Credibility is a critical resource at start up and represents an important element of the entrepreneur's personal contact network

Résumé du document

Traditionally, entrepreneurs have been considered as individuals with a strong, often charismatic, leadership as well as a high drive for individualism and independence. However, the same cannot be said for businesses. A business unit does not exist in isolation as it will be, in contact with a whole range of other organizations. Porter and Ketels' (2003, p45) study of British competitiveness points out that business networking often plays a particularly important role in the diffusion of new management practice and innovation. This is particularly relevant for entrepreneurial start-ups if we consider Schumpeter's analysis that the entrepreneur leads the way in creating new industries. Thus, entrepreneurs are bound to cooperate at most during the creation of their company, which is a critical step for survival of the business, as the initial resources on which they can rely on are limited. A means to overcome this will be the credibility these businesses can get from their network. However, there are no studies on credibility in the fields of entrepreneurship, as research has been linked only with marketing and organizational behavior (Ali & Birley, 1998, p750).

Extraits

[...] Consequently, it must work to create relationships with suppliers, customers, investors and any others who might offer support, while competing with existing rivals. Ali and Birley (1998, p753) noticed that, at the beginning of an association, new entrants to a network are considered as strangers, and are unlikely to be trusted. Some networks may even be based on “fear and suspicion”, defending the interests of an elite or a corporation, and consider anything new as a threat (Thompson p71). The main issue new businesses have to face is therefore their lack of credibility during the start-up process: if sufficient credibility is not established at once, the business is likely to fail, such as the majority of new ventures which close within the first three years. [...]

[...] Credibility is a critical resource at start up and represents an important element of the entrepreneur's personal contact network Traditionally, entrepreneurs have been considered as individuals with a strong, often charismatic, leadership as well as a high drive for individualism and independence. However, a business unit does not exist in isolation since it is, or will be, in contact with a whole range of other organisations. Porter and Ketels' (2003, p45) study of British competitiveness noticed business networking often plays a particularly important role in the diffusion of new management best practice and innovation. [...]

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