Unravelling Small Business Owner/managers’ Networking Activities Youness Alizadeh Southern Cross University Introduction Entrepreneurship is a dynamic process requiring linkages between key components as noted by Aldrich and Zimmer (1986, p.3). The limitations, inherent in the nature of traditional approaches, have led the way to approach entrepreneurship as embedded in a social context, channelled and facilitated or constrained and inhibited by people’s positions in social networks (Aldrich & Zimmer, 1986, p.4). Hence, comprehensive explanations of entrepreneurship must include the social context of behaviour, especially the social relationships through which entrepreneurs obtain information, business resources, and social support.

The rapid development and the widespread nature of the ‘network’ and ‘networking’ phenomenon has been attracting considerable attention in the management and entrepreneurship literature (Aldrich & Dubini, 1991; Birley, Cromie, & Myers, 1991; Johannisson, 1993; Butler & Hansen, 1991; Jarillo, 1989). Burt (1983) suggests that an entrepreneur should bring at least three kinds of resources to the business. First, the entrepreneur requires financial resources: cash in hand, deposits in the bank, lines of credit. Second, the entrepreneur needs human resources: natural abilities - charm, health and intelligence - combined with skills acquired in formal education and job experience. Third, the entrepreneur’s relationships with others are social resources: through friends, colleagues, and general contacts entrepreneurs receive opportunities to use their financial and human capitals. Burt (1983) concludes that through relations with colleagues, friends, and clients come the opportunities to transform financial and human resources into profit. In simple terms, entrepreneurs must establish connections and make regular contacts with numerous parties inside and outside their business.

Conceptual Model While networks in general define the type and totality of relationships between people and organisations, however, within the context of small business with its centralised and independent style of management, such networks are very much centred around the personal contacts of the owner/managers (Carson, Cromie et al, 1995). Small business owners’ personal networks play significant roles in maintaining the entrepreneurial efforts of those managing the enterprise’s development from its pioneering days of intuitive management through subsequent periods of greater structure and control.

To this end, small business owner/managers’ networking activities can be seen as activities in which owner/managers build and manage personal relationships with individuals in their environment. The focus of small business owner/managers’ networking activity lies in providing them with a consistent supply of resources for sustainable growth of the enterprise. Small business owner/managers’ lists of requisite resources can be endless. In addition to finance, physical resources, such as plant and equipment, adequate human resources, and knowledge and information are

essential. Finding those resources and persuading those who own these to place them at the disposal of the owners, is a critical aspect of owner/managers’ networking activities. In order to make a match between an opportunity and the necessary resources, small business owner/managers need to employ all their persuasive and political skills to encourage individuals who are more resourceful than they are to share with their valuable resources.

There have been many contributions from various authors (Birley, Cromie, & Myers, 1991; Falemo, 1989; Butler & Hansen, 1991; Johannisson, 1986; Jarillo, 1989) on network typology. However, the problem with some contributions from these authors on network typology is that they attempt to draw elaborate nodal diagrams to illustrate the strength of network ties and the different types of ties that exist within the network. Yet such illustrations do not necessarily aid the task of network analysis in terms of the extensiveness of a network and are merely the symbolic representation of actual relations, usually based on personal belief rather than ethnographic and/or qualitative evidence (Blackburn, Curran, & Jarvis, 1991).

Related to the idea of networks as dynamic phenomena, the model of networking as a ‘continuum’ based upon epistemological grounds is seen as particularly relevant in the context of small enterprises, since these enterprises are wholly dependent on their owner/managers’ personal contacts (Blackburn, Curran, & Jarvis, 1991). A much neglected aspect of the study of small business networks and networking is the motivation of the owner/managers in relation to participation in networking activities. For example, it has been suggested that growth-oriented small business owner/managers will be more outward looking than those with fewer ambitions for growth and this will manifest itself in time and resources devoted to networking, as well as diverse network relations (Butler & Hansen, 1988; Aldrich & Dubini, 1991). Yet beyond such observations, the owner/managers intention to participate in networks is rarely explored.

