THE IMPACT OF SOCIALMEDIA ON ENTREPRENEURIAL NETWORKS

RESEARCH PROPOSAL

Candidate's name: Debashish Mandal.

Email: dm110@students.waikato.ac.nz

Chief supervisor: Prof. Bob McQueen

Panel: Prof. Kay Weaver, Dr. Stuart Dillion, Dr. Karyn Rastrick

Working title of the research:

THE IMPACT OF SOCIAL MEDIA ON ENTREPRENEURIAL
NETWORKS

Presented on: 29th March 2011

Copyright University of Waikato

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Table of Contents

List of Figures...................................................................................................................... iv
List of Tables ....................................................................................................................... iv
1 Introduction................................................................................................................... 1
2 Research Questions ....................................................................................................... 3
3 Justification for this research ......................................................................................... 4
3.1 Importance and appropriateness of this research ..................................................... 4
3.2 Easy accessibility to prospective data sources ......................................................... 5
3.3 Publishing of the research ....................................................................................... 5
3.4 Benefits of this research .......................................................................................... 5
4 Literature Review.......................................................................................................... 7
4.1 Key articles used in the literature review ................................................................. 7
4.2 Definitions and key terms in social media ............................................................. 10
4.2.1 Web 2.0 ......................................................................................................... 10
4.2.2 Social media .................................................................................................. 11
4.2.3 Social Commerce........................................................................................... 11
4.2.4 Facebook Commerce ..................................................................................... 12
4.3 Adoption of social media by businesses ................................................................ 14
4.4 Adoption and motivation of micro blogging by businesses.................................... 15
4.5 Adoption of application similar to facebook in organisational settings .................. 17
4.6 Conceptual framework based on Unified Theory of Acceptance and Use of
Technology (UTAUT) .................................................................................................... 20
4.7 Entrepreneurs – Role of links actors and ties in social networks ............................ 25
4.8 Contrary position on weak versus strong ties......................................................... 27
4.9 Literature gap ....................................................................................................... 31
5 Research Design.......................................................................................................... 33
5.1 Identification and Justification of Research Methodology ..................................... 33
5.1.1 Qualitative strategy ........................................................................................ 33
5.1.2 Action Research............................................................................................. 35
5.1.3 Paradigm position of the research .................................................................. 37
5.2 Data Collection methods ....................................................................................... 40
5.2.1 Sample interview questions............................................................................ 41

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5.2.2 Variables for the investigation ....................................................................... 42
5.3 Identification of subjects and resources ................................................................. 43
5.4 Data analysis methods and tools to be used ........................................................... 46
6 Time table ................................................................................................................... 48
7 Failure Factors ............................................................................................................ 49
8 Expected chapter outlines ............................................................................................ 50
9 Ethical consideration and approval .............................................................................. 51
10 References .................................................................................................................. 52
Appendix A Modified and Extended Version of UTAUT .................................................... 58
Appendix B Transcript of a sample discussion on Facebook business Page ......................... 59
Appendix C Transcript conversations on dedicated groups on Linked-In............................. 60
Appendix D Sample Interview questions............................................................................. 66
Appendix E Format of Introductory email sent to prospective participants .......................... 69

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List of Figures
Figure 1 Entrepreneur and network ties (Jack, 2005 P.1252) ............................................... 28
Figure 2 Conceptualizing network development Slotte-Kock & Coviello, (2010) ................ 30

List of Tables
Table 1: Articles related to Social Media (Arranged in level of importance to the
investigation) ........................................................................................................................ 9
Table 2: Articles related to entrepreneur networks (Arranged in level of importance to our
research) ............................................................................................................................... 9
Table 3: Conceptual comparative framework modelled from three similar studies and one
facebook like application .................................................................................................... 23
Table 4: Justification of selection of research approach and methodology (Adapted from Yin
2007) .................................................................................................................................. 36
Table 5: Paradigm Position of the research (Adapted from Perry & Rao in Hine & Carson
2007) .................................................................................................................................. 39
Table 6 Milestone and time frame ....................................................................................... 48

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1 Introduction
The primary purpose of this research is to examine the process of adoption of social media in
small businesses and investigate the impact it has on the business network of the
owner/entrepreneur. The intended output of the investigation is to construct a robust social
media adoption model specifically designed for small business. The model will be designed
in a manner which will be helpful for practitioners and academics alike. The literature is
fragmented and skewed on acceptance and adoption of social media application such as
facebook in an organisational setting especially for small businesses and entrepreneurs. The
adoption process of social media has been examined by Günther et al., (2009) and others
using the Unified Theory of Acceptance and Use of Technology (UTAUT) framework. They
identified several new constructs such as reputation and primarily privacy as a major concern
for adoption of social media by businesses. DiMicco et al., (2008) and others have studied
motivations and purpose for use of facebook like application by technology companies. They
have identified the constructs of caring, climbing and campaigning while maintaining
connection with weak ties being the primary reason to use the application. Granovetter,
(1973) and Burt, (2004) have identified the importance of weak ties and the requirement of
diverse and varied ties in the network of small business owners to gather resources and
information for their businesses. The second interest of this research is to identify how social
media can help small businesses to spread out and gather a diverse and large range of weak
ties to be activated when required. Based on this intention in the next section I have framed
my research question to be investigated by adopting the action research strategy by
constructing facebook pages for select local businesses and then observing the adoption
process and changes occurring to the entrepreneurial network and to the overall business.

In section 3 the justification for this research is discussed to provide an instant preview of the
benefit, feasibility and appropriateness of this research. In later section literature review
details the adoption process of micro blogging and facebook like application before
proposing a conceptual framework identifying the major constructs from various studies to be
adapted refined and enriched by our research. Moreover based on the life cycle process of ties
I propose to insert elements of this framework to build a framework more robust and
specifically designed for small business owners. Section 5 deals with the research design
highlighting our qualitative research strategy justifying the action research approach along
with a dual paradigm position of critical theory and realism. This section also discusses the

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data collection methods along with sample interview questions and collection of data from
various sources for triangulation of data. The strategy for data analysis is elaborated in
Section 5.4 which involves thematic analysis of primary data such as interviews and
secondary data being electronic transcripts which is typical of social media. The proposal also
indicates the timeframe for conducting the investigation with a time table. Finally, the
proposal is ended with a depiction of the expected outline of the thesis, a statement of ethical
consideration and the status of approval.



2 Research Questions
The basic aim of this research is to identify the main steps in the adoption process of social
media application like facebook and add to the body of literature on acceptance of
technology. Secondly, the goal of our research is to determine how practices of a social
media application like facebook by small business owners differs in terms of social
connections and also in terms of different user motivations. Finally, the purpose of this
research would be to examine the behavioural life cycle modification in the tie variation,
selection and retention processes with the adoption of social media tools like facebook. The
main research question I hope to answer is:

“How does adoption of social media impact the network of the small business
owner/entrepreneur?”

To answer this main research question we need to investigate several sub questions which
have been identified as follows:

RQ1 What are the motivations for entrepreneurs/small business owners to use social media
like facebook?
RQ2 What are the strategies employed by entrepreneurs/small business owners to adopt
social media such as facebook?
RQ3 How does the entrepreneur/small business owner differ in user behaviour than a
general private individual facebook user?
RQ4 How does the entrepreneur/small business owner initiate change in the ties to
accommodate exogenous factors of information systems such as social media?
RQ5 How does facebook add value to the existing social network of the entrepreneurs?
RQ6 How do small businesses incorporate relationship development strategies into their
facebook profile?



