Relational Conditions for Knowledge Flows to Entrepreneurs

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ENTREPRENEURS’ NEEDS FOR INTANGIBLE SUPPORT

Entrepreneurship is an emotionally harrowing process to go through (Rauch et al., 2018). Entrepreneurs face lack of resources (Jarillo, 1989; Stevenson & Jarillo, 1990; Villanueva, Van de Ven, & Sapienza, 2012), liability of newness (Choi & Shepherd, 2005; Van de Ven, 1993), and the possibility of taking the new project to any possible direction (Hayward, Forster, Sarasvathy, Fredrickson, & Hayward, 2010). Engaging in entrepreneurship is a high risk situation to be in and comes rife with uncertainty and emotional demands, and an entrepreneurs’ willingness to bear this uncertainty lies at the heart of their ability to create a new firm (McMullen & Shepherd, 2006). While it would be convenient to have specific pieces of information that bring full clarity to entrepreneurs’ challenges, entrepreneurs are faced with dynamic and uncertain environments. Rather, they have to call upon general heuristics and “sense out” contextual cues within the uncertainty at hand (Haynie, Shepherd, Mosakowski, & Earley, 2010). Entrepreneurs are, so put it simply, in a particularly stressful position.
Entrepreneurs find themselves having to balance expectations placed upon them in their several relationships, with investors who expect returns on their investment, precious first clients who need to be well served and to whom the entrepreneur must listen, family that demands support of all sorts, partners who need to be paid, and so on (Wincent & Örtqvist, 2009). Entrepreneurs suffer strain on their information processing abilities because they are doing several things at the same time (Shepherd, 2004), while making decisions that will set the course of their new firm for years to come (Bryant, 2014). These factors set the stage for stress to be particularly high when starting a new venture (Przepiorka, 2016) and is exacerbated in times of economic downturn (Pollack, Vanepps, & Hayes, 2012).
While there can be high rewards for founding a new firm, such as financial returns, autonomy, and the chance to leave a legacy (Jennings, Jennings, & Sharifian, 2016; Rindova, Barry, & Ketchen, 2009; Verduyn, Dey, Tedmanson, & Essers, 2014), the chances that the new firm will fail are great (Shepherd, 2003). How the entrepreneur perceives the relationship between returns and risk can increase their levels of stress—if the expected return is great, the entrepreneur might be willing to be exposed to greater risk, and therefore is placed up against the high possibility of experiencing risky situations (McMullen & Shepherd, 2006; Shepherd et al., 2007). How they handle such uncertainty becomes crucial in being able to avoid being overrun by stress (de Mol, Ho, & Pollack, 2018; Shepherd, 2009), ultimately affecting how well their endeavor is managed (Hessels, Rietveld, Thurik, & van der Zwan, 2018) and the enjoyment of entrepreneurship experienced by entrepreneurs (Wincent & Örtqvist, 2009). High levels of stress and depression are an antecedent to entrepreneurial exit (Hessels et al., 2018; Przepiorka, 2016), while emotional turmoil can lead to avoidance strategies, where entrepreneurs put off the most difficult decisions to avoid even greater emotional strain, even in the certainty that failing to make a timely decision will result in greater financial loss (Shepherd, Wiklund, & Haynie, 2009). Managing the processes of a company requires confidence and overall mental well-being (Cardon & Patel, 2015; Rauch et al., 2018; Wincent & Örtqvist, 2009).