Thus, network participation by entrepreneurs within the small enterprise context may be seen on a continuum (Figure 1). It involves depicting owner/managers’ network relations as ‘involuntary’ at one end and ‘voluntary’ at the other. The former (involuntary) includes suppliers, customers, and employees - all needed for survival and existence. At the involuntary spectrum is compulsory participation in some kinds of external relations. All businesses must have exchanges with the environment in order to gather resources and market products and services. Therefore, networking relations composed of employees, customers, and suppliers are at some minimal level, involuntary. Although the owner/managers have some choice over suppliers and customers, if the business is to remain a going concern and solvent, such relations must exist. With further development and maturity of business, a progression is made along the continuum, voluntary participation in networking activities (with family, acquaintances, community, trade associations, chamber of commerce, other organisations, brokers, clubs and government support networks) becomes the norm, supposedly linked to the entrepreneur’s motivation and personal aspirations.

Figure 1 - Small Business Owner/managers’ Networking Continuum

INVOLUNTARY NETWORK PARTICIPATION

Suppliers Partners Customers Employees Accountants Banks Solicitors

VOLUNTARY >>>>>>>>>>>>>>>>>NETWORK PARTICIPATION

Family Acquaintances Community Trade Associations Chamber of Commerce Other Organisations Brokers Clubs Government Support Networks

Source: Adapted from Blackburn, Curran and Jarvis (1991).

The development of a new conceptual model (Figure 1) which attempts to integrate the motivational aspects of small enterprise owner/managers’ participation in networking activities leads to the research question which is concerned with voluntary and/or involuntary aspect of small enterprise owner/managers’ participation in networking activities.

Research Method While quantitative methods are useful in eliciting the frequency of contact between entrepreneurs and parties external to the small enterprise, little evidence is gained on the significance and content of such relationships. Therefore, to answer the research question, qualitative methodology using case studies has been selected as a more appropriate research paradigm to understanding the actual motivation of owner/managers in participating in networking activities.

Qualitative research implies an emphasis on processes and meanings not measured in terms of quantity, amount, intensity, or frequency. However, it permits the researcher to study selected issues in depth and detail. Qualitative research methods involve the collection of contemporary phenomena such as perceptions and motivations which are often ‘unobservable’ (Hunt, 1991). Since only ‘observable’ phenomena can be researched by positivism (quantitative) research paradigms, the paradigm of ‘critical realism’ (qualitative) rather than positivism is a more appropriate research paradigm for studying external world phenomena such as inter-organisational links, inter-personal relationships, and participation in networking activities (Alizadeh, Perry & Riege, 1997).

‘Networks’ and ‘networking’ are analytical constructs, not finite entities directly observable in the day-to-day interactions between the small enterprise owner/manager and the outside world. Such constructs may be based on a large number of possible ‘hooks’ such as locality, business activity, kinship, ethnicity, technology, size of business, gender, age, formal education and business training (Blackburn, Curran, & Jarvis, 1991).

The number of multiple cases in this research was selected to provide the replication logic (Yin, 1994; Patton, 1990) by contrasting results for predictable reasons (theoretical replication). Given all the arguments raised by these various researchers and having theoretical replication logic at the core of the research design, a settlement was made for two groups (ethnic owners/managers versus non-ethnic owner/managers) of ten cases. Two groups of cases were selected based on the ethnicity since the literature (Aldrich and Zimmer, 1986; Light, 1972; Hisrich, 1987) suggests that the networking activity of individuals are expected to vary according to their personal attributes such as age, gender and ethnicity.

The rigorous and thorough application of case study methodology suggests that multiple case studies are desirable and the cases can be selected on the basis of replication logic (Yin, 1994). The underlying principle in selecting multiple cases was to select ‘information rich’ cases with ‘maximum variation’ (Patton, 1990). A case study protocol was developed to assist in delineating the boundaries of the research effort during the data collection stage (Yin, 1994). The research gave consideration to obtaining theoretical replication which is referred to as obtaining different results for predictable reasons (Yin, 1994). Hence, the number of multiple cases in this research was selected to provide the replication logic by contrasting results for predictable reasons (theoretical replication). The cases were also purposely selected to be ‘information-rich’ cases as they were based on the researcher’s prior knowledge of the owner/managers and their business.

