Informal Networks (‘personal network perspective’)They are comprised of business
interactions based on trust, friendship or family relations and focus on entrepreneurship
as embedded in a social context, channelled and facilitated or constrained and inhibited
by people’s positions in social networks (Aldrich and Zimmer, 1986). Individual
contacts of the entrepreneur explain the entrepreneur’s behavior in improving his/hers
business skills. They shape an autonomous field of information, which adds to the
entrepreneur’s training, and work experience. Personal networks are considered as
central canals for accessing information. Information that is often useful, exclusive and
valuable as they might come from distant and different parts of the social system
(Granovetter, 1974,1985).
What is more, both customers and supplier can get involved in the social networks.
Friends and acquaintances, ‘used’ as customers, can spread information on the firm via
their own networks and thus help to the success and growth of the enterprise. As a final
point, there is a possibility that network contacts expand the financial basis of a firm. In
particular informal credits obtained from family or friends are helpful in the starting
stage of the enterprise. The family network is a special social network type that is of
great importance for the periphery. It admits employees recruited from the family and
gives emotional support (Bruderl & Preisendorfer, 1998). In addition, when family is
employed, the entrepreneur doesn’t have to make a big effort to control workers.
Finally, emotional support given by the spouse could be very supportive to maintain
emotional strength (Jenssen, Koeing,2002). Moreover, although several researchers
stress that informal (weak ties) networks are important for receiving the necessary
information, many have also pointed to the significance of other network features for
access to resources other than information (Dubini&Aldrich, 1991; Johannisson, 1988).
Entrepreneurs have been found to use the help available within their local networks
during the period prior to start up and approach formal sources when the elements of the
firm are set (Birley,1985).
2.4 Other Network Characteristics (Network Length and Strength)
The strength of network use may determine the business’s performance. A wide range
of studies, that are reviewed below, argue that there are certain effects from the strong
or weak use of networks by businesses. At this point we should avoid, yet another,