3 Justification for this research
There is limited knowledge in the existing body of literature on use of facebook by small and
micro business owners. The intention for this research is to fill this gap by identifying the
crucial elements in adoption and use of facebook by small businesses. I also propose to add to
the body of the rich existing network research by examining the influence of information
systems on entrepreneurial networks. The research subject is of extreme importance and
appropriate since the application of social media by businesses is maturing leading to the
shifting of electronic commerce to social commerce. Moreover, being in the area of
information systems based on small businesses addressing an important gap in the literature
substantial publishable outlets has been identified. Finally, creation of new jobs in businesses
like social media strategist will open up new opportunity for the researcher and as well for the
university to provide courses/papers related to social media.

3.1 Importance and appropriateness of this research

Small businesses and entrepreneurs are recognised by any economy in the world as the corner
stone of innovation, flexibility, productivity and efficiency generating employment and
wealth for the nation. The internet and social media technologies are giving rise to new breed
of entrepreneurs and also augmenting existing businesses to develop, interact and service
their customers as never imagined before. The importance of research linking social media
with entrepreneurs especially with the maturing of the social media cannot be denied and
timing of the same undermined. The evolvement of web 2.0 technologies in the early part of
the last decade led to the development of interactive web technologies where by stakeholders
of businesses could talk to each other, employees could talk to each other, top management of
businesses can communicate with various stakeholders, citizens can communicate and
express their view points with leaders and other citizens over various social issues in a
manner never imagined before. Stories about overnight successes by little unknown
musicians, common people having hundreds and thousands of followers and propensity of
individuals to give information about themselves, share information within their networks,
express their displeasures and gather information about product and services have made
businesses to look up towards this new channel of interactive communication and take
advantage of the same. The literature is abound with non-scholarly studies highlighting the
importance of these interactive channels for small business and entrepreneurs whose
businesses are dependent on their networks.



3.2 Easy accessibility to prospective data sources

Small business entrepreneurs can be reached very easily within the Hamilton region and will
enjoy the characteristics required for the study. Such businesses are dependent on the
characteristics of the entrepreneur, education and his/her network. Moreover there is a
general awareness of using facebook by business and they are quite eager to receive any help
and direction with respect to the same. With the intention to test this proposition emails have
been sent to various small businesses requesting an indication of their interest in participating
in my research project. I have received substantial interest from various businesses in the
Hamilton region interested to establish a facebook fan page for their businesses. Based on
this interest I have established contact with a number of small business entrepreneurs and
received their email confirmation indicating their interest to participate in my project. Section
5.3 provides greater detail about the prospective research participants.

3.3 Publishing of the research

The literature survey has led to various journals and I propose to publish articles arising out
of this research in major journals such as Decision Support Systems, Business Horizons,
Futures, International Journal of Information Management, Journal of Business Venturing,
Electronic Commerce Research and Applications, Long Range Planning, Journal of
Interactive Marketing. Most of these journals have more than forty volumes and could be
considered well established in their area of publications. I expect to publish spin offs short
papers out of the data collected based on single research questions leading to publishing of 3-
4 articles during the course of this study.

3.4 Benefits of this research

Social media has attracted substantial interest by all groups of the societies such as, small and
large businesses, clubs, education, non-profit, religion, and all sections of the government. It
seems that everybody is experimenting with some form of social media either by using twitter
or uploading photos and videos using MySpace, Facebook, YouTube, or by participating in
online blogs, or contributing knowledge through Wikipedia. A study in this direction would
be personally highly beneficial since businesses have already started employing social media
strategist and consultant for exploring, experimenting and gaining short or long term
competitive advantages from these social media technologies. Secondly, being an action
research project the subjects of this study will benefit by installation of a transactional



interface, having capabilities of networking by the entrepreneur with a range of its
stakeholders in a manner which will provide him/her competitive advantages at least in the
short term. The concerned department/university will gain from the exposure to social media
by way of publications in this field. As the area matures the department may be able to attract
students interested to partake and enrich knowledge in this upcoming field of social media.
Importance for the university has also been discussed in section.5.3. Finally this research will
have implications for the country as a whole, since small businesses are important in New
Zealand and if the small businesses are able to interact effectively with existing customers
through social commerce, gain customers through word of mouth and engage the customer
that will enhance exports, and build the brand of “New Zealand”.



4 Literature Review
Limited research on organisational use of social media has been performed in large
technology firms like Microsoft and IBM. The investigations have revealed that employees
are connecting with weak ties and use the social media application for discovery of ties
similar to their interest and objectives. This is in contrast to the general use of social media
which has been primarily used to connect with known off line connection. Secondly, the use
of micro blogging has been quite popular with businesses primarily since reciprocity of
relationship is not required. Micro blogging can be used for directed purposeful connections
as opposed to social media like facebook. Finally, the difference between the application and
its use by businesses along with paucity of research in small business and entrepreneurial
setting indicates a huge shortcoming in the literature. Due to this reason it was necessary to
work with two different set of literature one on social media and second the well-researched
rich and mature subject of entrepreneur network.

The review is divided in to nine sections beginning with the identification of the few key
articles from which the literature review draws maximum of its information. In preceding
section the key founding terms in social media are defined to suggest a wide range of terms
being used to mean similar concepts and technology. The next three section deals with
adoption of social media in general by businesses, popularity of micro blogging with
businesses and adoption of facebook like application in an organisation settings. In section
4.6 the hybrid UTAUT conceptual framework developed specifically for micro blogging is
discussed before proposing in Table 3 comparative constructs developed from four studies
which shall be useful for driving our data collection strategy. Finally in the last two sections
the discussion turns towards the arguments on the importance of weak and strong ties in the
network of the entrepreneur and identify the life cycle of ties which constitutes an important
component of this research.

4.1 Key articles used in the literature review

This section was prompted due to lack of credible study linking entrepreneurial personal
network and social media. I have tried to justify the reason for working with two set of
distinct literature sets one on social media and second on the extensive research on
entrepreneurial networks and importance of ties in the networks. Besides the presence of
extensive literature of social media and its use by business in marketing this literature is



predominantly non-scholarly and hardly links with other functions of the business.
Kärkkäinen et al. (2010 p.230) points this out lamenting on the paucity of academic literature
linking various business functions. The scarcity of literature is obvious from their comment
that “a total of 1357 articles were discovered of which 60 were chosen for further
examination based on the title. The selection criteria were that the article must address social
media or web 2.0, and relate to innovation in general, or to some or to all innovation process
phases”. Kärkkäinen et al. (2010 ) claim is supported from a recent conference Oct 2010 “due
to the relative infancy of social networking technology, there are very few formal studies
published in the traditional academic media - most existing articles have been published as
reports from consulting firm, trade publications, and online reports. Research in this area can
be traced back to communications research which model how social influence processes
affect individuals' attitudes toward communication networking and networking use
behavior.” (Venkatraman, S. S. 2010 p.1) The author also adds that “there is clearly a need
for scholarly research on the impact of social networking technology on the way
organizations communicate with their customers, formulate new strategies for building
brands, and develop new products and services that the customer needs”.

