Academic journal article Journal of Small Business Strategy

Female & Male Entrepreneurs' Perceived Value of Formal Networks: Are There Differences?

Academic journal article Journal of Small Business Strategy

Female & Male Entrepreneurs' Perceived Value of Formal Networks: Are There Differences?

Article excerpt

ABSTRACT

Since entrepreneurs play a crucial role in job creation, and evidence suggests that networks play an important role in both facilitating new businesses and helping existing businesses grow, a strong incentive exists to better understand and support entrepreneurial network development. In this study, we examine the differential values perceived by female and male entrepreneurs of entrepreneurial network organizations (ENOs). Women perceived a higher economic benefit (instrumental value) from the network than men, as well as a higher affective value. There were no significant differences on perceived normative value from ENO's.

Keywords: entrepreneurial network organizations, female entrepreneur, networks, perceived values

INTRODUCTION

Since entrepreneurs play a crucial role in job and wealth creation (e.g., Robb, 1998), and evidence suggests that networks play an important role in both facilitating new businesses and helping existing businesses grow (e.g., Hoang and Antoncic 2003), a strong incentive exists to better understand and support entrepreneurial network development. Researchers from the National Commission on Entrepreneurship (NCOE, 2000) suggest that the existence of entrepreneurial networks is a key to promoting entrepreneurial vitality in a region.

Although critical for all entrepreneurs, networks may play a more important role for stimulating entrepreneurship among women than men. Women entrepreneurs are a rapidly growing sector of entrepreneurship worldwide (Minniti, Arenius, & Langowitz, 2005). In the U.S. alone, women own more than 10 million firms that employed over 13 million people and generated $1.9 trillion in sales in 2008 (Center for Women's Business Research, 2008). Notably, firms owned by women of color grew faster than all privately held firms between 2002 and 2008. According to a recent study sponsored by Intuit (King, Townsend, and Ockels, 2007):

"Over the next decade, women entrepreneurs will continue to grow in number. Demographics will play a part as baby boomer and Gen Y women form increasing numbers of small and personal businesses along with their male counterparts. But across the age cohorts, women looking for better career options and work-life balance will increasingly turn to entrepreneurship to fulfill their goals."

Yet on a worldwide basis, the likelihood of becoming an entrepreneur remains far greater for men than women (Minniti , Arenius, and Langowitz 2005). Some research points to access to financial resources. Data from the Kauffman Firm Survey examining financing sources of high-tech firms found that women raised smaller amounts of financial capital than men did during the start-up stage (Robb & Coleman, 2009). However Lee and Denslow (2005) found that as women-owned businesses grew, they faced less credibility problems with banks than during the early start-up phases.

Given that entrepreneurship is critical to economic growth, and that women appear to represent underutilized potential, it becomes particularly critical for research to reveal the factors that encourage the strategy and growth of women-owned businesses in particular. From economic development, research and educational perspectives, we need to better understand the priorities and values of women as they make the choices to start and grow businesses.

This research explores whether men and women derive separate values from networks, deemed a critical element in an entrepreneurial climate, and attempts to categorize them into clear dimensions that contribute to the ongoing stream of gender-based network research. It also offers practical suggestions to leaders of network organizations to enhance their appeal to female entrepreneurs, thus facilitating entrepreneurial activity among women.

LITERATURE REVIEW

Value of Networks

Several researchers have suggested that networks are of particular value to entrepreneurs, partly due to their need for resource acquisition (e. …

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