The Network Paradox in Entrepreneurship: Towards an Integration

Abstract

The literature on entrepreneurial networks is divided on whether a homogenous or a heterogeneous network is more beneficial for an entrepreneur. Adding to this confusion is the paradox of whether an entrepreneur's network is the result of their rational choices or social embeddedness resulting from the past. We propose that the network type (homogenous or heterogeneous) and the extent of agency (rationality or embeddedness) are context-dependent. The life stage of a venture, the entrepreneur's agency, and past social activities would decide what network the entrepreneur possesses. We emphasize the situation dependence nature of the entrepreneurial network by proposing a framework (2 X 2 matrix) that incorporates both perspectives. Such conceptualization enables us to understand an entrepreneur's network in a much finer way at any given moment. It also provides opportunities for analyzing the current state of the network and making necessary adjustments, albeit with some constraints, to have a network structure that is more likely to fetch necessary resources as per the changing need of the venture in the entrepreneurial process.