Theoretical discussions of entrepreneurs’ needs

Two research streams have addressed these challenges. In one, psychological dynamics are explored. For example, while role stress is an antecedent to low entrepreneurial satisfaction and venture performance, as well as to depression and negative impacts on family life, overall positive affect (Cardon & Patel, 2015), self-efficacy (Hessels et al., 2018) and the belief that destiny is involved in allowing the situation to be what it is (de Mol et al., 2018) all work as buffers to these effects of stress. Personal characteristics, such as high tolerance for stress, optimism, hope, and resilience are associated with persistence in the face of the harrowing situations in entrepreneurship (Shepherd, 2009), also bringing actors with these characteristics to self-select into such activities and those who do not possess them, to self-select out (Baron et al., 2016). Self-compassion in the face of frustrations (McMullen & Shepherd, 2006) and an overall positive attitude towards one’s self and one’s environment (Avey, Reichard, Luthans, & Mhatre, 2011) also enable handling emotionally charged challenges. These, however, can, at least in some degree, be learned (Ucbasaran, Wright, Westhead, & Busenitz, 2003). Addressing the timing of decisions so that their implementation will be emotionally manageable, through procrastination, helps entrepreneurs to manage difficult processes that involve high uncertainty and learn from them (Shepherd et al., 2009).
Cognitive strategies have been found to enhance entrepreneurs’ resilience. Learning strategies, such as alternation between distraction and avoidances strategies and reflexive thinking, can dose the emotional turmoil and help entrepreneurs to deliberate upon their actions (Shepherd, 2003). This stream has recognized that relationships around entrepreneurs can enhance these buffering cognitive frameworks. Examples of this are entrepreneurs’ families’ supporting them while navigating grief (Shepherd, 2003), entrepreneurs’ personal ties assisting in mitigating the magnitude of the risk/return ratio (McMullen & Shepherd, 2006), and those ties to supporters that remain with the entrepreneur after their failure actively cheering on their persistence (Cope, 2011). However, the importance of relationships to navigating such emotional challenges are not fully fleshed out in these discussions of psychological processes. Still, this stream is included throughout the review below because it is descriptive of the emotional challenges entrepreneurs face. Even when discussing psychological processes, social conditions are a vital, though undertheorized, component.
In the other research stream addressing entrepreneurs’ needs for intangible support, leaning towards a resource-based view, supporters have been acknowledged in their ability to mitigate the stress-related factors by providing all sorts of assistance. This literature explicitly lists people that surround the entrepreneur by providing assistance as “supporters” (Hanlon & Saunders, 2007), “helpers” (Kotha & George, 2012), or, as a collective, an “action set” (Aldrich & Kim, 2005; Hansen, 1995). Supporters are seen as relevant first and foremost because they provide resources (Hanlon & Saunders, 2007), which can be particularly diverse because they can reach into clusters from the surrounding network that the entrepreneur cannot access directly (Dubini & Aldrich, 1991). While these relationships can start with instrumental exchanges, these interactions come with an affective dimension that can build trust (Huang & Knight, 2017) and solidarity (Bianchi et al., 2018) between entrepreneurs and their supporters, thereby becoming relationships that provide the emotional support that is greatly valued by entrepreneurs (Hanlon & Saunders, 2007). Still, with the exception of Nielsen, (2017, 2019), these studies remain focused on entrepreneurs’ experience as objects of support efforts, and supporters’ experience in rendering support has not been brought to the foreground.
In a nutshell, the following review highlights that relationships around entrepreneurs provide key mechanisms that can mitigate the emotional turmoil experienced by entrepreneurs, and even promote emotional well-being that can enhance their decision-making. In the following sections, we review the literature on social support both within and outside entrepreneurship studies. By complementing a review on support within entrepreneurship literature with insights on this matter from other fields, I hope to inspire new research agendas regarding the power of relationships to meet entrepreneurs’ needs for emotional support and knowledge.

SOCIAL SUPPORT AS A RESPONSE TO A FOCAL ACTOR’S NEEDS

We see that entrepreneurs have great need for support in facing challenges that entail psychological distress, requiring the establishment of supportive relationships. In the present section, I begin by reviewing the key assumptions and definitions regarding social support, in general. I also review some of the key findings in fields other than entrepreneurship. I include a small digression to distinguish social support from social capital to emphasize the distinct contribution that social support literature can make to discussions of support to entrepreneurs. To close this section, I review the key assumptions and definitions in discussions that specifically focus on support to entrepreneurs and identify avenues to extend these discussions.

Key assumptions and definitions in discussions of social support

Social support and health

I turn to the study of social support as a portrayal of the response to a given actor’s position of distress in a challenging situation. In this section, I present the insights that I will draw from when comparing this literature stream with what has been achieved so far in discussions regarding support to entrepreneurs. The purpose here is to present the reader with a general view of support as as a general, social, and relational phenomenon, and then problematize the discussion of support to entrepreneurs, specifically.
The study of social support grew out of the intuition that relationships enhance a focal actor’s well-being (Barrera & Ainlay, 1983; Cohen et al., 2000; House, Landis, & Umberson, 1988). This literature recognizes that scarcity of resources is a key impingement on actors’ well-being (Bianchi et al., 2018), and that, therefore, relationships have the potential to alleviate suffering by providing resources (for example, Agneessens, Waege, & Lievens, 2006; Uehara, 1990). However, this discussion is not mainly about the accrual of resources. The key question in these studies is to find the mechanisms through which health is promoted, and the provision of resources is just one way for this to happen (Uchino, 2009; Uchino, Bowen, Carlisle, & Birmingham, 2012; Uchino, Cacioppo, & Kiecolt-Glaser, 1996).
These studies often maintain an eye towards the effect of relationships on both the absence of unhealthy effects, as well as towards the effects on promoting well-being (Schumaker & Brownell, 1984). The two main mechanisms often discussed here are whether relationships have a “buffering” effect, or whether there is also a main effect on the focal actor’s health (Cohen et al., 2000). In the first case, the question is if there is a moderating effect of relationships that diminishes emotional stress. In the second, the investigation focuses on the positive effects of relationships on the focal actor’s health (Uchino et al., 1996). When honing in on these effects, these studies look towards the effects of relationships on other relationships, thereby also teasing out effects of adding and subtracting relationships on health matters (House, 1987; Uehara, 1990). These studies also recognize that there is a large diversity in the forms of support, as well as different forms of relationships within different social contexts and needs (Agneessens et al., 2006; Brashears & Quintane, 2018; House, Umberson, & Landis, 1988; Thoits, 1986; Wellman & Wortley, 1990). All this, therefore, requires a view of complexity when approaching these mechanisms that promote well-being through relationships.