Continuing the argument on the paucity of research in this area Kärkkäinen et al. (2010
p.230) say that “very few recent academic studies were found that studied the adoption of
social media in organizations in general, or the adoption in different business functions” and
also “most of the found empirical studies are not academically implemented and reported”.
In short it can be concluded from the above evidence and my own experience that being an
upcoming field non-academic data and student research is prominent. Due to this reason it is
necessary to work with two different set of literature one on social media and second the
well-researched rich and mature subject of entrepreneur network. Based on this discussion it
becomes essential to provide a list of the key articles especially in the social media arena
before I delve further in the critical review and identify the gaps in the literature. Table 1and

Table 2 list the key articles which has been reviewed and constantly referred in our research.
The arrangement of the articles is based on importance of the articles to our research. I have
reviewed two set of distinctly different literature one on adoption and related issues of social
media and second on entrepreneur network and ties. I found just two articles of DiMicco et
al., (2008) and Skeels & Grudin, (2009) offering us a connection between the two table by
quoting the work of Granovetter, (1973) in relation to IBM and Microsoft employees using



social media to maintain weak ties. In association with this link work of Günther et al.,
(2009) in extending the UTAUT is extremely important and justifies the theoretical
framework of this research. Slotte-Kock & Coviello (2010) development of model for
studying life cycle of ties in entrepreneur network along with Jack, (2005) work and strong
and weak ties forms the basis of theory to be examined in light of the constructs in the
UTAUT

Table 1: Articles related to Social Media (Arranged in level of importance to the
investigation)
S.No. Author Subject Matter
1. Günther et al., (2009) Modelling of adoption of twitter in enterprise –
extension to the UTAUT model
2. DiMicco et al., (2008) Investigates adoption of social media (facebook type
application) at work – motivations for employees –
Action research – nature and purpose of connection
3. Blake et al., (2010) Studies twitter adoption – diffusion process
4. Kärkkäinen et al., (2010) Adoption of social media in b2b for innovations
5. Ellison, et al., (2007) & Two similar investigation – College students motivation
Ellison, et al., (2011) to use facebook – evidence for building of social capital
6. Boyd & Ellison, (2008) Descriptive – latent ties – general – off line connections
7. Brzozowski et al., (2009) Forward citation from DiMicco et al. (2008) – examines
effect of feedback and peer pressure

8. Hopkins & Ress, (2007) Adoption strategies - bundle of social media tools –
University settings
9. Kaplan & Haenlein, Descriptive – Challenges and advantages of social media
(2010)
10. Kaplan & Haenlein, Descriptive – about the advantages of Twitter
(2010)
11. Fischer & Reuber, (2010) Effect of twitter on entrepreneur thinking and behaviour

Table 2: Articles related to entrepreneur networks (Arranged in level of importance to
our research)
S.No. Author Subject Matter
1. Slotte-Kock & Coviello Build on work of Schutjens & Stam (2003) theoretical
(2010) development of a model
2. Jack (2005) Examines the relations of ties
3. Granovetter, (1973 & Seminal and higly cited work – form the basis of all
1985) network research – strength of weak ties
4. Hoang & Antoncic (2003) Summary of the research in entrepreneurial networks
5. Brüderl & Preisendörfer Empirically examines the role of networks in newly
(1998) founded small businesses
6. Johannisson & Mønsted contextual study of entrepreneurial networking
(1997)



7. Johannission, (1988) contextual study of entrepreneurial networking
8. Schutjens & Stam (2003) Examines new firm networks
9. Jack (2010) Examines methodological issues in researching networks
of small businesses

In brief, the literature survey revealed that the knowledge about social media use in
entrepreneurial activity is currently fragmented and skewed. The few studies concentrate on
individual tools and technologies mainly based on individual cases for theory building
drawing from other theories and models such as the UTAUT. Studies combining social
media/Internet and entrepreneurs have been mainly studied from a marketing perspective, and
little attention is placed on entrepreneurial networks. Moreover, research is virtually non-
existent in the area where social media, entrepreneurs and their ties in the network dissect.

4.2 Definitions and key terms in social media

Web 2.0 is the set of tools to alter web pages to become an interactive media so that users can
interact socially giving rise to social commerce and eventually facebook commerce. The
terms and tools related to the same are described in brief detail for web 2.0, social media,
social commerce and facebook commerce.

4.2.1 Web 2.0

Kärkkäinen et al., (2010 p.2) quote from Lehtimäki et al. 2009 that “web 2.0 means
technologies that enable users to communicate, create content and share it with each other via
communities, social networks and virtual worlds, making it easier than before, as well as to
have real life experiences in virtual worlds and to organize content on the internet with
content aggregators”. On the technical side Kaplan & Haenlein (2010a) describe web 2.0 as a
set of tools and techniques for the world wide web which provide the basic functionalities for
its operation and functioning. Among the tools are adobe flash which provide a method to
upload and display animation, interactivity, and audio/video streams to web pages. Really
Simple Syndication (RSS) is a family of web feed formats used to publish frequently updated
content, such as blog entries or news head-lines, in a standardized format. Finally, AJAX
(Asynchronous Java Script and XML) is a method to retrieve data from web servers
asynchronously, in the background without interfering with the display and behaviour of the
whole page. Kaplan & Haenlein (2010a p.60-61) opine that “web 2.0 is a term that was first
used in 2004 to describe a new way in which software developers and end-users started to
utilize the World Wide Web; that is, as a platform whereby content and applications are no



longer created and published by individuals, but instead are continuously modified by all
users in a participatory and collaborative fashion”.

4.2.2 Social media

Kaplan & Haenlein, (2010a p.61) defined Social Media as “a group of Internet-based
applications that build on the ideological and technological foundations of web 2.0 that allow
the creation and exchange of User Generated Content (UGC)”. Kim et al., (2010 p.217)
define “social websites as those websites that make it possible for people to form online
communities, and share user-created contents (UCCs)”. Tredinnick (2006 p.231) defined
“social networking sites as those sites driven by user-participation and user-generated
content.” The common theme running behind these definitions is user generated content
which has been enabled by web 2.0 technologies. A business oriented definition has been
provided by Mangold &Faulds, (2009 p.1) which states that, “social media is a hybrid
element of the promotion mix because in a traditional sense it enables companies to talk to
their customers, while in a non-traditional sense it enables customers to talk directly to one
another. The content, timing, and frequency of the social media-based conversations
occurring between consumers are outside managers' direct control.” “Social media, also
referred to as consumer-generated media describes a variety of new sources of online
information that are created, initiated, circulated and used by consumers intent on educating
each other about products, brands, services, personalities, and issues (Blackshaw & Nazzaro,
2004, p. 2)”.

The underlying difference between the generic definitions and business definition of social
media is that the users have been replaced with the customers/consumers, thereby unleashing
a host of opportunities for businesses and shifting of power to the consumers. The term social
media has been disintegrated in to various terminologies such as social media site, social
networking sites so on. For our purpose we use the broadest sense of the term which shall
encompass all other terms and definitions.

4.2.3 Social Commerce

At this junction, it becomes simple to introduce social commerce which simply explained is
the monetising efforts of social media by businesses. Social commerce being applied and its
application by businesses is relatively a new phenomenon and academic literature is quite
limited and skewed. Stephen and Toubia (2009 p.3) describe social commerce as “a key



effect of creating a social commerce network is making shops more accessible to customers
browsing the marketplace. These links allow customers to move more easily throughout the
online marketplace, like in a virtual shopping mall and shops whose accessibility is enhanced
by the network to earn higher revenues.” This definition by Stephen and Toubia (2009) is at
the other extreme and it is necessary to rely on non-academic definitions from wikipedia and
http://socialcommercetoday.com/ for a working definition of social commerce. It is the fusion
of social media with e-commerce, or in the words of IBM, social commerce is basically the
concept of word of mouth applied to e-commerce. More fully, social commerce is a subset of
electronic commerce that uses social media, online media that supports social interaction and
user contributions, to enhance the online purchase experience. It is also an increasingly
popular solution for monetising social media marketing - the online promotion of goods and
services using social media.