Once the decision had been made for two groups of cases, one with owner/managers of ethnic background and the other with non-ethnic owner/managers, cases were carefully selected for each group. According to the literature (Aldrich and Herker,1977; Shrader, Lincoln, and Hoffman, 1989), it was expected that the organisational attributes (such as a small enterprise’s size, maturity, and task) as well as personal attributes of owners ( such as age, gender and ethnicity) would influence the networking activities of small enterprise owner/managers. Therefore, the number of cases included in each group was selected to provide for variables highlighted by the literature in order to have ‘maximum variation’ among the cases. As illustrated by Table 2, ten cases in each group (ethnic versus non-ethnic) allowed the researcher to have access to cases with female, male, young (age< 37 years old) and mature (age> 55 years old) owner/managers who were involved in small enterprises operating in manufacturing, non-manufacturing (retail), very small (non-employing), small (employing), young enterprise (operating less than 5 years) and mature enterprise (operating more than 15 years). Table 1 indicates that the resulting group of twenty entrepreneurial small enterprises were highly diverse cases.

Table 1 - Theoretical Replication for Case Selection Theoretical Replication

Ethnic Cases

Female owner/manager Male owner/manager Old owner/manager (age > 55 years old) Young owner/manager (age <36 years old) Manufacturing small enterprise Non-manufacturing small enterprise Very small enterprise non-employing enterprise Small employing enterprise (employment > 10) Mature enterprise (operating more than 15 years) Young enterprise (operating less than 5 years) Total cases

Case T Case A Case J Case R Case D Case P Case H Case G Case Q Case F 10

Non-ethnic Cases Case M Case B Case S Case C Case O Case K Case I Case N Case L Case E 10

Source: developed for this research.

Data was collected in this study through in-depth interviews of ethnic and non-ethnic small enterprise owner/managers on the North Coast of the State of New South Wales (Australia) using the interview protocol developed for the research. This study was based on field interviews conducted by the author between February and November, 1997. The interviews formed the core of a research project designed to look in detail at how twenty small enterprises owner/managers willingly participated in networking activities in an attempt to gain access to fundamental business resources. Over forty interviews were conducted with owner/managers to discover the voluntary and involuntary aspects of their networking activities. Interviews with owner/managers were conducted at the respective small enterprises, with follow-up questions explored with a combination of face-to-face interviews and follow-up telephone conversations. The data collection included forty-five interviews, averaging three and a half hours each.

Empirical Results In discussing small enterprise networks and networking, it was highlighted that involuntary characteristics of owner/managers’ networking activities were often neglected with all networking participation seen as a positive activity on the part of small enterprise owner/managers. Therefore, ethnic and non-ethnic small enterprise owner/managers were asked a series of questions in order to explore whether small enterprise owner/managers were proactive and keen participants in networking activities.

Tables 2 and 3 were prepared (Miles and Huberman, 1984) to report small enterprise owner/managers’ overall participation in networking activities. Therefore, types of networking activities with contacts of a business nature, family, acquaintances, community, trade associations, chamber of commerce, government departments, other organisations, brokers, and clubs were identified from case studies that were emphasised by small enterprise owner/managers to develop linkages with the wider economy and society. Tables 2 and 3 illustrate how much networking activities were undertaken by each case and key under the tables show the meaning of cell entries.

Tables 2 and 3 further show small enterprise owner/managers’ involuntary involvement in relationships of a purely business nature (partners, suppliers, customers, employees, banks, accountants, solicitors) and voluntary participation in networking activities with family, friends and acquaintances, community (ethnic as well as non-ethnic), trade associations, chamber of commerce, government agencies (federal, state, local), other organisations and competition, brokers, and clubs (social, cultural, political, professional) that were emphasised and were proactively sought by nonethnic as well as ethnic small enterprise owner/manager to manage their businesses.

