The Significance of Diverse Social Networks in Entrepreneurship, Even in Divided Societies

The increasing impact of political association on various aspects of American life, as well as the potential consequences of expressing political views, are matters of growing concern. This political polarisation has the potential to restrict the vital social connections necessary for entrepreneurs, particularly during election years.

A recent study published in the Strategic Entrepreneurship Journal examines the powerful influence of diverse social networks on entrepreneurship, drawing from an unexpected source: Kenya. Christian Busch, an associate professor at USC’s Marshall School of Business, in collaboration with Robert Mudida of the Central Bank of Kenya, closely monitored four IT companies based in Nairobi over a period of seven years, starting from the country’s devolution in 2013.

The devolution – the transfer of power from a central government to 47 local entities – heightened ethnic association in Kenya. Consequently, the entrepreneurs had to adapt to working with local government officials aligned with tribal communities. These officials often lacked experience with complex IT projects and had incentives to favour tribal interests. Despite these challenges, the study found that the IT entrepreneurs utilized specific tactics to transcend ethnic boundaries.

Strategies included diversifying social connections, shifting the focus away from ethnicity, offering pro bono consultations, and leveraging social networks to aid potential customers with business issues. It was evident that the ability to think beyond social boundaries and an openness to creating relationships on multiple bases played a crucial role in broadening social networks for these entrepreneurs.

One striking aspect highlighted in the study was the advantage held by the IT companies due to the founders’ prior experience with cross-ethnic relationships. Many of the founders had mixed ethnicities, inter-ethnic upbringings, and were married to partners from different tribes. These diverse backgrounds and personal experiences provided them with a unique advantage in creating inter-ethnic business ties.

The findings of this study have broader implications beyond the business context. They indicate that understanding the social and ethnic context of a region can be pivotal to the successful launch of a product, particularly for global companies. The ability to navigate through partisan divides effectively is a valuable skill and has the potential to serve as a valuable lesson for businesses on a global scale.

These research findings are outlined in an article titled “Asserting and transcending ethnic homophily: How entrepreneurs develop social ties to access resources and opportunities in socially contested environments” in the Strategic Entrepreneurship Journal.

In conclusion, the study suggests that fostering diverse social networks is a crucial aspect of successful entrepreneurship, even in societies with strong political or ethnic divides. By bridging these divides and fostering connections based on shared interests and professional goals, entrepreneurs can overcome the social challenges often posed by divided societies.

For more information, the full study can be found in the Strategic Entrepreneurship Journal under DOI: 10.1002/sej.1491. The research was conducted by Christian Busch et al and supported by the Strategic Management Society. This updated content can be retrieved from https://phys.org/news/2024-01-importance-diverse-social-entrepreneurship-societies.html.