It was possible to define facebook commerce by simply saying that it is a subset of social
commerce selling of goods and services on the facebook interface. However, that would be
highly inappropriate since facebook is not about shopping carts, transactions, payments and
also definitely not about just “liking” products and writing reviews. For a better
understanding of facebook commerce it is required to dwell briefly on the evolution of social
media and the features of facebook.

4.2.4 Facebook Commerce

Social media has evolved from the late 1990s as simple text blogs to present technologies
providing rich multimedia based content along with a plethora of add-on features. The
evolution of social media are documented by Boyd & Ellison, (2008); Ellison et al., (2007);
Ellison, (2011); Kaplan & Haenlein, (2010a); (2010b); Kim et al., (2010); Pouwelse, et al.,
(2008) and finally Trednnick (2006). Due to continuous evolution of the technology
obviously the studies need to be updated in the dynamic ecosystems of social media. It has
evolved from isolated technology such as integration of email and chat by Google and now
video and voice chat, organizing photos by Flickr’s, uploading videos by YouTube, and
music channels. In this respect facebook can be called a hybrid social media platform which
offers its users capability to share photos and videos, link with his/her friends, maintain
groups, maintain and share links, browse through various products and services, plan
holidays, seek opinions and now a most simplified messaging service linking up to your hand
device the mobile facebook. In certain ways it is a world in its own capacity linking friends



long lost, a breakfast activity in the US for teenagers and a source of inspiration for many of
the old folks (Kaplan & Haenlein 2010a&b).

The user base of facebook has prompted several investigations on why people join social
media and specially facebook from the social sciences group and as well as business study
groups. Such studies have identified that people have a basic desire for self-expression and
surprisingly a large amount of pent-up need to communicate, share and be social, while social
identity theory maintains that similar people are naturally attracted towards each other. Boyd
& Ellison, (2008); Ellison et al., (2007); Ellison et al., (2011); Joinson, (2008); Kaplan &
Haenlein, (2010b); Cheung & Lee, (2010); Smith & Kidder, (2010). These studies conclude
that in any type of social interaction individual has the desire to govern the impressions other
people form of them influencing others to gain rewards - create image - self disclosure is a
critical step in the development of close relationships. Cheung & Lee (2010 p.28) states that,
“the decision to use online social networking technologies represents a social phenomenon
that largely depends on the interactions” and concludes observing that “the driving forces
behind online social networks are connections and community, and the usage is largely
depended on subjective norm and social identity”. The membership base and user
information is attracting businesses to explore this information laden potential customer base.

Facebook provides businesses with an established active netizens who are indulging in the
various rich features using its simple, practical, efficient, fast template and interface.
Businesses can for no charge freely set up a business page, up load photos, information, and
variety of basic and useful details in matter of minutes. Businesses can then invite various
existing users mostly from its network of employees, their friends and other stakeholders
such as suppliers, customers, government officials, accountants and so on. An important
aspect to note here is that though a business page is created the members who like the page
are individuals - the focus is on individuals who may be a part of your close or extended
existing network. Very recently facebook has provided the option for business to like other
businesses and comment and communicate as a business with businesses. This indicates the
movement, trend and strategic attitude of facebook to increase its member business
interaction. It would be appropriate to describe facebook commerce as a subset of social
commerce which tries to make the shopping experience more social and besides shopping it
provides a rich interface for interacting and engaging the various networks of businesses. To
put this in perspective an appropriate quote from Fischer & Reuber, (2010), “Facebook is a



cocktail party and so when you are engaged in facebook you are surrounded, sometimes very
peripherally but surrounded, by people that you know and you like and that are part of your
social graph”.

This section briefly touched the subject of web 2.0, social media, social commerce and
facebook commerce discussing in brief why people join facebook. However, social
commerce is an up-coming subject in vogue with the development of facebook business
pages and other similar social media sites like linked-in. The next section will discuss the
rationale behind why businesses have a lukewarm approach to adopting social media.

4.3 Adoption of social media by businesses

Lack of knowledge and capabilities, privacy concerns, and what to post is making businesses
shy towards social media which is being primarily used for branding and marketing of
products. Moreover, micro blogging seems to be preferred by businesses more than facebook
like applications. This might be primarily due to the starting point of each of the social media
applications. The bulk of social media research has concentrated on impression management
and friendship performance, networks and network structure, online/offline connections, and
privacy issues. DiMicco et al. (2008) researching on technology organisation finds significant
body of existing research on method of application of social software in general in a
corporate environment. They refer to the studies of (Jackson et al. 2007, Kim et al. 2008) on
the utility of blogging software, (Millen et al. 2006) on social bookmarking tools and wikis
[Hasan & Pfaff 2006]. However, these studies cannot be described as academic studies and
have been done within the boundaries of an intranet largely sponsored by the organisations in
study. Secondly, the examination of the study has been limited to highly skilled employees of
technology organisations and cannot be considered as general businesses. A practical
approach has been followed by Kärkkäinen et al. (2010) investigating general companies to
actually see how much of the social media application has actually penetrated the non-
technology and traditional organisations. Kärkkäinen et al. (2010) investigation of various
white papers and statistics lead to revelations that 15% of general working population used
social media at work though they did use them outside the work context. They point out that
the general understanding and use of social media for business purpose is quite low and
uncommon. Kärkkäinen et al. (2010) examines survey performed by Coleman, (2009) and
Gordon, (2009) and highlights the following challenges for businesses to adopt social media:



1. Lack of knowledge of the possibilities of social media innovation

2. Difficulties in calculating return on investment of time

3. Problems in adopting new mental models and practices required for adoption

4. Lack of proof of application by businesses.

In absence of research examining the adoption of social media in the regular business it is
useful to examine the purpose of adoption by employees of technology companies. DiMicco
et al. (2008) summarises the application of social media by technology companies primarily
as a self-presentation tools to broadcast self as an evangelists and thought leaders. Tools like
blogs, bookmarks and wikis are more information-centric tools rather than connecting with
fellow employees and hence cannot be described as social software. Brzozowski et al. (2009
p.2) opines that “unlike email, which must be targeted to specific recipients or distribution
lists, social media provide as free broadcast platform, allowing authors to circumvent
traditional organisational hierarchies and connect with geographically or organisationally
distant readers”. Kärkkäinen et al. (2010) based on survey results finds application of social
media by businesses is inclined more towards communication to the customer in the
traditional sense like branding, public relations and lead generation rather than
communication with the customer, understanding the customer and internal communications.
At the backdrop of this discussion research has significantly increased towards micro-
blogging as an application used by businesses. Several authors have investigated adoption of
micro blogging by businesses such as Günther et al. (2009), Blake et al. (2010), Meyer &
Dibbern (2010), Fischer & Reuber (2010) Riemer & Richter (2010a & b). The next section
will examine the popularity of micro blogging and the adoption challenges for businesses.

4.4 Adoption and motivation of micro blogging by businesses

Businesses are adopting micro blogging to make directed connection with people who have
same or common business interest and hence enjoy a substantial user base with small and
medium enterprises owners. Günther et al. (2009) says that in comparison to the adoption of
traditional word processing software or spreadsheets and even email the application of micro
blogging in to offices and workspaces confronts businesses with specific challenges which
arise particularly due to its collaborative nature. In contrast to email communications, or
closed virtual groups conversation carried out on micro blogging is available to a definable
population. This will lead to knowledge storage and exchange and provides excellent



opportunity for data mining. Blake et al. (2010) categorically differentiates micro blogging
from facebook based on the requirement of acknowledgement of a relationship in facebook.
In facebook A has to acknowledge B as a friend and only then the relationship can proceed
but in case of micro blogging that is not the case so. In micro blogging A can follow B but
the vice versa is not necessary and mandatory. As one of the participants of Fischer & Reuber
(2010 p.3) a user of twitter appropriately observes that “twitter is more like somebody
standing on the street corner with a megaphone saying, “Hey, if you're interested in the
Toronto Maple Leafs, check out this article!” And I may be interested and I might check it
out or I may just walk right by.”

