Has networking an effect on subjective and/or objective success of entrepreneurs? Presented at the 14th European Congress of Work and Organisational psychology (EAWOP), May 13-16, 2009, Santiago de Compostella, Spain.

1. University of Bielefeld
Institute for Interdisciplinary Research
on Conflict and Violence
Has networking an effect on subjective
and/or objective success of entrepreneurs?
Andreas Grau1, Dominika Dej2, Cornelia Hering3 & Ute Stephan3
1 Institute for Interdisciplinary Research on Conflict and Violence, University of Bielefeld
2 Institute of Industrial, Organizational, and Social Psychology, Dresden University of Technology
3 Work and Organizational Psychology, Phillips-University Marburg
g y gy, p y g
EAWOP 2009

2. Networking
g
• Networking includes behaviors aimed at building and maintaining informal
relationships, that p
p possess the (p
(potential) benefit to ease work related actions by
) y
voluntarily granting access to resources and by jointly maximizing advantages
of the individuals involved (Wolff & Moser, 2006).
• Building, maintaining, and using relationships (Forret & Dougherty, 2001;
Michael & Yukl, 1990)
• Relationships
– Informal (vs. formal; Michael & Yukl, 1990)
– Cooperative (vs. competitive, Baker, 1994)
– Inside and outside the organisation
– Voluntary exchange of favours (Cohen & Bradford, 1989)
• We focus in this study on the “maintaining contacts” component and on
networking outside the organization
organization.

3. Social competence
p
• Specific competences that facilitate effective interaction with
others (Baron & Markman, 2000).
Markman 2000)
• Social competences are essential to build contacts to foreigners
and maintain these contacts and arrange them in a positive way.

4. Research questions
q
Is networking positively related with subjective and objective
business success?
Is networking in a regression model positively related with
objective business success?
Is networking in a regression model positively related with actual
subjective business success?
Is networking in a regression model positively related with
subjective expected business success in the next 3 years?
Is social competence related to networking and if this is the case
which are the effects of it in the three regression models?

5. Measures
Questionnaire / Self report
Networking (Subskala Maintaining; Forret & Dougherty, 2001)
Dougherty
Social competence (BIP; Hossiep & Paschen, 2003)
Social competence / Rated by Interviewer
Self efficacy (Schwarzer & Jerusalem, 1995)
Personal initiative (Frese et al., 1996)
al
Business success (subjective appraisal)
Actual success
Expected growth
Net income

6. Results I
1 2 3 4 5 6
1. Networking (.71)
2. Social Competence .49** (.83)
3. Self ffi
3 S lf efficacy .23*
23* .39**
39** (.73)
( 73)
4. Personal initiative .24* .33** .53** (.74)
5.
5 Growth next 3 years .32
32** .36
36** .11
11 .16
16 (.77)
( 77)
6. Actual success (subj.) .00 .03 .09 .22* .28** (.71)
7. Net income .39** .20 .05 .08 .20 .25*
Notes: Correlation coefficients ; diagonal: Cronbach’s alpha; **p < .01, *p < .05.

7. Results II (DV: Net income)
( )
Modell 1 Modell 2 Modell 3
1.
1 years of business
f b i -,101 -,130 -,124
2. Sex ,026 ,021 -,008
3.
3 Age ,097
097 ,089
089 ,049
049
4. Education -,158 -,139 -,131
5. Personal initiative ,194
194 ,096
096
6. Self efficacy -,181 -,190
7. Social competence
p ,131
8. Networking ,261*
9. Social comp. (rated-int) ,041
R2 ,04 ,07 ,18
∆R2 ,04 ,03 ,11**
Notes: Standardized beta-coefficients; **p < .01, *p < .05.

8. Results III (DV: actual subj. success)
( j )
Modell 1 Modell 2 Modell 3
1.
1 years of b i
f business -,130 -,169 -,171
2. Sex -,080 -,128 -,131
3.
3 Age ,056
056 ,068
068 ,088
088
4. Education ,005 ,014 ,005
5. Personal initiative ,337
337** ,344
344**
6. Self efficacy -,162 -,168
7.Social competence ,062
8. Networking -,090
9. Social comp. (rated-int) -,040
R2 ,02 ,10 ,11
∆R2 ,02 ,08* ,01
Notes: St d di d b t
N Standardized beta-coefficients; ** < .01, * < .05.
ffi i t **p 01 *p 05

9. Results IV (DV: growth next 3 years)
( g y )
Modell 1 Modell 2 Modell 3
1.
1 years of b i
f business -,380** -,404** -,418**
2. Sex -,040 -,067 -,071
3.
3 Age -,029
029 -,005
005 -,003
003
4. Education ,037 ,043 ,023
5. Personal initiative ,207+ ,105
6. Self efficacy -,002 -,048
7. Social competence ,259*
8. Networking ,156
9. Social comp. (rated-int) ,011
R2 ,16 ,20 ,31
∆R2 ,16** ,04 ,11**
Notes: Standardized beta coefficients; **p < .01, *p < .05, +p < 10
beta-coefficients; p 01 p 05 <.10.

10. Summary
y
• Networking should be accounted for in entrepreneurship research,
especially because of its positive effects on objective business
success (
(e.g. net income)
ti )
• No significant effects of Networking in regression-models on
subjective success (e.g. growth expectency and actual success)
bj ti ( th t d t l )
• Furthermore we found positive mid-size correlations between
networking and social competence and growth expectancy
t ki d i l t d th t
• Social competence has in the regression models only an effect on
expected business success
t db i
• Positive low though significant relations between networking and
self efficac and personal initiati e
efficacy initiative

11. Discussion
• Especially for the relationship between networking and social
competence it is not clear whether networking behavior enhances
p g
social competence or if social competence leads to more (efficient)
networking behavior
• For disentangling causal effects of variables (e.g. social
competence) on networking behavior and the causal effects of
networking behavior on outcome va ab es (e.g. bus ess success)
etwo g be av o o outco e variables business
longitudinal studies are warranted
• Is social competence a Moderator of the relationship between
networking and objective business success?
• Alternative measures for business success
l i f b i

12. Thank you for your
attention!
i !
andreas.grau@uni-bielefeld.de