Table 2 - Non-ethnic Owner/managers Participation in Networking Activities Cases S N O L M B K C

I

E

Network Score 10 8 4 4 8 4 3 8 2 4 55 5.5

Contacts of business nature • • • • • • • • • • Family • • • • • • • • Acquaintances • • • • Community • • • • Trade associations • • • • • • • • Chamber of commerce • • • • Government departments • • • Other organisations • • • • • • • • Brokers • • Clubs • • • • Total networking score 8 10 7 5 7 6 5 2 3 2 Group median 55/10 Cases Source: Field notes and case study interviews. • As a result of interviews recorded as significant participation in networking activities. as 1 point assuming equal intensity and participation as a result of interviews recorded. Blank Computed as 0 indicating no participation in networking activities.

And computed

Case S’s business network was heavily geared toward business acquaintances, who happen to have big networks of their own. It was a male oriented industry, but there were two female staff in the company. In addition to Case S’s family, a few friends and business related contacts of customers, suppliers, the accountant and bank manager, Case S utilised trade shows and journals and customers to obtain information. Although there was not a written contract, Case S had a longterm and strategic alliances with other business organisations in power transmission and heat engineering in Australia and overseas and was an active member of the Metal Traders Industry Association (MTIA). Case S was an active member of the Chamber Of Commerce and used brokers who helped him to break into power transmission and heat engineering industries. Case S’s alliance with some brokers helped him to learn about the demands of the organisations who were the major suppliers of the Case’s previous employer. These suppliers effectively became Case S’s customers after he left the company and started the current business. Case S had been on two ‘standards’ committees and cooperated with relevant government departments whenever it was necessary.

Like Case S, Case N was a keen participant in networking activities. Case N’s network was made up of several strong ties and many diverse contacts. Case N’s business network members had a diverse personal network of their own. Case N described the personal contact network as:

‘There is a family network, my wife says family alone is not enough. You must have trust in the employees. It is a group that took 8 to 12 years to build. Another group in the last 3 to 4 years have emerged who will be around for a long time to come. There is definitely a prominence of males, but the preference is women such as the marketing manager. They are generally 55 to 65 years old and I would see them twice a month. It is so variable, but I still consider them a good advantage. They are a mixture of family and business acquaintances.’

In terms of the communication networks to seek information, Case N interacted closely with the Chamber of Commerce, Australian Business, Austrade, trade associations and journals, marketing people in Sydney and the US, trade exhibitions worldwide. Case N had a long-term and strategic alliances with many organisations and distributors in Australia, New Zealand, Europe and the US and tea tree growers organisations. Case N had pro-actively worked with consultants and sought the assistance of several brokers in the US and UK in order to break into American and European markets. Case N was an active members of the Northern Rivers Performing Arts Association and a keen supporter of the performing arts in the local community. Hence, Case N was seen as a positive networker who was willing to participate in networking activities with family and friends, community, business related organisations, information networks and had strategic alliances with national and international organisations.

Like Cases S and N, Case O participated actively in networking activities in order to maintain the business’s viability. Case O’s relationship revolved around business dealings and purely shared business and trusting relationships, although Case O found it very difficult to work with people who did not meet his perfectionist standards. Apart from the family members and business related contacts, Case O had long-term and strategic alliances with other small enterprises to buy and transport material such as timber and had created a network of distributors who sold quality stools and chairs manufactured by Case O. Case O was an avid learner and researcher to obtain information and an active member of the local chamber of commerce, chamber of manufacturers and was heavily involved in community activities. Case O was on the board of the local Business Enterprise Centre in Coffs Harbour and local gliding club, was actively involved with environmental groups, was a member of the Arts Council of NSW and an active member of the gliding club.

Case L’s personal business network was made up of family members, a few friends and business related contacts. The members of Case L’s business network were male in their late 30’s, a mixture of all types of people, family and friends, who had been known to Case L since 1970. Case L discussed business with them frequently. Case L obtained business information networking with the Australian Institute of Engineers, chamber of commerce, attending trade exhibitions, and searching journals and had a long-term working relationship with the timber industry for gaining access to potential customers.