Another participant of Fischer & Reuber (2010 p.1) appropriately summarises the application
of micro blogging as “twitter has been my number one resource for building my community
and building my business. Twitter enabled me to reach out to people that I otherwise wouldn't
or couldn't. You can find people who are relevant to your business readily and steadily and as
the usage numbers peak on Twitter so does that ability to really connect with people in a
relevant manner. What Twitter allowed us to do was cultivate a following of people for
various things. … A lot of these people I have engaged in an online fashion have become part
of our offline social functions and I formed real relationships with many. Hundreds of people:
my network exploded … it grew exponentially and it's through Twitter. It's through
connecting with people. They find me. They reach out to me or I find them. I reach out to
them. And we engage in ongoing conversations online, meeting up sometimes offline. These
are real relationships.” This summary brings out the precise meaning of what Günther et al.
(2009 p.1) was trying to point out while quoting (Cross, Parker and Sasson, 2003) “this is of
particular value given one of the most consistent findings in the social science literature
saying that whom you know is highly correlated with what you come to know”

The motivation for adopting micro blogging has been to make connections more
appropriately directed connection with people who have same or common business interest
and hence the businesses especially small and medium enterprises are trying to adopt micro
blogging as evident from the studies of Günther et al., (2009), Blake et al. (2010), Meyer &
Dibbern (2010), Fischer & Reuber, (2010) Riemer & Richter (2010a & b). The research
questions of these investigations are quite similar with variations in setting such as teams,
entrepreneurs, only twitter users or organisational settings with dedicated twitter like
applications. The questions can be described as: what is the utility of Twitter? How can



Micro blogs be used at work? How is Twitter currently being used? Why is Micro blogging
accepted and used at work? What uniqueness does Twitter Possess? The studies use a range
of theories to evaluate the questions posed by micro blogging which is discussed later in
section 4.6. The next section elaborates a sole study of adoption of facebook like application
in an organisational setting expectedly a technology company.

4.5 Adoption of application similar to facebook in organisational settings

Contrary to individual use on facebook for connecting with families and existing friends,
businesses users tend to use facebook like application for connecting with weak ties and for
career advancements. This section is largely reliant on the study “Motivations for social
networking at work” by DiMicco et al., (2008) who have studied by the process of action
research the adoption process and motivation of employees of IBM using a facebook like site
within their intranet. DiMicco summarises the main points of the study as (p.711) “our
analysis of user behaviour and interviews presents the case that professionals use internal
social networking to build stronger bonds with their weak ties and to reach out to employees
they do not know. Their motivations in doing this include connecting on a personal level with
coworkers, advancing their career with the company, and campaigning for their projects.”
These results are contradictory to investigation of Lampe et al., (2006), Joinson, (2008) and
Ellison et al., (2007) & Ellison et al., (2011) who have investigated the motivation of
facebook users in college settings.

Joinson, (2008) in its study of motivations for people to use facebook identify seven unique
uses and gratifications which motivated people to use social media in their life which are
social connection, shared identities, content, social investigation, social network surfing and
status updating. Joinson, (2008 p.1028) opines that “social networks serve a number of
functions in offline life – for instance, providing social and emotional support, information
resources and ties to other people”. According to Joinson, (2008) facebook provides similar
kind of social networks in online communities with users turning online for both emotional
support and as an information resource. DiMicco et al. (2008) suggests that prior research
indicates that users are using the sites to stay in touch with friends (Boyd 2006, Ellison et al.
2007, Joinson 2008, & Lampe et al. 2006). According to DiMicco et al., (2008p.1) “the
research thus far on social network sites (SNSs) has been focused on four main aspects:
privacy issues (Acquisti & Gross, 2006;, Dwyer et al., 2007; Govani & Pashley, 2005; Gross
& Acquisti, 2005; and Jones & Soltren, 2005;), self-presentation (DiMicco & Millen, 2007;



Donath & Boyd, 2004; Gosling, 2007; Lampe et al., 2007;), network analysis (Boyd, 2004;
Heer & Boyd, 2005;), and social capital benefits (Ellison et al., 2007, Joinson, 2008)”

Lampe et al., (2006) found that facebook users spend more time connecting with friends they
know rather than trying to make new friends or browsing through profiles of those they do
not know. Literature review by Boyd and Ellison, (2008 p.213) also support this result stating
that “although exceptions exist, the available research suggests that most SNSs primarily
support pre-existing social relations”. Further recent studies by Ellison, et al. (2011) found
positive relation between greater “bridging” and “bonding” social capital with greater usage
of facebook. This means that that the ties to one’s immediate and extended friends are
stronger with greater use of Facebook. Ellison et al., (2007) suggests that facebook is used to
uphold existing offline connections or enrich offline relationships, as against meeting new
people. These connections are ideally weak ties, which have a common element such as
school friend or neighbour or from the same town. Ellison et al., (2011) says that this is one
of the chief dimensions that differentiate social media from earlier forms of public
networking such as virtual communities and newsgroups. Hopkins & Ress, (2007) opine that
the rise of specialized social media sites positioned towards specific user groups, such as
professionals, indicates that social media can be of use to many types of users, in many varied
ways. LinkedIn.com is the most popular public site for companies and professional
networking having more than 80 million users. Applications of LinkedIn are not limited to
networking and include generating sales leads, finding potential hires, and in general,
leveraging the contact lists of fellow colleagues (Kaplan & Haenlein, 2010). In contrast to the
application of facebook as suggested by Ellison, et al., (2011) the focus of professional users
is on information providing and gathering, not on socializing. (DiMicco et al., (2008); Skeels
& Grudin, (2009); Papacharissi, (2009).

An important conclusion reached by DiMicco et al., (2008 p.718) has been that employees of
IBM used the “site to connect with the “weak ties” (Granovetter, 1973) in their network:
either colleagues they did not know well or ones they had worked with previously but did not
communicate with on a regular basis now.” The employees at IBM used the social internal
networking site to primarily acquaint with their weak ties and attempt to know these weak
ties on a personal level. This conclusion is supported by Skeels & Grudin, (2009) who
investigated technologically savvy individuals at Microsoft to conclude that social media is
predominantly used to maintain weak ties. DiMicco et al., (2008) argue that in contrary to the



research on facebook and other internet social media sites IBM employees were not using the
site for maintaining contact with close colleagues. Instead of the usual expected behaviour
pattern of application on facebook the users attempted to discover and connect with
colleagues they were not acquainted or sparsely know to them. Members used the
application in a manner quite similar to connection choices of micro blogging to connect
beyond the boundaries of their offices. They connected with colleagues with similar interest
across geographically diverse locations groups and offices. In the own words of one of the
participants of DiMicco et al., (2008 p.715) “beehive helped me maintain loose social ties
with people I don't have a close, frequent connection with (which is based on a work or
friendly relationship), but would like to do some maintenance to my connection with them,
for the future's sake.” According to the findings of DiMicco et al., (2008) connecting beyond
one’s own network has been the key activity and motivation for using the system.

