right psychological or sociocultural backgrounds. This limitation led researchers to develop a new framework for the study of entrepreneurship, focused on the mechanisms through which the entrepreneurs obtain resources.
The Social Network Approach to the Study of Entrepreneurship
A social network perspective has been suggested (Aldrich & Zimmer, 1985; Johannisson, 1986) to explain why some people are more successful in starting and maintaining businesses, discounting the personal and sociocultural factors. In the case of Chinese entrepreneurship, a social network approach was deemed most appropriate because one's social network is viewed as a factor crucial to business success in a Chinese society (Redding, 1991). The social network approach suggests that a person's behaviour is contingent on the nature and structure of his social relationships, which also provides the resources and support required for entrepreneurship. Sociologists, social psychologists, anthropologists, and organizational theorists have used the social network approach to study the relationship between people and organizations. …