How Social Networking Affects New Ventures in UAE

International Conference on Technology and Business Management March 26-28, 2012

How Does The Social Networking Affect New Entrepreneurial Ventures In UAE?

Hadeeqa Batool

Shoaib Riaz
Hadeeqa.batool@live.com
Shoaib@szabist.ac.ae

1. Introduction

There is great amount of change and uncertainty in the world of employment, the concept of lifelong employment
has vanished (Fallows and Steven, 2000). Thus, there is a need in every individual to look for a better option.
People are taking interest in self-employment as this ensures them a safer future (Jackson and Vitberg, 1987 cited in
Scott and Twomey, 1988). Thus, in modern era entrepreneurship holds a very strong scope. Word entrepreneurship
can be approached (understood) in many different ways (Wennekers and Thurik, 1999). It is a phenomenon that is
studied in all major disciplines ranging from organizational theory to sociology, mathematics to economics
(Henrekson 2007). The concept of entrepreneurship received a lot of attention and has become very popular in the
modern era (Davidsson and wiklund, 2000; Low, 2001; Shane and Venkataraman, 2000; Venkataraman, 1997).
Thus, regardless of being a new phenomenon, it holds a strong impact on development of individual as well as
economy and nation (Zelealem et al, 2004). Entrepreneurship is a key to innovation (Kirzner, 1973), creativity and
economical stability for nations (Thurik and Wennekers, 2009).

Networking and Entrepreneurship
Networking and communication are considered to be most essential element in entrepreneurial activity (Martin, G.
and Staines, H., 1994). The ability of developing networks rests with the efforts of entrepreneur/owner towards
fulfillment of the strategic vision of reaching global markets. This demands deep commitment and nurturing effort
from the entrepreneur and allows the firm to exploit opportunities of internationalization (Hayes et al., 1996).
Montealegre (2002) believes that building networks are a process that is established overtime. Key to be a successful
entrepreneur in UAE lies in the secret of social networking. UAE government also supports social networking and
has established several channels for entrepreneurs to develop their networks. As being a diverse society, UAE holds
a number of different social networks. Thus, the chances of successful entrepreneurial activity are high here.

Developing social network is an activity of increasing social, personal and business contacts of an entrepreneur.
(Castilla, Hokyu, Granovetter, & Granovetter, 2000). Researchers identified that social network can be physical or
virtual resources. Their main aim of building social structure is to fulfill the needs of entrepreneurs (Gabbay &
Leenders, 1999). Entrepreneurs build these relations by contacting the people they know or by contacting the people
who are known by his contacts (Portes, 1999; Lin, 1999). These network relations in terms of people may include
contacts and links from family (Krackhardt, 1992), friends, colleges and other professional networks. From
organizations point of view, the network may include clusters of organizations/ firms known and other organizations
that can help the entrepreneurial activity to start and function smoothly (Hansen, 1995). Thus, when the
entrepreneurs receive any sort of contributions from these built contracts, these social networks becomes social
capital (Burt, 1992).

2. Background to research problem/ research problem
The major hindrance in economic stability of a nation is economic downturn or recession. It is a time that creates
complications for the people, organizations and the nations. Talking about how entrepreneurship is affected in
UAE‘s market, we see that after the real estate burst, UAE is trying to become entrepreneurial hub and has made
several successful efforts in past namely Dubai Media City, Dubai Internet city etc. thus, entrepreneurship still hold
a very strong future in UAE in upcoming days (Kartik, 2010). Researchers believe that there are a numbers of
difficulties that an entrepreneurial activity may face such as, Lack of Management skills (Martin and Staines, 1994)

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or lack of financial support (Boer, 1992). However, an escape to these short comes can be by developing network
relationships (Dubini and Aldrich, 1991; Coviello and McAuley, 1999; Johannisson and Monsted, 1997).