On a detailed level DiMicco et al., (2008) classify the motivations and applications of the
social media site as caring, climbing and campaigning. According to them a recurring theme
from the analysis of the interviews was about the personal satisfaction gained by the
employees while connecting with their colleagues. This was brought out in the words of one
the interviewees (p.716) “We no longer have the face-to-face contact we had 5+ years ago, so
we don't get to ‘catch up’ on the life side of work/life, family, what we did on the weekend,
pictures from our holidays, etc. However, we do get to do that here [on Beehive] so we've
added that interpersonal relationship back in... I'm enjoying being here and seeing a different
side of people I work with.” DiMicco et al., (2008 p.717) mentions that “this desire to
connect personally, both to those you may work with and those you don’t know, was a
tangible and most frequently mentioned benefit to the site”. Secondly, in connection to the
discussion above about connecting to new colleagues members are also trying to connect
with upper management. This is akin to traditional social networking done at physical events.
Members are also commenting and interacting with upper management through their profiles
in an attempt to be known to the upper management. Finally, a small section of member
similar to our earlier discussion about being evangelist and thought leaders in their fields
were trying to garner support for their projects. As DiMicco et al. (2008 p.719) observes that
“these users see Beehive as a unique platform for promoting and campaigning for their
projects”.



Based on the discussion in this section and the earlier section about adoption of micro
blogging the business pages in facebook as discussed in section 4.2.4 are similar to micro
blogging at least on relationship front. Business pages on facebook are set up in a manner
depending on the privacy setting wherein a user can “like” the business page and then interact
with the business while the businesses don’t need to respond back to confirm relationship. As
suggested by Boyd & Ellison, (2008 p.218) the “term ‘‘Friends’’ can be misleading, because
the connection does not necessarily mean friendship in the everyday vernacular sense, and the
reasons people connect are varied (boyd, 2006a)”. Users can like and follow number of
businesses and they choose to receive information about updates and deals which the
business may post in their newsfeed. For example one can choose to like specific set of
businesses which may be of interest to the individual and then continue to interact with these
businesses on various problem and issues. It is quite possible that competitors may like the
page of a particular business just to receive news and information about their regular
postings. Moreover micro blogging stream can be integrated within facebook and vice versa
in new techniques of “mashable” option within the social media site interfaces. Researchers
have applied several methods to understand the adoption process of social media in to
businesses. The framework for adoption of micro blogging by businesses has been examined
through the lens of UTAUT which is discussed in the preceding section.

4.6 Conceptual framework based on Unified Theory of Acceptance and
Use of Technology (UTAUT)

A modified version of the UTAUT has been developed by studying social media adoption
with new constructs in the umbrella of performance expectancy such as reputation,
communication benefits and in particular privacy concerns that have influence on the
behaviour patterns of acceptance of micro blogging and social software in general. Due to the
popularity of micro blogging substantial academic research has been generated and the
following authors Günther et al., (2009); Blake et al., (2010); Meyer & Dibbern, (2010) and
Riemer & Ritcher, (2010a & b), have examined the adoption of twitter in organisational
setting. Günther et al., (2009 p.3) say that “to our best knowledge there are no studies on
micro blogging adoption within an organizational setting. So, there is a need to close this gap
as individuals may be expected to follow another rationale in a workspace environment than
they do when forming their adoption decision for private purposes.” Based on Günther et al.,
(2009) Blake et al., (2010), and Meyer & Dibbern, (2010) have examined micro blogging in
different settings the former using the Rogers diffusion theory and later applying the



UTAUT. In addition Riemer & Ritcher (2010a & b) use the genre analysis method to analyse
a case study of micro blogging adopted by a software organisation. On analysis of the
literature it is found that Günther et al., (2009) has adapted UTAUT from the highly cited
seminal work of Venkatesh et al., (2003) specifically for social software adoption. According
to Günther et al., (2009 p.9) “even though our model is tailored to the specific needs of micro
blogging, we expect it to perform well in explaining social software adoption in general as
similar issues arising from self-disclosure and social interaction are involved”. In this section
the constructs of the model are inspected in light of the further studies undertaken in the
similar direction by Blake et al., (2010) and Meyer & Dibbern, (2010) and how they can be
adopted for examination of this research.

Blake et al., (2010) focuses on how micro blogging associates itself to concepts from
Diffusion of Innovations by Everett M. Rogers. Blake et al., (2010 p.1257) says that
“according to Rogers, diffusion occurs when information regarding an innovation is
communicated over time through certain channels among members of a social system”. They
say that during the process of decision of adoption of innovations individuals have to make
the crucial decision whether to accept or reject the new innovations. The decision process
usually involves a series of steps beginning with gathering of knowledge about the
innovation, persuasion attempts, decision making, implementation of innovations, and
confirmation seeking. Günther et al., (2009) on the other hand investigated and reviewed a
number of models with regards to their applicability to technology adoption stating the reason
as lack of empirical studies on micro blogging. Günther et al., (2009 p.1) reviewed
technology adoption and behaviour theories of authors such as Rogers’ Innovation Diffusion
Theory (2003), Decomposed Theory of Planned Behaviour (Taylor & Todd, 1995), and
Technology Acceptance Model including its extensions (Davis, 1989; Venkatesh & Davis,
2000). Venkatesh, et al., (2003) summarized these and five other models to identify
similarities among elements between these models which were then empirically validated.
Günther et al., (2009 p.2) opines that “as a result, they conceptualized the Unified Theory of
Acceptance and Use of Technology (UTAUT) thus integrating performance expectancy,
effort expectancy, and social influence as predictors of behavioural intention as well as
behavioural intention and facilitating conditions as predictors of the actual behaviour in terms
of adopting the technology”. In addition to behaviour intention the rate of adoption is suitably
explained by Rogers theory of diffusion as suggested by Blake et al., (2010 p.2) opine from
Rogers, (1995) that “the rate of adoption of an innovation is the relative speed with which an



innovation is adopted by members of a social system”. There are five key characteristics of
innovations that affect the rate of adoption. These include:

1. relative advantage of the innovation,
2. compatibility of the innovation with current ideas and norms,
3. complexity of the innovation,
4. trialability of the innovation, and
5. observability of the innovation. (Rogers 2003)

Besides the rate of adoption a typical characteristic of social software has been of knowledge
sharing. This point of view about knowledge sharing has been explained by Kärkkäinen et al.,
(2010 p.4) by stating that “various types of collaborative web tools and approaches, such as
social media, can enable and significantly increase the use of the distributed knowledge both
within and outside the company borders [McAfee 2006, Levy 2007], as well as support the
transition to more open innovation processes”. The application of social software for
knowledge sharing is also opined by Günther et al., (2009 p.2) evident from “indeed, micro
blogging implies knowledge sharing as information is sent and received. Thus, insights from
the knowledge sharing literature might prove useful in explaining the formation of individual
performance expectation as well as behavioral intention.” Günther et al., (2009) quote from
Wasko and Faraj (2005) to argue that individual contributors to knowledge expect reputation
gains by contributing knowledge to a group of users or community important to the
individual. Blake et al., (2010) & Günther et al., (2009) from Bock, et al., (2005) point out
that reciprocal relationship and organisation climate is an important determinant of individual
attitude towards knowledge sharing in an enterprise context. Günther et al., (2009 p.3) is of
the opinion that “extending UTAUT by integrating relevant constructs from the knowledge
sharing literature as well as other relevant determinants may reveal important dynamics
behind the individual adoption decision as well as make the model more useful for
practitioners who are looking for operable means to ensure technology adoption.”

