This research studies small business networks using the frameworks of both institutional theory and social capital theory to explain formal network formation and strategic network behavior. The objectives are to examine in these emerging business networks: 1) how the network as an institution formalizes and develops components of social capital, 2) why and how cooperative ties develop and endure among members; 3) what type and quantity of resources flow along the ties; and 4) how these ties impact adoption of innovation and organizational change. This interdisciplinary research approach offers an extension of current economic, social, and strategic management theories by examining how cooperative relationships begin and develop among networks of independent business owners, and by expanding the domain of empirical research to groups that have received little attention in the literature - rural, Hispanic, and women-owned businesses.
The project investigators, with a research history in small business management and strategic networking, will partner with network coordinators to conduct analyses of four new networks. Data collection methods will include interviews with small business owners as they initiate collective actions within the network, observation and measurement of interactions taking place in formal network meetings and informal member contact, and examination of archival documents. Change that is episodic, discontinuous, and intentional will be measured within the network organization and within the member firms. Measures of innovation will include the introduction of products, processes, and services. This investigation is particularly well-timed in that networking is a prominent, but newly emerging, organizational form with little existing measurement of the internal structuring and early development of actual networks.
Broader Impacts: What is novel and theoretically interesting about the study of small business networking is that it offers insight as to how cooperation can grow and persist among traditionally non-cooperating firms. Networks, rather than mergers and acquisitions, are said to be a more lucrative way to combine firm strengths in collaborations that facilitate research and new product development. Linking small businesses may provide opportunities encouraging change and initiating innovation. Findings from this project will assist policymakers in their programs to promote small business creation, retention, and expansion. The alliances will facilitate dissemination of research-based information for small businesses. Also, the research will contribute to graduate and undergraduate college courses in rural and community development, social change, and small business management at U Nebraska-Lincoln and Iowa State.