Entrepreneurship is not an easy task. Entrepreneurs must know the right way of starting/ operating the venture.
There are a huge number of small businesses those faced difficulties and fail in their initial years of operations
(Watson and Everett, 1996; Ladzani and van Vuuren, 2002). To start a business, entrepreneurs require not only the
competency, idea and knowledge but also the support to deliver the goods and services (Teece, 1987). They receive
this support by establishing social networks. These networks are the links with people and other firms that help the
organization in expanding the resource base and to sustain the new entrepreneurial activity (Hansen, 1995). This
network becomes social capital for entrepreneurs (Burt, 1992). Social network can be further divided into two
categories i.e. fundamental and secondary network. Fundamental network includes people and organizations that
entrepreneur know before starting entrepreneurial activity and secondary networks are the contacts that entrepreneur
develops while the business grows and these networks help him in exploiting the market (Jay, W. & Gillian Mort,
2006).

Network differs with geography, level of contact and the depth of relationship. Entrepreneurs staring up a new
business are most likely to belong from a family of entrepreneur (Rosenblatt, et al., 1985). Majorly, the new
entrepreneurs starting business are sons of a successful business man. Thus, this way, the family will influence the
network development as the new entrepreneur will have already guidance and pool of experience from his family
(Dyer & Handler, 1994; Rosenblatt, et al., 1985; Aldrich, Reese, & Dubini, 1990). Whereas, some researches
notified that this dependence can result in entrepreneur losing out on other contacts as he might not feel the need to
enhance the network and exploit resources. Thus, the new entrepreneur should maintain a balance between the
family contacts and the other contacts in such a way that his network does not get limited (Birley, 1985; Renzulli, et
al2000).

3. Problem Definition
How social networking can help the entrepreneurs in starting a new business in UAE?

Research Question:
What is the link between developing social networks and starting new ventures?
What can entrepreneur focus on to develop better social network?

Research Objectives:
To understand the importance of social networking in starting new entrepreneurial activity.
To explore the effective way in which an entrepreneur can develop effective social capital.

4. Literature Review

This section will help to identify the relevant studies conducted on the topic of social networking and entrepreneurs.

Entrepreneurs are of two kinds, one who work on networks for development of their entrepreneurial activity are
known as network entrepreneur and the others are entrepreneurs who work in isolation and does not require
networks, such entrepreneurs are called solo entrepreneurs. Researchers argued that entrepreneurs those utilize their
social network highly more successful than those who work in isolation (solo entrepreneurs) (Hills, Lumpkin, and
Singh; 1997). The study of entrepreneurship greatly emphasizes on importance of building social networks as it
helps the entrepreneur in different phases of business establishment and plays a very crucial role in development of
business (Borch, 1994; Hansen,1995; Kaufmann et al., 2003; Larson & Starr, 1993; Reynolds, 1991; Starr &
MacMillan, 1990).

Johannisson (1990) believes that developing social contacts is the most significant and important resource for an
entrepreneur. Social capital of entrepreneurs is divided into personal contacts and professional contacts. Personal
contacts will include family members and friends. Professional contacts will include official contacts, colleagues
and business people that may come into contact because of the entrepreneurial activity. Social networking has
importance for entrepreneurs in many ways.

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Furthermore, according to Wilken‘s (1979) three phase model of entrepreneurship, networking and social contacts
holds importance and help entrepreneur in every phase of entrepreneurial activity. Motivation is the first phase; it
constitutes the initial phase when the entrepreneur is planning to start the venture. Second phase is planning, this is
the phase in which the entrepreneur knows what he wants to do and is further gathering information and resources to
set up the venture (Carter, Gartner, & Reynolds, 1996). The third phase is known as establishment, this is the phase
when the venture is running and entrepreneur‘s aim is to keep it going smoothly and further development of
business. This phase concept was also supported by Katz &Gartner (1988). Moreover, Chu (1996) believes that
every phase of entrepreneurship will demand different extent and level of networking behavior.

