Relationships for Entrepreneurship in a Newly Emerging Market

Abstract

This study explores how entrepreneurs’ make decisions on who to build relationships with in order to establish a business presence in the early years of a post-Soviet emerging economy. Existing literature based on Western empirical data, points to the importance of strong ties and trusted relationships during the early stages of a venture; within an emerging economy, however, such ties are often insufficient to provide access to resources necessary to establish and grow a venture and entrepreneurs need to venture outside their trusted circles of friends. This itself presents additional problems within an environment that lacks institutions and infrastructure to support entrepreneurs. Through in-depth qualitative interviews with eight ventures, the study examines how entrepreneurs choose who to build relationships with in order to establish and grow their ventures in a new emerging economy. The findings point to three decision making strategies which underpinned who entrepreneurs chose to network with: ‘purposeful friendships’, ‘come, take, leave’ and ‘we are all free agents’. In addition, we show how these strategies involved selection criteria for access, for gain and for dynamism and fluidity. These three strategies and the different selection criteria help to shed new light on the development of relationships for entrepreneurship in emerging economies.