The Effects Of Social Network On Small Business Survival And Growth

The theory of social network has become a hot topic in academic research fields since 1990s. In Chinese society characterized by "Guanxi", how social network influences business performance? How to build social network and utilize resources embedded to maximum so as to enhance enterprise performance? The answers to these questions will facilitate to further understanding of mechanism of relationship between social network and enterprise performance. As an important force in China's social economy, the small and medium-sized enterprises. (SMEs) are also facing many problems in survival and growth with theirs rapid development. Resources from social relationships based on network are essential for SMEs to survive and grow. Therefore, the dissertation researches on the survival and development of small business in China in the perspective of social network.The dissertation collects data through various methods like literature, interview, questionnaire and case analysis. The purpose of the study is to make a deep understanding about the mechanism of the effects of social network on small business survival and development, and analyse the whole charateristics of social network established by small businesses under different environment conditions and evolution of social network in the growth of small business. The dissertation on one hand can enrich and improve the existing knowledge of enterprises growth theoretically; on the other hand, the research results have strong practical guiding significance for the understanding of social network evolution during small business survival and growth in China as well. Specifically, research results of the dissertation are as following:First, the dissertation establishes a conceptual model of relationship between social network and small business survival and development. The dissertation presents the conceptual model of the effects of social network on small business survival and growth based on literature reviews about social network and enterprise growth, interviews with enterpreneurs, and sugestions from experts and?scholars. The conceptual model consists of four parts:social network, enterprise performance, environmental factors, and developmental stage of enterprise. Social network mainly includes business ties and political ties. Enterprise performance refers to survival and growth of small business. Environmental factors include institutional environment and industrial environment. Developmental stage of enterprise is difined by period of operation. The dissertation explores moderating roles of situational environment and developmental stage in the relationship between social network and small business survival and development.Second, the dissertation presents a framework to categorize social network of small businesses based on institutional and industrial environment. The empirical results show that:business ties and political ties have the positive effect to the survival and development of small enterprises; the relationship between business ties and small business survival and development is inverted U curve, and the relationship between political ties and small business survival and development is U curve; the institutional environment and the industrial environment have a moderating effect on the relationship between social network and small business survival and development, institutional environment has a negative regulatory role, industry environment has a positive regulatory role. The characteristics of social network established by small businesses should match with their situations, and based on that, the framework categorizing social network of small businesses based on different institutional (degree of completeness) and industrial (degree of uncertainty) environment is presented, that is inside oriented, government oriented, market oriented, and outside oriented.Third, the dissertation builds a conceptual framework about social network evolution of small business development. Based on empirical analysis and case study, the social network shows different characteristics in different stages of enterprise development, the importance of business ties shows a rising trend, and the importance of the political ties falls slightly; the subject of establishing social network shifts from the individual to the organization as a whole; the content of social network shifts from personal relationship to enterprise network; the type of social network shifts from governments oriented to market oriented; the scope and strength of social network shifts from narrow and strong to wide and weak. From the start to mature, the social network of small businesses shows a regular pattern, so the conceptual framework about social network evolution of small businesses is established, and this evolution process on one hand will be affected by different industry environment and institutional environment, on the other hand, the different institutional environment and industry environment also provides necessary external conditions for the construction of small business social network.The dissertation analyses the effects of social network on small business survival and growth, and presents the moderating roles of external environment and developemtal stage played in the relationship between social network and small business developemt. It is very important for small business to identify its external situation and developmental stage while establishing and maintaining social network. Small business should focus on the match between social network and situation, and pay attention to the evolution characterists in different stage. The results of the study have important implications on operation of Chinese enterprises especially for small businesses and provide reference and guidance for small enterprises to establish and use social network resources effectively and effienctly.