Entrepreneurs who lack social circles and doesn‘t have a good network may feel that the business is not compatible
with their expertise and thus may dropout from the venture or face a huge number of difficulties (Hamilton, 2000).
Thus, networks are important in order to have smoother and profitable relations between the parties namely,
entrepreneurs, suppliers, customers, investor and creditors etc.

Idea Generation

During the first phase of entrepreneurial activity, the entrepreneur requires idea and shares his thoughts with close
social network. This can include family and close friends as entrepreneur might not want to make their initial ideas
public (Salancik & Pfeffer, 1978; Staw & Ross, 1987). Developing contacts and special network is important for an
entrepreneur as it serves as main source of idea generation for new enterprise (Birley, 1985; Christensen & Peterson,
1990) believes that establishing.

Network can be beneficial in providing entrepreneurs with source of useful information (Aldrich and Zimmer,
1986). Okkonen and Suhonen (2010) recognize that one of the most important positive impacts of social networking
for an entrepreneur is the ease of information sharing and exchange of ideas. Thus, entrepreneurs have benefit of
exploring (knowing) relevant business experiences and information from its contacts and this information can be
helpful for the future of the entrepreneur (Blau, 1977; Burt, 1992; Granovetter, 1973).

Hypothesis 1:

There is a positive correlation between the availability of social network and the idea generation.

Increased Efficiency of Business Operations

As entrepreneurs face a huge number of problems and hardship in terms of financing, technical and managerial
expertise especially during the startup phase, social contacts help an entrepreneur in overcoming these problems to a
sufficient extent (Raijman and Tienda, 2000).

Most of the small and medium firms fail due to unavailability of sufficient credit and financing facilities.
Entrepreneurs can utilize their social contacts to achieve easy credit and financing facilities (Fredland and Morris,
1976; Peterson and Shulman, 1987). In certain economies, getting licensing and meeting other legal formalities is
also a difficult task for new entrepreneurs (Djankov et al. 2002). Thus, personal contacts can also help in such case.
Furthermore, contact relations can be diversify such as they may help in attaining investors, reaching suppliers,
vendors and customers or they can be supplier/distributor of an entrepreneur‘s products or services (Hansen, 1995).
For example, an entrepreneur starting venture of producing sports goods can be fortunate enough to know someone
who is already in business of supplying raw material of sports goods. Thus, entrepreneur can get benefit from
contact i.e. he already knows the supplier. Moreover, in such cases, the new venture will be beneficial for both the
parties as the entrepreneur‘s business is using supplies from supplier that is already known to entrepreneur, and the
person in supply business will get benefit of increased customer base.
Thus, networks are important as they help the entrepreneurs in increasing efficiency of business operations. For
example, in production process, the assembly of resources can be performed smoothly with help of effective
contacts. Networks are beneficial in reducing the transaction cost (Mark et al., 1995). Also contacts are important as
they facilitate the entrepreneurs in provision of necessary resources (Aldrich and Zimmer, 1986). These resources
can be monetary and non monetary. Mostly entrepreneurs rely on their family for provision of necessary resources
(Krackhardt, 1992). For provision of information, generation of capital and for necessary guidance, entrepreneurs
rely on their social network and they keep on expanding their networks for future support (Burt, 1992).

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Hypothesis 2:

There is a positive correlation between availability of social network and the increased efficiency of business
operations

Availability of appropriate HR

Entrepreneurs starting a new venture may not find it feasible to hire and train employees using traditional and high
cost sources (Robert and Shane, 2008). The reason behind this is that at the start of new venture, entrepreneurs have
limited resources and the entrepreneur cannot afford to make a bad decision as the venture‘s success demands
effective utilization of resources (Venkatraman, 1997). And out of all resources possessed by an organization,
human resources (people) are the most important factor that can act as competitive advantage for the enterprise
(Dechawatanapaisal, 2005; Saru, 2007).
Finding both talented and trustworthy employees is a difficult task for new entrepreneurs without help from reliable
network contacts (Amir N. & Siegel, 2006). Entrepreneurs utilize their network and contacts for hiring employees
(Shane & Foo, 1999). This hiring can include people who are already known to the entrepreneurs (friends,
colleagues, family members) or it may include recommendations from contacts (Hendricks, 1998). Hiring people
that you already know is beneficial for the entrepreneur in many ways such as this hiring method will be cost
effective, quick, these individuals will be easy to handle and convince (Robert and Shane, 2008).
Furthermore, researchers believe that new organizations often lack employee commitment and dedication
(Stinchcombe, 1965) and such problems can be overcome when you are employing the people you know already (or
the people who are referred by your contacts).