Similar to the line of investigation of Fischer & Reuber, (2010) using interviews and focus
groups Günther et al., (2009) examined the challenges of adoption of micro blogging by
selecting participants from different cultural and technical backgrounds. In the UTAUT
model besides its general nature and moderating variables of gender, age and experience
behavioural intention are directly dependent on the main constructs of performance
expectancy, effort expectancy and social influence. According to Venkatesh et al., 2003, p.



447) “the performance expectancy construct within each individual model is the strongest
predictor of intention and remains significant at all points of measurement in both voluntary
and mandatory settings” Based on this construct Günther et al., (2009 p.3) opines that
“decomposition of this important construct may shed light on the underlying forces
constituting individual value and allow for insightful managerial implications. This approach
seems especially suitable taking into account a collaborative nature of microblogging
applications as opposed to traditionally tested IT applications in the context of technology
acceptance (e.g. word processing software (Davis, 1989).” The diagrammatic modified
representation of the model adapted to micro blogging has been proposed by Günther et al.,
(2009) which is attached as Appendix A Modified and Extended Version of UTAUT.
Günther et al., (2009) based on the Venkatesh et al., 2003, model find several new constructs
such as reputation, expected relationship, codification effort, signal-to-noise ratio and privacy
concerns which are unique to the social software arena. These new constructs as indicated in
the figure in Appendix A Modified and Extended Version of UTAUT have direct influence
on behaviour intention. Günther et al., (2009 p.9) based on the new constructs argue for
“several modifications and extensions to the UTAUT model in order to account for the
specific nature of microblogging adoption in an enterprise context.” According to them the
introduction of privacy concerns as a relevant construct is seen as an important step.

Building on this premise Meyer and Dibbern (2010), also propose a model for twitter
acceptance based on UTAUT more focussed and extending the performance expectancy
element. They define performance expectancy (p. 6) “the degree to which an individual
believes that using the system will help him or her to attain gain in job performance”. Their
study is based on performance expectancy arising out of enhanced awareness and develops
the following elements: task interdependence, task similarity, reputation and expected
relationships. Based on the constructs of DiMicco et al., (2008), and other authors on micro
blogging I have a prepared a comparative conceptual framework in Table 3.

Table 3: Conceptual comparative framework modelled from three similar studies and
one facebook like application
Günther et al., (2009) Blake et al., Meyer &Dibbern, DiMicco et al.,
(2010) (2010) (2008)
Perceived Usefulness Trialability task interdependence Social Caring
Relative Advantage Advantage Climbing
Reputation Observability Reputation Campaigning



Expected expected relationships Campaigning
Relationships
Incentives
Fun Social Caring
Improving expected relationships Campaigning
Communication
Supporting task interdependence
Distributed Work
Speeding Up expected relationships Weak ties
Communication
User Control
Ease of Use Complexity
Compatibility Compatibility task similarity
Privacy Concerns Low
Critical Mass
Self-Efficacy Climbing &
Campaigning
Social Pressure Social Caring

The discussion so far has concentrated on various models which have been proposed using
the UTAUT as the base model for the application of the micro blogging. DiMicco et al.,
(2008), Skeels & Grudin, (2009) and Brzozowski et al., (2009) are few studies which have
examined facebook like application in organisational settings. However, these investigations
have been conducted in a technology organisation such as IBM, Microsoft and HP wherein
the users are highly skilled and developed with respect to computers and software. The
overriding difference between the micro blogging model and DiMicco et al., (2008) model
has been that the facebook like application is about caring, climbing and campaigning which
another viewpoint and the possible over laps are indicated in Table 3. DiMicco et al., (2008)
and Skeels & Grudin, (2009) refers to highly cited and seminal work of Granovetter, (1973)
connecting with weak ties. Kaplan & Haenlein, (2010b p.65) “social media is not only
relevant for large multinationals but also for small and medium sized companies” and Fischer
& Reuber, (2010 p.3) suggest in its study of entrepreneurs who have used twitter that
“entrepreneur learned that he could connect to his customers even more effectively than he
had been doing”.



The seminal work of Granovetter, (1973) has been the basic interest of network researchers
for the last few decades especially for small and medium enterprises. General simple small
and medium businesses do not processes the level of knowledge and inclination like the
research participants of DiMicco et al., (2008). Moreover, as discussed earlier facebook
business pages are free and have been capitalised by many small business by making a fan
page and “campaigning” their products and services to the select audience. Fischer & Reuber,
(2010 p.2) say that “in the relatively few scholarly studies that consider how such social
media may benefit firms, the majority has focused on social media as marketing tools. Little
is known about how the use of social media may affect the entrepreneurs themselves”. It is
expected to see similar constructs of caring, climbing and campaigning attitude along with
elements of performance expectancy, ease of use, and privacy concerns by social media
adopting small businesses owners/entrepreneurs whose ties and personal networks have been
the subject of immense interest by researchers. I expect to add personal characteristics as an
important construct to the existing body of literature on adoption of social media. The next
section examines the extensive literature on entrepreneurial personal networks and the
importance of weak ties is reviewed for insights and building of our conceptual framework.

4.7 Entrepreneurs – Role of links actors and ties in social networks

The importance of links and ties which are embedded in the network is of extreme
importance and secondly wider the network more varied resources can be gathered by the
entrepreneur. By definition, an entrepreneurial venture requires the introduction of
innovations and the simultaneous handling of many tasks (Schumpeter, 1934) (Minniti,
2005). Jack et al., (2010 121p.) define entrepreneurship as “a social undertaking and as a
consequence is carried out and must be understood within the context of social systems
(Sarason et al., 2006)”. Typically such owner/managers have relatively small and non-
extensive networks (Curran et al., 1993, p. 23; Taylor et al., 2004) that tend to be formed
around suppliers, customers, competitors and funders. (Jack, 2010) Apart from personal
social networks the intensity of the day-to-day requirements of running a small SME limits
exposure to wider networks (Gordon & Jack, 2010). Jack (2010 p.121) points out that
“entrepreneurs are intimately tied through social relationships to a broader network of actors
(Hoang & Antoncic, 2003)”. The Social networks and embeddedness of ties and links in the
network are the basic factors in the decision making processes of the entrepreneurs (Gulati,
1998; Uzzi, 1997) (Jack, 2010). Jack, (2010 p.122) & Minniti, (2005) argue that “by



combining the work of Larson and Starr (1993) with that of Uzzi, (1997); Uzzi & Gillespie,
(2002); Uzzi & Lancaster, (2003); and Hite, (2003, 2005); a better understanding has been
gained about relationally embedded ties, processes through which these ties might evolve,
relationships between social ties and organizational networks”.

Business networks have been defined by Hoang and Antoncic, (2003 p. 169) as “consisting of
a set of actors and some set of relationships that link them” Nelson (1988) defines networks
as “sets of ties linking several actors”. (Minniti, 2005) (Jack, 2010 p.121) These definitions
emphasize the notion of actors and links between actors (Jack, 2010). And this is not really
surprising since social relations are a fundamental element of everyone's life (Jack, 2010);
(Gordon & Jack 2010); (Jack et al., 2010). The links and ties in small organisations are not
just relationships and channels of communication; but they facilitate the mechanism allowing
flow of information and resources are drawn from, which are then exchanged within the
social context (Aldrich et al.1987) (Jack, 2010). Granovetter, (1985) argued that both the
economic and non – economic goals are part of the social network and economic action is
embedded in ongoing networks of personal relationships. Jack, (2005 p. 1235) point out that
“the relevance of informal social systems for co-ordination and collaboration is also
emphasized within the network governance literature (Piore and Sabel, 1984; Powell, 1990;
Ring and Van de Ven, 1992; Snow et al., 1992), where contracts are perceived to be socially
rather than legally binding (Jones et al., 1997)”. Jack, (2005 p.1234-1235) says that
“basically, a social network can be thought of as the actual set of links of all kinds amongst a
set of individuals (Mitchell, 1973). Links such as friends of friends (Boissevain, 1974), group
obligations (Bourdieu, 1986) and strong and weak ties (Granovetter, 1973) can provide
privileged information, access to opportunities and enable individuals to obtain resources”.

