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The Effects of Social Networks on Firm Performance - Research Paper Example

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This research presents some facts and discussions in relation to social networks and social capital and their effect on firm performance based on the following literature review. This report focuses on the performance of a firm through managerial decisions from the perspective of social networks…
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The Effects of Social Networks on Firm Performance
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"The Effects of Social Networks on Firm Performance"

Download file to see previous pages The paper tells that in the field of product development the inter organization networks can be very effective for the joint discussion about the product. Many new and small firms have lack of resources for the development, mainly due to inexperience and a lack of goodwill. Thus as a way of competing and grabbing a foothold in such a scenario involves bootstrapping, which involves activities for securing funds and resources. By using social networks such companies can gather finances, by building up strong ties in the initial stages and later on weak ties as they grow big. CEO’s of different firms have been known to have taken advice from outside through social networking. In this way they seek to get an outside opinion and an altogether different perspective regarding certain strategic issues. These enhance the performance of the firms. Another important aspect which is emerging slowly is the concept of a local social capital where an individual who values more of his local contacts, even though he has global contacts. This is relevant mainly in case of local entrepreneurs. Thus according to scientists, people with more and better social capital will be able to realize their goals. Ranging from contracts to building goodwill and securing finances, social capital is the priority in all types of endeavors around the globe. Social ties have been found to regulate exchanges through an informal and interpersonal way and they help to push back the limitations of a weak infrastructure, especially in the case of a financial crisis. (Sheng et al, 2011, p. 1). The study is to provide several facts and discussions in relation to social networks and social capital and their effect on firm performance based on the following ...Download file to see next pagesRead More
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