Hypothesis 3:

There is a positive correlation between availability of social network and proper workforce

Global presence and operations

In the recent times, entrepreneurs take advantage of globalization. Studies have shown that during the startup phase
of global entry, entrepreneurs greatly rely on their personal contacts Robert D. Hisrich (2010). And only the physical
resources will not help internationalization process of entrepreneurship (Glückler. J., 2006). Researchers believe that
in the third phase of entrepreneurship, the establishment phase entrepreneurs try and expand their network to
increase the growth (Wilken‘s, 1979; Katz & Gartner, 1988). This expansion is mostly outside one country.
The entrepreneurs expand their business to global markets to get the hidden advantages and benefits of foreign
countries (Robert D. Hisrich, 2010; Amy Bax, (n.d)), These benefits could be low cost of operating, labor and raw
materials etc. foreign markets also offer entrepreneurs other motivation such as exploiting the global world,
increasing their presence and thus global presence acts as competitive advantage for the venture.
Entrepreneurs may achieve globalization of production by having raw materials from one source, assembly and
manufacturing from other source. This concept will benefit as it is cost effective. Furthermore, entrepreneurs can
also enjoy boundary less markets by using their contacts in other countries to increase their market. This concept is
also known as globalization of markets. For example, a huge number of entrepreneurs in UAE have expanded their
businesses to Canada, Japan etc by utilizing their personal and professional contacts.

Amy Bax (n.d) believes that it is only because of the technology (internet) that social networking and contacts can
be expanded across borders. Now entrepreneurs can increase their social contacts and links by utilizing the faster
way of communication which is social networking sites and portals. Most prominent ones are facebook, Myspace,
Linkdin, twitter etc. keeping in mind this endless advantage of technology, entrepreneurs may utilize this resource to
expand their businesses in potential markets globally.
Hypothesis 4:

There is a positive correlation between availability of social network and global presence of firm.

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Moral Support/Emotional support and Feedback

Social capital of an entrepreneur can be helpful in several ways predominantly the following four ways (Brüderl &
Preisendörfer, 1998: Powell & Smith-Doerr, 1994):

1. Social capital work as emotional capital and support the entrepreneurs morally and emotionally through the
tough and critical times of venture.
2. Helps in gaining valuable information that is beneficial for the future of entrepreneurial activity.
3. It serves as the best and easiest way of gaining suppliers and customers.
4. It also opens easy ways and access to financial resources and physical resources those are required by the
entrepreneurs during the startup phase.

Researchers believe that the first years of an enterprise life requires the most emotional/moral support for the
entrepreneur (Hugo et al., 2005). Before the starting of enterprise, the entrepreneur requires someone to share his
business idea and concerns with. Thus, researchers argued that entrepreneurs use their close social network like
family and friends to share his ideas and these social contacts will motivate him and provide him moral support
(Salancik & Pfeffer, 1978; Staw & Ross, 1987). Furthermore, the social network mainly the close friends and
family will also motivate the entrepreneur.

Social circle of an entrepreneur supports him emotionally and this in turn helps in boosting entrepreneurs self
confidence and thus he feels more comfortable and confident (Foxall, 1997; Johannisson, 1986, 1995). Male and
female entrepreneurs may perceive the moral and emotional support executed by their social network in different
ways as there exist gender differences which leads to role and perception differences. Self employed females not
only take the challenge of being an entrepreneur but also holds a set of family responsibilities. Thus, female‘s
entrepreneurs require more of moral support from family (Mistick, 1998; Rouse and Kitching, 2004). Moral and
emotional support executed by the network is not only beneficial for female entrepreneurs but also important for
male entrepreneurs.

