The Role of Social Networking in Entrepreneurship - Assignment Example

Role of social networks in entrepreneurship Name: Number: Course: Lecturer: Date: CHAPTER 1: INTRODUCTION 1.1 Background There is increased awareness that entrepreneurs will have to make use of social networks in corporate communications. For this reason, many entrepreneurs have been known to embed their business decision-making in social structures. This paper will research on the role of social network has when establishing an enterprise. We note that founding a business will need various contacts and resources in the various phases when establishing a business. In this paper, we study the use of social networks by an entrepreneur to establish a new enterprise. When establishing a new business, there is the use of social networks and network discussions in the early stages of business creation. We establish the way entrepreneurs use social contacts to get resources. It has been established that there are factors, which might distinguish entrepreneur’s networks in various organizations and countries. Social networks establish a relationships that are necessary to provide the right information and resources that are used in establishing the businesses. Entrepreneurs have ideas that they want to test but they would also need complimentary ideas that will boost the success rate of their ventures. Looking at social networks enables us to have an analysis on the relationship that exists between entrepreneurs and other people who will in turn provide the necessary resources that will be used in the creation of the new business ventures. In this case, entrepreneurs have the ideas that they would like to test and some knowledge and competence that is required to run the business. These entrepreneurs get support and knowledge from their social networks. They also get support and ideas from the various organizations and people who are found in the social networks in which they are affiliated with. Strategic business networking opportunities can be based on linkages and referrals enabled by relationships with business talented staff that offer other services to customers and, after this process is established, it could bring about win-win relationships that can lead to cross-referrals that are good for future business and alliances (Ball, 2005, pp. 36). A Petrusewicz (2003) point out that innovation is nurtured and people tend to attain success when they are in a diverse network with people who strive towards progress (Petrusewicz, 2003). One of the challenges experienced in this aspect is integrating the various strengths that come from the various players to attain a better mix. In social networking, highly competent and specialized people are connected by use of computers and other intelligent devices so that each of these individuals can contribute their specialized tasks towards the attainment of a big and complex task. Social networking is also seen to be supporting businesses, which are geographically dispersed but support each other as much as possible. Social networking helps to enhance embeddedness of knowledge and leads to synergistic alliances (Nielsen, 2005, pp. 1195). Collaboration and alliances can also be an undertaking of the organization where the business share risks, profit, control and introduction of innovation. New opportunities can be missed if a business is in a stable and comfortable alliance; it is also true that the process of changing the arrangement can be more complicated than to come up with a new alliance or going for an opportunity by itself. There are different reasons as to why alliances are sought by business; international strategic alliances are meant to overcome cultural differences and barriers that come with language and politics. Businesses may also opt to join a variety of alliances and thus making use of different resources at once thus making them realize various objectives at once. Social networking also presents the business with strategies opportunities where they might approach the partner so that they might gain an edge over the competition. This could be in the form of building bridges, filling gaps or even strengthening ties, which are found to be weak; in this regard, there will be better distribution between the competitors. This shows one example of strategic benefits that come with social networking. Social networking also increases flexibility with business production function; this is because of subcontracting that comes with social networking. Nielsen (2005) argues that the business, which has been connected using social networking, makes use of external production and outsourcing. One drawback that comes with outsourcing is when one chooses the wrong partner so that loss of control is evident. This can be eradicated by ensuring that there are clear boundaries when the activities are diversified. Businesses, which adopt in-sourcing business structures will attempt to produce their own needs by way of producing what they deem, fit. Staff are assigned to various sections where they will perform various functions in those internal units in which they have been assigned; in most cases, the staff perform similar roles. Industries, which are highly competitive will most likely to internalize business operations especially in cases where information is highly classified and the use of partnerships, might lead to loss of the competitive advantage of the business (Petrusewicz, 2003). Entrepreneurship and opportunity recognition For entrepreneurs to have a competitive edge, opportunities need to be there. Having divergent views of the available resources and market demand is what distinguishes opportunities. A market whereby everyone has the same understanding and valuation of the resource has not exploited the relevant avenues successfully. Entrepreneurial opportunities therefore can be defined as a way through which new means of action with regard to market, and resources are approached. The creativeness of an entrepreneur defines the opportunities that are at disposal to his or her business. The laws of economics do not have to be changed in order to recognise these opportunities, however, altering the same results in to plenty of opportunities (Petrusewicz, 2003). Opportunity An Opportunity in a large perspective attempts to meet a market need by way of combining resources to achieve a worthy value in a creative manner. It has the qualities of being attractive, durable, and timely. It can also serve as a product or service that creates or adds value for its buyer or end user. Entrepreneurs identify business opportunities from a business idea to come up with a valuable value to the stakeholder in a probable business venture while it is fair to say elements of opportunities are recognized, opportunities are made from Ideas, which is to say not all Ideas can be an Opportunity. Therefore, an understanding of how to recognise an opportunity from an Idea serves as a stepping-stone for an entrepreneur (Petrusewicz, 2003). Role of social networks in entrepreneurship Human beings are among the most social living things on earth. The ability by humans to learn and associate with each other in a harmonious manner has contributed to the success and to the advancement in many sectors of the world economy. Man is able to share knowledge with one another in a manner that is devoid of technicalities. Social networking has in the past and is still used by man to improve the information penetration in to different parts of world population. Knowledge fostering has been achieved through this networking (Nielsen, 2005). The prospects of using social networks in starting new enterprises are seen to benefit a great deal with social networking platform. As the entrepreneurs go to work, they will benefit from social networking, as they will interact as they go to work. One advantage of this is that they might chart some office issues and therefore help to solve an issue that could have to be scheduled for it to be solved in the company (Petrusewicz, 2003). Internet was introduced for public and commercial use in the early 1990,s. Initially, it was developed for military purposes only; therefore, the research that spearheaded the same was done secretly by the military. The concept of social networking using the same platform was not yet conceived; however, the major concern was for data transmission to be done effectively, through a secure means. The early precursors to internet were the telex and the telephone machines. These platforms did not offer much in the prospects of social networking; therefore, less development was done with regard to social networking. In 1950’s and 1960’s, the development of mainframe computers was done, they were later to prove useful in communication from point to point. A lot of research was done at the time focussing mainly on packet switching technologies, which enabled safe transfer of data from two different points. In itself, this breakthrough would assist many social networking companies in realization of efficient and effective transfer of data to the intended ground (Petrusewicz, 2003). The ever-changing market demand for business has been kept abreast by the ever changing and flexible nature with which human beings communicate. When instant electronic mail messages took root in 1990’s, it was thought to be the best form of instant communication that there would be. Lately websites like facebook.com, myspace.com, twitter.com and you tube have become major networking services used by millions of people to connect with others every day. The instant communicative services, which include messaging, video and image applications plus many other multimedia applications offered by these sites, enable them to be the best plat form for a variety of applications (Petrusewicz, 2003). References Atif, Y, Elnaffar, S., & Al Falahi, K. 2010, ʻSocial networking: Challenges and new opportunitiesʼ, Al Ain: United Arab Emirates University Press. Ball, L 2005, ‘Networking is the buzzword for referrals’, Air Conditioning, Heating & Refrigeration News, Vol. 225, Issue 2, pp. 36. 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