Embedded network ties of emerging entrepreneurial firms: Patterns, processes and evolutionary path

Emerging entrepreneurial firms, particularly from the relational view, rely on embedded network ties for resource acquisition. These ties are embedded within social relationships and are generally governed through mechanisms of trust and relational contracting rather than through market governance. Thus, the social relationships of embedded network ties influence both the trust and effective governance of these ties. However, given that previous research has not well specified the characteristics or evolutionary processes of embedded network ties, this study addresses the following three research questions: (1) Patterns: What are the components of embedded network ties? (2) Processes: How are these components related to each other, trust and embeddedness? (3) Paths: What are the different developmental paths to embeddedness and why do they matter strategically?;Theoretically positioned at the confluence of strategic, entrepreneurial and network theory, the research incorporated a qualitative, case study method within a postpositivist and grounded theory methodology. Data collected from eight emerging entrepreneurial firms, selected through theoretical sampling, included semistructured interviews, archival data, and network modeling. The entrepreneurs identified over 300 dyadic network ties, of which 160 had sufficient information to support an initial screening for embeddedness. Data analysis then focused on the 66 ties that were identified as embedded.;Although previous research on embeddedness presumes that embedded network ties represent a fairly unidimensional construct, a clear pattern in the data was the multidimensionality of the social relationships of embedded network ties. Embedded network ties demonstrated a variety of tie characteristics that aggregated into three social components of personal relationship, dyadic interaction and social capital along with three different types of trust. Embedded network ties also demonstrated evolutionary processes through which they developed additional embeddedness and trust. Seven types of embedded relationships and five specific evolutionary paths are proposed based upon these patterns. Fully embedded network ties operated with more types of trust than less embedded relationships. Each type of embedded relationship, then, has strategic implications for trust and effective governance. Thus, the findings contribute theoretical propositions and models that describe and explain the evolution and effective governance of embedded network ties.