Literature mentions that entrepreneurs who receive emotional support from their family and friends are highly
expected to execute successful businesses than those entrepreneurs who lack emotional support and works in
isolation (Brüderl & Preisendörfer, 1998). Thus, the support of social capital has a positive influence on
entrepreneur as well as the venture. Researchers argue that social circles provide moral support and advice to
entrepreneurs not only in the startup phase but throughout the journey of the venture (Birley, 1985; Greve, 1995).
According to Kamm & Nurick, (1993), entrepreneurs hold an emotional bond with their networks. Goffee and Scase
(1989) added that this emotional bond is more strong form the family side of the entrepreneur. Thus, entrepreneur‘s
social network helps him to deal with the good and difficult situations throughout the journey.

Hypothesis 5:

There is a positive correlation between availability of social network and moral support, Feedback.

5. Research Methodology

This section of the report presents the method used for conducting the research. It also highlights the research
design, data collection methods used, target population, the questionnaire development and the analysis of data.

Research Design
The main aim of this research was to indentify how social networks can help the entrepreneurs of UAE. Thus, the
research is general and anyone can get benefit from the results generated by the research; therefore it was a basic
research. As the idea of conducting this research was to know the power of efficient social networks and to help the
entrepreneurs, therefore this research was descriptive and co relational in nature. The research was descriptive as the
profiles of respondents was developed and was analyzed by means of descriptive statistics. The research can also be
characterized as co relational research because positive or negative correlation between variables and social
networking were examined.

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Data Collection Method

Questionnaire is the easy method of capturing human related information (Robson 1993). The research was based on
primary data collection approach i.e. data was collected first hand. Thus, surveys using self-report close-ended
questionnaires were conducted. Close ended questions were used as the coding was easier and lesser number of
problems and errors were expected while conducting the data analysis. This questionnaire was distributed using
personal contacts among the SME entrepreneurs in UAE.
In this research, the questionnaire was self-administered and had been answered by the respondents as per their
convenience and collected by the researcher accordingly. The questionnaires were distributed via emails, personal
visits (face to face meeting with entrepreneurs by taking prior appointments) to the respondents. Respondents were
assured that their responses were kept private and were analyzed at the aggregate level only.
The questionnaire (survey instrument) in this research was based on the Likert-style rating scale. Mutually exclusive
rating scale was used i.e. users are given Statements and options to express their views. The options were like
strongly agree, agree, neutral, disagree, and strongly disagree. These descriptors are chosen to neutralize any
tendency to over-report difficult conditions and to avoid confusion. This method was intended to ask respondents on
either they do, do not agree or sometimes agree to a given statement. The series of statements in the questionnaire
were maintained in the same order of response in order to avoid confusion (Kervin, 1992) i.e. in the section of
dependent variables, every variable was assigned 3-6 questions. These questions were regarding the idea generation,
next set of questions were regarding the increased efficiency of operations and so on. Negatively and positively
worded statements were included interchangeably to ensure that respondent reads through the each statement
carefully and does not tick the each answer in the same way.

Questionnaire Development

The pattern of questionnaire is important to ensure maximum response and user understanding (De Vaus, 1991). The
questionnaire consists of eight pages. The first page describes brief about the research. The purpose of presenting the
brief is to address questions that might come in respondent‘s mind. And also it ensures the high rate of response
(Dillman, 1978). From second page starts the section 1. This section is consisting of six questions on demographic
information such as gender, age, nationality etc. The purpose of adding such questions is to get maximum
knowledge about the respondents and this helps the researcher in understanding the level of respondents.