Like Case O, Case M was active participant in networking activities in order to maintain business operations. Apart from

family and business acquaintances, Case M interacted with many diverse organisations and the businesswomen’s community. Case M was heavily involved in the businesswomen’s community and was an active member of the Women’s Network Australia and Byron Bay Businesswomen network. Case M relied upon trade associations, exhibitions and journals for information and had long-term relationship and closely worked with NRMA (National Roads Members Association), tour and cruise operators and businesswomen’s network to enhance the sales. Case M supported just about every community activity (from children to disabled) and was the deputy chairman of the Regional Tourist Organisation (RTO). Case M was a member of Byron Bay Business Women’s association, and Women’s Network Australia.

Case B was a keen networker. The people in Case B’s network actively participated in networks of their own, were men and had known each other very well. Case B’s network members were self-employed men, aged around 40 years. Case B kept in touch with the members of network frequently and had known them for at least 20 years (went to school with them). Case B believed that the members of his network had contributed significantly to the growth and profitability of the business by providing new ideas , but Case B always made the final decision. Case B’s network was dense in a sense that he had a lot of strong ties such as family and acquaintances to provide him moral, social, and psychological support. In addition to family and friends and business exchange relations, Case B had many diverse contacts with clients, NRMA, and government Tourist Information Centres to provide with information and worked closely with other organisations, such as coach and tour operators, NRMA Travel, and RACQ (NRMA’s Queensland counterpart) to enhance the competitive position of the business. Because of the family and having knowledge of the key players and brokers in the local property development industry (Case B used to work for the local council), Case B was involved in buying and developing property in the area and some other states.

Like L, Case K’s business network was mainly comprised of family members and a few business related contacts such as the representatives, accountant, suppliers and customers. Most of Case K’s network members knew each other well, were male, aged between 35 and 55, and saw and discussed business quite frequently. Case K relied upon trade fairs and journals to obtain information and had a long-term and strategic alliance with the Associated Retailers network for buying stocks. Case K was an active participant in many sports and cultural activities of the local community in order to keep the name up front. In contrast to a sole trader, Case K thought since they were a large retail business, therefore they could handle things on their own without networking.

Cases C, I, and E were the only cases who relied heavily upon contacts of a business nature. Members of Case C’s network were married men aged between 30 and 40 years old, who knew each other and happened to participate in networking activities of their own. Case C had known them for at least 10 years up to 20 years. Case C had no strategic alliances with other organisations, nor had any involvement in the community activities and for acquiring information relied upon suppliers. Case C’s network was basically made up of his parents (who founded the business) and business related contacts such as suppliers, accountants, customers and the bank manager. Case C considered these relationships

important because:

‘I get feedback on feelings in the community or economy, what are their ideas, how they would improve things. It gives you ideas yourself and is always nice to hear how other people are going.’

Like Case C, Case I’s business network was comprised of business related contacts, such as suppliers, accountants, and the bank manager. In general, Case I’s network members were self employed and discussed business frequently. In addition to suppliers, the accountant, and the bank manager, Case I relied upon trade journals and trade shows to keep up to date with the developments in the field. Case I had a good working relationships and cooperation with competition and other printery houses who often referred jobs to each other.

Like Cases C and I, Case E’s business network was made up of business related contacts, such as suppliers, customers, accountant, solicitor, and the competition. Case E relied upon suppliers to obtain information and was actively involved in the local golf club, from which most of the business contacts and customers emerged.

Table 5 provides further insights into the key findings regarding the ethnic owner/managers’ participation in voluntary and involuntary networking activities. Table 3 - Ethnic Owner/managers Participation in Networking Activities Cases J Q D H T G F

R

A

P

Network Score 10 8 7 7 8 2 2 4 3 5 56 5.6

Contacts of business nature • • • • • • • • • • Family • • • • • • • • Acquaintances • • • • • • • Community • • • • • • • Trade associations • • • • • • • • Chamber of commerce • • Government departments • • Other organisations • • • • Brokers • • • Clubs • • • • • Total networking score 9 8 7 8 5 4 3 5 4 3 Group median 56/10 Cases Source: Field notes and case study interviews. • As a result of interviews recorded as significant participation in networking activities. as 1 point assuming equal intensity and participation as a result of interviews recorded. Blank Computed as 0 indicating no participation in networking activities.

