Network importance and use: commercial versus social enterprises

Abstract

PurposeThe purpose of this paper is to understand how important networks are for the emergence and growth of social enterprises as well as how social enterprises use their networks throughout the life course of their organisation. A comparative approach is used by contrasting social enterprises with traditional commercial enterprises along the dimensions of obtaining resources and legitimacy through their networks.Design/methodology/approachAn abductive approach is used starting from existing knowledge on how commercial enterprises use networks during the start-up and growth of their enterprise. Qualitative interviews with 23 entrepreneurs were conducted. Using a matched-pairs design, the network importance and use of social and commercial enterprises is compared.FindingsIt is found that networks are highly important for both commercial and social enterprises throughout their life course. However, they substantially diverge in how they use their networks. Social enterprises tend to access more intangible resources through their networks than do commercial enterprises. Moreover, social enterprises rely more strongly on their networks for legitimacy in both the start-up and growth phase of the enterprise.Originality/valueThis paper takes a novel approach by empirically comparing the networks of social and commercial enterprises. New insights are offered in the resource flows within networks and how entrepreneurs use resources obtained from their networks.