From page number four to seven is the section 2. In this section, questions are based on the five ways how social
networking affects entrepreneurial ventures in UAE i.e. Idea generation, increased efficiency of operations,
Availability of human resources, Global presence and operations, Moral/ Emotional support and feedback. There are
4-5 questions asked regarding each variables. Thus, there are twenty one questions in section 2.

The last section of questionnaire is section 3. It starts from seventh page and ends at page nine of the questionnaire.
There are ten questions in section 3. These questions are based on the dependent variable i.e. importance of social
networks. The design of the questionnaire is appended in Appendix B

The Pre-Testing Of The Questionnaire

Pilot study was conducted to ensure the validity of the questionnaire. 10 conveniently selected entrepreneurs were
asked to fill in the questionnaire. The aim of conducting this activity was to identify any major ambiguity or flaw
that might exist in the questionnaire. Also the questionnaire was sent to the advisor of thesis so that he can check if
any changes are needed.

Target Population and Sampling

Sampling is the process of selecting a proportion from the population. It is used to firm a basis of drawing
conclusions and generalizing results for the whole population. Mentioned below are the sampling technique and
target population used for this research:

Identifying target population and population frame

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Target population includes the group of population that is appropriate for research purpose. The target population for
this research was entrepreneurs and business owners operating in Dubai/UAE.

Step2. Sampling

Keeping in mind the sampling frame, convenient sampling was done. Non-probability convenient and snowball
sampling was used. The respondents were selected based on contacts and links conveniently i.e. I contacted all
entrepreneurs in my network and asked them to fill the questionnaire and whoever agreed to provide information
was provided with questionnaire. Also the respondents were asked to refer any of other entrepreneurs that they may
know. Thus it was snow ball sampling as well. The sample size for our research was 103 respondents.

Step3. The process

Questionnaires were sent via email and also distributed manually to all the respondents and respondents were
requested to send back the soft copy/ submit filled questionnaire.

3.5 Data Analysis
Once all the questionnaires were filled, the data was analyzed using statistical tests. Statistical tests are done to
prove the correlation between different variables and affect of one variable to other variable. This statistical analysis
was done using SPSS software that is commonly known as statistical package for social sciences.

3.5.1 Reliability Analysis
Reliability analysis deals with the extent to which measurements are repeated when different persons make the
measurements on different occasions. Reliability is determined by a statistical test called cronbach alpha. Cronbach
alpha determines the reliability based on internal consistency. In this test, measures were considered reliable if the
Chronbach‘s coefficient alpha is 0.6 or greater. The value of Chronbach's alpha is mentioned shown separately for
each variable.

3.5.2 Validity Analysis
Validity analysis is to check whether the information is perfectly represented and represented the way it actually was
needed to be represented. There are many types of validity analysis and in this research the following methods are
used.

Content validity---content validity cannot be determined numerically. It is determined subjectively by the researcher.
In this study, the content validity is checked by conducting a thorough review of literature available about the
importance of social networking for entrepreneurs. Furthermore, the original questionnaire was submitted to the
research supervisor for review and necessary changes were made based upon supervisor‘s guidance. Also a pilot
study was conducted before starting the actual research.

6. Data Analysis
Introduction

This chapter is divided into three sections. The first section explains the general information and characteristics of
respondents. In the second section a report is created on the data which is been collected for this study and the last
section explains in detail the major outcomes of the research conducted. Furthermore, the results of analysis will
also be explained.

Analysis of Respondent’s Characteristics

This analysis is done in order to have a clear view about the background of the respondents involved in this study.
The demographic characteristics of respondents involved in the study were (a) gender (b) age (c) marital status (d)
nationality (e) education (f) monthly revenue. (The detailed results of the demographic characteristics of the
respondents are given in Appendix C)

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The data that was collected for the analysis was further explained by the description of respondent‘s characteristics
using statistical tools such as percentage and frequency. The data collected with the help of questionnaires was
analyzed and evaluated with the help of statistics software named as Statistical Package for Social Sciences
commonly known as SPSS.