And computed

Case J was an active participant in networking activities in local business and ethnic communities and had diverse business interests with some close family ties involved in the business. The people in Case J’s personal contact network were mainly self-employed, happened to be either family or business acquaintances (50%), and knew each other well. Case J, as the leader of the local Italian community, had been very instrumental to network with other organisations in

order to establish the New Italy museum in the Northern Rivers area. In addition to family, friends and several business and community related contacts, Case J was an active member of local the chamber of commerce, institute of real estate agents, Continental Museum Club, an active member of several social clubs, AITA and several other trade associations to obtain information. Case J had a series of long-term relationships with other Italian companies, brokers, and local business organisations to enhance the strategic position of his business. Case J was a part of the Richmond River Historical Society and the president and heavily involved in the Italo-Australia Club. Case J had been instrumental in establishing the New Italy Museum, where almost 100 years ago the first Italians arrived in Australia. Case J had successfully negotiated with the management of the World Expo in Brisbane to get them to donate the Italian Pavilion to the New Italy Museum in 1988.

Case Q was a positive and keen participant in many informal networking activities. Case Q had known the people in his network for 7-10 years. They were mostly male aged between 35 and 55 years old, self employed, and made up of friends and business acquaintances and contacted each other frequently. In addition to family, a few friends and contacts of business nature, Case Q also had extensive communication and strategic networks. For information, Case Q relied heavily on the Australian Business and trade shows and journals. Case Q did network with the opposition and used to interact with other small enterprises to buy leather in order to take advantage of the economy of scale. Although there was not a community of people who were born in the US in the area, Case Q had a close relationship with the European community in the North Coast and currently employed three people who were born in Germany and found they shared similar work ethics. Case Q was also a keen member of the local surfing community.

Like Case J, Case D was an eager participant in networking activities with local business and the Italian community. The people in Case D’s network were also keen networkers who knew each other well, because they were locals. Case D had known the members of his network for at least 20 years, who were mostly self-employed male or employed persons and aged between 42 and 50. Case D’s relationships with network members were a mixture of friendship and business acquaintances. Therefore, Case D respected them as friends after hours and kept in touch with network members once or twice a week, depending on the situation. Case D was an active member of the local Italian community and heavily involved in the Italo-Australia club. In addition to family, friends and community members, Case D was an active member of the Master Builders Association and obtained information through the business relationship with the accountant who was affiliated with the Chamber of Manufacturers. Case D had long-term association with a national franchise company to fit beauty saloons and networked with an experienced broker to further his business opportunities. Case D was also involved with local builders and property developers in several joint ventures. Case D considered the relationship with network members very important and said:

‘I hate it if my accountant one day packs up and moves to Perth, for example, because we built up confidence and it is hard to develop confidence again with others.’

Like Case Q, Case H was a keen networker who actively participated in networking activities with local business and Greek communities. He was described by the members of the local community as the ‘Lismore Icon’. There were people from all walks of life, ethnic and non-ethnic as well as family and friends in his network. The people in Case H’s business network knew each other and were active participants in networking activities too. Case H had known the people in the business network for at least 30 - 40 years. They were mostly self-employed male of 40 - 60 years of age and Case H described the type of relationship as friendship. Case H was the head of the local Greek community, a member of the Gold Coast orthodox church and the International Greek Brotherhood network and was heavily involved in the local community activities through his membership of the Rotary club. Case H was an active member of the Chamber of Commerce and attends industry related conferences and exhibitions and reads the local and national press, as well as trade journals to keep up with the latest information. Case H networked with other arts supplies retailers through the newly established buying network. Case H served in the Australian army, had a long lasting relationship with the local council and was expected to be elected as the mayor of Lismore if he would have run for the office. Case H was concerned with the form and content of the business relationships and stated:

‘My business is to make them say good things about me. If the customer is a good customer, I bring them home. If I have trouble, I don’t bring them home.’

Case T did not only participate in external relations to gather resources and market products and services, but was also actively involved in the local community and business activities. Although Case T had many female friends, the people in the business network were mostly male of 35- 45 years of age, had been known to her in the last 10 years and were self-employed. Case T described the type of the relationship as partly friendship and business. Case T had no family members in Australia, but relied upon the local Chinese, Thai and Indian community for support. Although Case T did not have long-term relationships with other business organisations and the opposition to enhance the strategic position in the market, but she relied upon Business Enterprise Centre and Northern Rivers Legal Aids, the local multicultural community, several social and cultural clubs and associations, and a women’s business network to gather information and seek help.

