Study On The Entrepreneur’s Social Network, Trust And Control

Financing is the key for the development of an enterprise, especially for the SMEswhich are rapidly growing. However, nowadays our SMEs have more difficulties ingetting debt financing, which makes them have to rely on equity financing. And ourlaws explicitly bans "stock with different rights", equity financing inevitably leads to adecline in founder entrepreneurs’ control of the enterprise. Enterprises have to makedifficult trade-offs between "control" and " enterprise financing demand". In reality, italso exists the phenomenon of many founder entrepreneurs "out" of enterprises afterthey register the enterprises in the investment institutions.Then, is there a way to strengthen enterprise founder entrepreneurs’ control of theenterprise outside the scope of the equity structure and capital structure, which canmake it safer to get financing for the enterprise development, this question became thestarting point of this study.Resource dependence theory is one of the most important sociology oforganization study theory. Resource dependence theory shows that view: anyorganization can not hold all resources of their survival and development, theorganization required a lot of resources exist in the external environment; Groupmembers are not innate loyal to the organization, the purpose of the organizationmembers to join the organization is to gain interests; The members in the organizationplay the game for their interests, the game ability depends on the possibility of bringingscarce resources and liquidity for organization, those who can help organizations toobtain scarce resources organization members will gain bigger voice in the organization,namely the condition of resource dependence determines the rights allocation issueswithin the organization.Entrepreneur human capital is an important resource that keeps the corecompetitiveness of enterprises. Entrepreneurs’ social network is of great significance toenterprise’s survival and development. Is there affinities between the entrepreneurhuman capital, entrepreneurs’ social network and entrepreneurs ownership and controlof social resources and control right of entrepreneurs, could they enhance theentrepreneurs’ control?In addition, entrepreneurs and shareholder is the relationship between principal and agent, for legal authority, the entrepreneurs’ control of the enterprise comes from theshareholders authorized. Trust plays an important role in saving the transaction cost, thedifference in the level of trust determines the strategies adopted by the actors. So, willshareholders’ trust for entrepreneurs have an influence on entrepreneurs’ control of theenterprise?In conclusion, this paper tries to make the following: first, from the perspective ofresource dependence analyze and demonstrate the association of entrepreneur humancapital, entrepreneurs’ social network and entrepreneurs ownership and control of socialresources; secondly, from the perspective of trust analyze and demonstrate the influenceof shareholder’s level of trust for entrepreneurs on entrepreneurs’ control.This paper, which is based on the perspective of capital dependence and trust, hasobtained the conclusion of some theoretical and practical significance in researching theentrepreneur human capital, entrepreneurs’ social network, social resources ofentrepreneurs, entrepreneurs shareholders trust for entrepreneurs beyond the perspectiveof ownership structure and capital structure with the method of theoretical derivationand case support.The main conclusions are as follows:(1) Entrepreneur’s human capital, including entrepreneurship, the business abilityof entrepreneurs, entrepreneurs have the knowledge and skills related to the enterprisebusiness activities, such as entrepreneur’s personal reputation, as the important resourceof enterprise survival and development. It is of great significance to enterprise’s survivaland development, which can improve the ability of entrepreneur game with othermembers of the organization as well as enhance the entrepreneur’s control of theenterprise.(2) Entrepreneurs’ social network can increase the possibility for enterprise toobtain the required resources and liquidity, thus it contributes to the voice ofentrepreneurs in the enterprise, add the game chips of entrepreneurs and other membersof the enterprise and actually increases the entrepreneurs’ control of the enterprise.Entrepreneurs’ social network helps companies get embedded in the entrepreneurs’social network structural resources, as well as access to social network members’support, finally enhancing the entrepreneur for the control of the enterprise.(3) If the social resources directly owned or controlled by entrepreneurs is exactlythe important resource of enterprise’ survival and development, the entrepreneurs’ socialresources will inevitably increase the entrepreneur’s influence and control of the enterprise, enhancing the entrepreneur of control of the enterprise.(4) On the one hand, entrepreneur trusting shareholders can reduce the"intervention" of shareholders, increasing "decentralization" for entrepreneurs. Themore entrepreneur shareholders trust entrepreneurs, the more powerfully entrepreneurcan control the enterprise. On the other hand, If entrepreneurs can gain more trust ofshareholders, entrepreneurs trust the higher the breadth of the shareholders, then he isable to obtain more support from shareholders, so entrepreneur’s control of theenterprise is also more stable.