4.2.1 Demographics:

1. Gender Analysis:

Out of the 103 responses analyzed; 74 respondents that constituted 71.8% of the total responses analyzed were
males, and the remaining 29 respondents that constituted 28.2% were females.

2. Age Analysis:

Out of 103 respondents analyzed, 1 which constitutes 1% is below 20, 14 respondents which constitutes 13.6% are
between 20 to 25 years, 15 respondents which constitutes 14.6% are between 26 to 30 years, 18 respondents which
constitutes 17.5% are between 31 to 35, 22 respondents which constitutes 21.4% are between 36 to 40 years and 33
respondents which constitutes 32% are above 40 years of age.

3. Marital Status Analysis:

Out of 103 respondents, 26 respondents which constitute 25.2% are single and 77 respondents which constitute
74.8% are married.

4. Nationality Analysis:

Out of 103 respondents analyzed, 8 which constitutes 7.8% were UAE national, 22 which constitute 21.4% were
Arab except UAE national, 20 respondents which constitutes 19.4% were Indian, 47 respondents which constitutes
45.6% were Pakistanis and 6 respondents which constitutes 5.8% were others.

5. Education Analysis:

Out of 103 respondents analyzed, 1 which constitute 1% were Doctorate, 31 which constitutes 30.1% were Masters,
47 which constitutes 45.6% were Bachelors degree holders, 22 which constitutes 21.4% were Diploma holders and 2
which constitutes 1.9% were certificate holders.

6. Monthly Revenue Analysis:

Out of 103 respondents analyzed, 11 which constitute 10.7% were less than AED 10,000. 17 respondents which
constitute 16.5% of the total were between AED 10,000 to AED 20,000. 24 respondents which constitute 23.3%
were between AED 20,001 to AED 30,000. 20 respondents which constitute 19.4% were Between AED 30,001 to
AED 40,000. 21 respondents which constitute 20.4% were Between AED 40,001 to AED 50,000, and 10
respondents which constitutes 9.7% were above AED 50,000.

Reliability Analysis

Reliability analysis is conducted in order to know whether the questionnaire which was developed was appropriate
or not for doing analysis. Reliability statistics is done to know whether no ambiguity was there, to know if the
questionnaire was distributed to appropriate respondents, the schematic diagram which shows the dependent and
independent variable was perfectly designed. Moreover it also helps us to know whether the research model is
perfect.

To do the reliability analysis, Cronbach's alpha is used for determining reliability based on internal consistency. If
Cronbach‘s alpha is 0.6 or greater, then it is said that the measures which was taken in this study are reliable.

Properties and Measuring Instruments

For reliability analysis, all the dependent variables were analyzed by using Chronbach's alpha coefficient.

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Reliability of Idea Generation:

The data regarding Idea generation is found reliable as the value of cronbach‘s alpha is greater than 0.6

Reliability of Increased efficiency of operations

The data regarding increased efficiency of operations is reliable as the value of cronbach alpha is greater than 0.6

Reliability of Availability of Proper HR

The data regarding availability of proper HR is found reliable as the value of cronbach alpha is greater than 0.

Reliability of Global presence and operations

The data regarding global presence and operations is reliable as the value of cronbach alpha is greater than 0.6

Reliability of Moral support and Feedback

The data regarding moral support and feedback is reliable as the value of cronbach alpha is greater than 0.6

Correlation Between The Factors:

Correlation is basically done to determine whether there is a relation between dependent and independent variable
and to check whether the relation is accurate or not. Before correlating each variable it is very important that each
dependent and independent variable should be converted into singular form.

The correlation analysis of this research shows that three variables possess correlation with the independent variable
namely, Increased efficiency of business operations, Global presence, Moral support and feedback. However, as the
coefficient of correlation is not high, positive correlation exists but it is not significant. Furthermore, the level of
confidence on each variable was also examined.