Case G’s business network was basically composed of family members and business related contacts of suppliers, customers, the accountant and bank manager, who knew each other well. Case G described the members of the business network as self-employed male persons who were elderly and had known each them for more than 20 years. Case G acquired the information needed by attending trade sponsored activities and visiting other restaurants and had a longterm relationship with other local Chinese community to further the business prospects.

Case F’s business network was mainly comprised of family, a few members and contacts of the business relationship such as the suppliers, accountant and the bank manager. Case F’s networking activities were fairly limited because his network relations were composed of suppliers, customers, and employees. Case F was born in Australia of Greek parents

and had no serious contacts with the local Greek community and the core of the business network was made up of the accountant, his son and partner. Case F travelled and attended trade shows and exhibitions to acquire information and had no long-term or strategic alliances with other business organisations in order to remain competitive.

Like Case T, Case R was also a positive participant in networking activities but to the level required to maintain the business’s viability. Case R had known the members of the business network ever since living in the area. They were mostly male, aged between 40 to 50 years old and were made up of family and business acquaintances. Case R had a close relationship and involvement with the local Indian and Sikh community in Woolgoolga who contributed to a fair slice of the business. In addition to family members, a few friends and contacts of a business nature such as suppliers, the accountant, and the local bank managers, Case S relied upon representatives to acquire information. Case R had no longterm relationships with the opposition or other business organisations to enhance the competitive position of the business, but was an active member of several local sports clubs. Case R believed:

‘Everyone knows each other. It is a small town and their network would be similar to mine.’

Members who were keen networkers make up the Case A’s network. Case A’s network members were male in their fifties who had professional occupations in government, as well as private sector. Case A had known the network members at least for 16 years and discussed business with them once or twice per month. Case A stated that the network members had contributed significantly to the growth and profitability of the business to date. Unlike traditional Chinese family enterprises, Case A had a very diverse network with many weak ties and relied upon many acquaintances. The communication networks of several business associations, major agricultural equipment suppliers, department of agriculture, the Internet, and trade exhibitions and the relevant research literature were utilised by Case A to obtain information. Case A had a long-term relationship with the Chinese government in several provinces and kept in touch with other organisations by attending agri-food business related conferences and short courses at several universities.

Case P participated in networking activities, only to the level required to maintain the business’s viability. However, since Case P was involved in importing goods from overseas suppliers with many international business operations and had to network with many parties in order to gather resources and market his products. People in Case P’s business network knew each other and had a big network of their own and stated:

‘I have known them for at least 3 years, the majority are male associated with the industry, but the customs agent is a female. I find her quite easy to deal with her. There is a mixture of relationships being either friendship or business. With a friend I got caught once but generally there is a pretty good working relationship. It is all strictly business. I talk to some almost every day, but the banker I would only talk to if I had to.’

Apart from family members, a few friends and contacts of business nature such as suppliers, the accountant and bank

manager, Case P had a network of sales representatives who were actively involved in promoting products. Case P also worked closely with a network of bicycle distributors who were involved in retailing high quality mountain bikes. Case P had a long-term relationship with suppliers from Italy through his family relationships, Canada, the US and Taiwan and worked closely with the opposition in promoting the bicycle industry and lobbying with government agencies. In order to obtain information, Case P relied upon variety of bicycle trade exhibitions and journals.

As Table 4 illustrates, the research findings are not entirely within the expectations of theoretical replication, as there does not seem to exist significant variations between ethnic owner/managers and their non-ethnic counterparts, since both groups appear to be somehow equally interested (as their networking scores show in columns 2 and 3) in participating in networking activities with business contacts, family, community, acquaintances, trade associations, other organisations, brokers, clubs, chamber of commerce, and government departments. However, further comparison of research findings reveal that, although ethnic small enterprise owner/managers are very similar to their non-ethnic counterparts in participating in networking activities, with business exchange networks (score=10), families (score=8), community (score=7), trade associations (score=8), chamber of commerce (score=2), government departments (score=2), brokers (score=3), and clubs (score=5), a clear pattern emerging from case studies shows that ethnic owner/managers rely more on their business acquaintances (score=7) than cooperating with other organisation or competition (score=4), which happens to be the opposite among non-ethnic owner/managers (acquaintances score=4 and other organisations score=8).