According to Hoang & Antoncic, (2003) examination of entrepreneurial networks with
respect to its role in influencing the entrepreneurial process and outcomes has been an
emerging area of inquiry. Jack, (2005) opine that the ability to network effectively is a crucial
element in encouraging entrepreneurial activity and sustaining business development.
Numerous studies have echoed this finding such as (Birley, 1985; Chell & Baines, 2000;
Gulati, 1998; Johannisson & Mønsted, 1997) that the survival of the firm is dependent on the
entrepreneur capabilities to network (Brüderl & Preisendörfer, 1998; Tom & Willem, 2003;
Zhao & Aram, 1995); and that networks are a source of base crucial to starting and
developing a business. This viewpoint is notably important as it has been established that by



augmenting the entrepreneur’s own business resources, the network improves the likelihood
of success (Anderson & Jack, 2002; Brüderl & Preisendörfer, 1998; Jack, 2002; Johannisson,
1988; Johannisson & Mønsted, 1997;). Opportunity seeking and social relations therefore,
play an important role in establishing a firm (Ardichvili, et al.2003, Hite & Hesterly, 2001
Hite, 2003; Ellis, 2010) and its consequent development (Hoang & Antoncic, 2003; Jack et
al., 2008; Schutjens & Stam, 2003;). Additionally, entrepreneurs are provided with ideas,
opportunities and valuable resources through their social and professional networks. (Birely,
1985; Johannisson, 1988;). From the examination of the literature it can be concluded that the
links and ties of the entrepreneur within a network is crucial for success of any small business
and adoption of social media and subsequent impact on entrepreneurs would be the most
relevant and ideal setting to examine the issue of networks especially with reference to strong
and weak ties.

4.8 Contrary position on weak versus strong ties

The supposition has been proposed by Jack, (2005) that strong bonds are more important and
that through the strong bonds the entrepreneur activates it network to reach a particular
resource or information. This position is controversial and against position of existing
literature and studies performed by numerous authors. Jack, (2005 p.1235) finds that “most
network studies are characterized by the use and application of Granovetter’s strong and
weak tie hypothesis (for examples, see Aldrich et al., 1987; Hills et al., 1997; Marsden and
Campbell, 1984)”. According to Granovetter (1973, p. 1361) quality of relationship between
the actors in a network denote the strength of ties within a network. Strength of ties are
typified as strong and weak the diversity, homogeneity and heterogeneity of the ties have
impact on the action of individuals. Weakness or strength is measured in terms of the
frequency of interaction and Granovetter, (1973) proposed that a strong tie would be
contacted at least twice a week. Jack, (2010 p. 1236) observes that “this ‘closeness’ of
relationship does seem to be the most commonly used indication for measurement of tie
strength (see Erickson et al., 1978; Lin and Dumin, 1982; Marsden and Campbell, 1984;
Murray et al., 1981).”

A network should comprise of a mixture of strong and weak ties, since their basic nature has
impact on the structure and functioning of the network. (Granovetter, 1973; & Burt, 2004;).
The weak ties are diverse in nature in the sense that they are embedded within the
entrepreneur’s extended social network and act as agents or brokers of information transfer in



a wider range of networks such as a member of trade association or a friend of the supplier
etc. (Burt, 2004). Jack, (2005 p. 1235) opines that “hence, the value and strength of weak ties
is not related to the weakness of the relationship, but in the possibility of connections to other
social systems (Ibarra, 1993).” The argument between the importance of weak and strong ties
takes place on the basis of that strong ties offer number of benefits such as it is not expensive,
being on impersonal level from a known source it is more vivid, relatable, detailed and hence
can be trusted. (Granovetter 1992, p. 490 in Jack, 2005 p.1235) Negating this claim of
Granovetter, Burt, (2004) argues that the strong ties are expected to be placed in immediate
circle of the entrepreneur knowledge sharing will be quite limited to the small circle.
Whereas, weak ties with whom the entrepreneur is not in daily contact may be a specialist in
his field such as a tax consultant and may be activated on demand and information will be
sourced addressing the specific problem. Jack, (2005 p. 1235) in agreement with Burt says
that “the homogeneity of strong ties is thought to be less effective, breeding local cohesion
but also leading to overall fragmentation (Granovetter, 1973; Ibarra, 1993; Maguire, 1983)”.

Jack, (2005) qualitative investigation of 14 entrepreneurs revealed that strong ties were
actually the path to connect to the weak ties. This is explained in a diagrammatic form which
is reproduced in Figure 1.

Figure 1 Entrepreneur and network ties (Jack, 2005 P.1252)



According to Jack, 2005 entrepreneurs draw extensively from strong ties such as family,
personal links and employee links. Strong ties were responsible for providing links to a larger
social network which provided essential information about local markets, and localised social
information about employees, trends, and matter related to taxation, banking and accounting.
Moreover, Jack, (2005) doesn’t find any evidence on Granovetter’s (1973) strong tie based
on the number of times the entrepreneur discussed or made contact with a particular tie. It
was observed that entrepreneur had latent ties which could be initialised when necessary for
specific requirements. Instead of ties being weak Jack, (2005) found that “friends of friends”
(a term quite common in social media) acted as a secondary link developed and initialised
from the primary strong tie. The premise of the investigation was that the entrepreneur uses
his/her strong ties to initialise the network to draw information and resources in to the
business. As evident from the figure the strong ties in turn initialise the network and connect
the entrepreneur to a wider set of friends of friends to draw benefits from a wider social
network in to the business. However, Jack, (2005) refuses to acknowledge that it is not
possible for an entrepreneur to have strong ties who will always necessarily connect on to the
necessary contact or resource required for that moment.

Moreover, the diagram is an over simplification of the entrepreneur network even for a
representative version. Broader the network of an entrepreneur large the capabilities and
resources the business can gather! This seems to find agreement from Brüderl and
Preisendörfer, (1998) who argue that a broad and diverse network of an entrepreneur will
potentially lead gathering of resources which will be definitely superior then an entrepreneur
in a confined network. A number of authors like Granovetter (1973) and Burt (2004),
Johannisson (1988) argue that the ideal entrepreneurial network should contain both weak
and strong ties. Another view point on weak and strong ties has been brought in a recent
study by Slotte-Kock & Coviello (2010) which has been supported in earlier studies by
Larson & Starr, (1993) and Hite & Hesterly, (2001). These studies point out that the network
evolve with the entrepreneur and his/her firm following a life cycle approach. Slotte-Kock &
Coviello (2010) say that the life cycle of network development hovers between new and old
ties being selected based on a particular requirement and eventually these ties gain the status
of strong tie as long the utility exists and then eventually relegate themselves to being weak
tie. This argument is consistent with Larson & Starr, (1993) conceptual framework and the
organisational stages proposed by Hite & Hesterly, (2001). This conceptual framework is
depicted diagrammatically in Figure 2.



THE IMPACT OF SOCIALMEDIA ON ENTREPRENEURIAL NETWORKS

THE IMPACT OF SOCIALMEDIA ON ENTREPRENEURIAL NETWORKS

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