There is no correlation between idea generation and social networking for an entrepreneur. The second variable,
increased efficiency of business operation has positive correlation and the confidence level is 97.5%. The third
variable, Availability of proper HR has no correlation with independent variable. Global presence is positively
correlated with independent variable and the confidence level is 98.5%. The last variable, moral support and
feedback is also positively correlated with independent variable and the confidence level is 99.7

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Correlation Matrix:

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Summary of results:

Hypothesis Relationship Status

Hypothesis 1 No Correlation Hypothesis Not Accepted

Hypothesis 2 Positive Correlation not very strong Hypothesis Accepted

Hypothesis 3 No Correlation Hypothesis Not Accepted

Hypothesis 4 Positive correlation not very strong Hypothesis Accepted

Hypothesis 5 Positive correlation not very strong Hypothesis Accepted

Hypothesis 1: There is a positive correlation between the availability of social network and the idea
generation.
Based on the analysis of data, there is no correlation. Thus, hypothesis rejected.

Hypothesis 2: There is a positive correlation between availability of social network and the increased
efficiency of business operations.
Based on the analysis of data, there is positive correlation and confidence level is high. Thus, hypothesis accepted.

Hypothesis 3: There is a positive correlation between availability of social network and proper workforce.
Based on the analysis of data, there is no correlation. Thus, hypothesis rejected.

Hypothesis 4: There is a positive correlation between availability of social network and global presence and
operations of firm.
Based on the analysis of data, there is positive correlation and significance level is high. Thus, hypothesis accepted.
Hypothesis 5: There is a positive correlation between availability of social network and moral support,
Feedback.
Based on the analysis of data, there is positive correlation and confidence level is high. Thus, hypothesis accepted.

7. Summary Suggestions and Conclusion
Limitations and suggestions

The limitations involved in this study affected the outcomes. First of all, the nature of research and the area
―entrepreneurship and UAE‖ was itself very wide and new area of research. The focus of study was entrepreneurs
that own SME business and there is no appropriate place where researchers can reach all of the entrepreneurs. Thus,
getting large number of respondents was not an easy task. I tried my best to approach as many as I can, however, the
sample size was not large enough thus, the variables does not display very strong coefficient of correlation. Another
reason to this limitation was the limited time available to complete the study.

Furthermore, another limitation could be that the questionnaire developed for this research was reviewed only by the
supervisor and not by peer group. Thus, if peer group was available, the flaws in the questionnaire could have been
recognized and removed accordingly.

Conclusion and suggestions for future researchers

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Entrepreneurship is the heart of business studies. It is a growing field and given sufficient attention, it can serve as
mile stone in development of individuals as well as nations. In UAE, the government is now working towards
improvements and is appreciating entrepreneurs to start ventures. However, considering UAE is a culturally and
nationality wise diverse society, the government should introduce flexibility and should also support non local
population as well. This will be beneficial for UAE‘s future and will polish the image of UAE in the world.

The social network of an entrepreneur can help him in overcoming the problems and issues of business. Thus,
entrepreneurs should try to achieve maximum benefits out of their social circle, family and friends. The result of
this study showed that 3 variables are accepted. This means that the entrepreneur‘s social network can actually
benefit them in terms of Moral support and feedback, increasing efficiency of business operations and increasing
their business to the global markets and getting the benefits of global markets.

Furthermore, for future study on this topic, I would like to suggest the researchers that in order to achieve higher
validity, the questionnaire development and peer group review should be given prime importance. The sample size
should be increased so that better results are generated. Another direction for future research is that social network
of entrepreneurs can impact the entrepreneurs in many other different ways as well for example, Buzz marketing
(word of mouth), beating competition with strong social networks, cost advantages with social ties, awareness of
market, reliable and safer business.

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Appendix: A Conceptual Framework & Schematic Diagram

Idea Generation

Increased Efficiency of
Operations
Social Network of an Availability of Proper HR]
Entrepreneur
Global Presence and
Operations
Independent Variable
Moral/Emotional support
and feedback

Dependent Variable

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How Social Networking Affects New Ventures in UAE

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