Table 4 - Small Business Owner/managers Participation in Networking Activities Networks Ethnic Owner/managers Non-ethnic Owner/managers Network Scores Network Scores Contacts of business nature 10 10 Family 8 8 Acquaintances 7 4 Community 7 4 Trade associations 8 8 Chamber of commerce 2 4 Government departments 2 3 Other organisations 4 8 Brokers 3 2 Clubs 5 4 Total network score 56 55 Group median 5.6 5.5 Source: Tables 2 and 3.

Although the data analysed in matrix form (Tables 2 and 3) provided categories of networking activities in which ethnic and non-ethnic owner/managers were involved, something more spatial is needed to explore how cases ‘cluster’ and how clusters relate to each other. Scatterplot logic (Miles & Huberman, 1984) was employed to achieve this task (see Figure 2). Data from each case are carefully scaled, employing ‘summed indices’ to calculate ‘total networking score’ for each case (Tables 2 and 3, row 12) and laid out in the space formed by respective axes, so that some determination of

similarity and contrast between cases in ethnic and non-ethnic group can be made. Owner/managers’ participation in networking activities is represented by the vertical axis with voluntary participation in networking activities at one end and involuntary network participation at the other. The position of each case is displayed by a black dot according to the scaled ‘total networking score’ calculated for each case in row 12 of Tables 2 and 3. Figure 2 shows the primary clusters of the cases and illustrates the position of ethnic owner/managers versus their non-ethnic counterparts in terms of their participation in networking activities for overall management of small enterprise.

Figure 2 - Small Business Owner/managers Participation in Networking Activities Networking Activities

Voluntary •

10 primary cluster of ethnic cases

9 • 8

• •

7

•

• •

6

• •

•

5

•

•

4

•

•

3

•

primary cluster of non-ethnic cases

•

•

• •

•

2

Involuntary 1

S N O L MB K C I

E

J Q D HT GF R A P

Non-ethnic Cases

Ethnic Cases

Source: Case study interviews and field notes.

Figure 2 illustrates that both ethnic owner/managers and their non-ethnic counterparts are actively involved in networking activities over-and-above the involuntary level, as most of the cases (ethnic as well as non-ethnic) have

clustered in the centre of the networking activity continuum. Further comparison of Tables 2 and 3 reveals that both ethnic owner/managers and their non-ethnic counterparts were heavily involved in networking activities of business nature, family, community, and trade with one exception, indicating that where ethnic owner/managers were involved in informal networking with acquaintances (network score=7), their non-ethnic counterparts preferred networking with other organisations and competitors (network score=8). In summary, research findings suggest they are somewhat inconsistent with the expectations of theoretical replication in that, although all small enterprise owner/managers seem to be keen participants in networking activities, their voluntary participation in networking activities do not seem to be influenced by the owner/managers’ personal attributes such as ethnicity, gender and age.

Conclusion The research findings indicated that there was a great deal of variation in the networking activities of ethnic as well as non-ethnic small enterprise owner/managers within each group. Since small enterprises varied in terms of their maturity and the types of activities in which they were engaged, their outlook in relation to the external relationships and the resources at their disposal for networking also varied significantly. It was found that, depending upon the nature of small enterprise operations, owner/managers were actively involved in networking activities over-and-above minimal involuntary levels of business related interactions. Both groups, non-ethnic owner/managers and their ethnic counterparts, seemed to be voluntarily participating in networking activities with a great deal of variation within each group.

In brief, the literature suggests that owner/managers’ networking activities are likely to be dominated by their ethnicity and enterprise attributes. The results of the data analysis challenge the established literature and suggest that the networking activities of small enterprise owner/managers are not likely to be influenced by their ethnicity. This theory building, analytic generalisation research provides a foundation for later, survey research that could test the statistical generalisability of the findings.

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