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Social support and care

Simply stated, at the center of these discussions is the understanding that people care for people. One early definition for social support is, “the existence or availability of people on whom we can rely, people who let us know that they care about, value, and love us” (Sarason, Levine, Basham, & Sarason, 1983: 127). To initiate the mechanisms that promote well-being in relationships, the focal actor is seen to have a particular need (Small & Sukhu, 2016). The surrounding actors, then, are responsive to these needs in greater or lesser degrees in ways that are experienced as demonstrations of compassion and kindness, or lack thereof (Thoits, 1986).
The mechanisms sought out in these discussions, then, often have to do with what enables or inhibits the supporters’ responsiveness to the focal actor’s particular needs for support (Kanov et al., 2004; Ryan, Sales, Tilki, & Siara, 2008). For example, this can come in the form of skills, role expectations, or quantity of demands (Fischer, 1982; House, 1987; Uehara, 1990; Vaux, 1985). The effects of such support as a form of compassion and kindness is that the focal actor feels their needs are taken care of, that they have a worth within their social system, and that they are capable of achieving the means to meet the demands pressed upon them (Schumaker & Brownell, 1984; Uchino et al., 1996).

Social support and patterns of relationships

Initial studies in social support sought out the effects of the amount of relationships around a focal actor. At this time, by definition, the amount of social support around a focal actor was seen to be the amount of relationships they had (Uehara, 1990). Although lacking in the complexities around the types of relationships, diversity of needs, and so on, initial studies identified that there was, indeed, an association between the existence of relationships and improved well-being (for reviews, see Cohen et al., 2000 and Uchino et al., 2012). Social support, in this framework, is the existence of relationships (House, 1987).
As the complexities of relationships were unpacked, the importance of the whole makeup of the network showed its relevance. Relationships were found to have impacts on other relationships. These interconnected relationships change the access that focal actors had to necessary resources, impose specific forms of responsiveness on potential supporters, overload supporters with demands, or even provide support to supporters that would enable them to, in turn, respond to other actors’ needs (Ryan et al., 2008; Uehara, 1990). The move towards describing support networks, rather than sets of relationships around the focal actor, brought a view towards the dynamic, diverse, and unique social situations that enable specific support efforts to focal actors (Walker et al., 1993; Wellman & Wortley, 1990).
As these relational complexities began to be explored, the concept of social support decoupled from the relationships per se, and the nature of the actions taken in response to the focal actor’s need was discussed as “support” (Agneessens et al., 2006; Brashears & Quintane, 2018). Social support became a response to a need that is facilitated or constrained by patterns of relationships in the network (Wellman & Wortley, 1990). Note the definition of social support provided by Bianchi et al. (2018: 62): “Social support mainly encompasses a material (or tangible) along with an emotional (or intangible) component, according to the nature of the resources which one is asked to mobilize in order to help the recipient.” While the definition has shifted from the existing relationships to the provided support efforts, relationality around support is still at the heart of the mechanisms that promote well-being and attenuate emotional turmoil. It is in addition to relationships that the nature of the need and the response to this need are also observed quite closely.

Presenting the need for support and seeking support

At the center of social support is the existence of a need that is to be addressed by surrounding supporters. Thoits (1986: 417) defines social support as the “functions performed for a distressed individual by significant others.” The focal actor experiences a challenge in a particular situation, and can choose to reach out for support (Small, 2017; Small & Sukhu, 2016). Here, the literature on social support has embraced the framework of a rational actor who deliberates upon the relationships at hand and purposefully selects among the available relationships to activate a support relationship. However, the social support literature embraces the rational actor framework quite tentatively (see Uehara, 1990 for a critique of rationality in social support models, and Jones, Hesterly, & Borgatti, 1997 for a similar critique in social network models in general).
Small and Sukhu (2016) call upon the Dual-Process Theory approach (Stanovich & West, 2000), which places, on the one side, deliberative reflection as one mode of reasoning. Such rational deliberation is an example of what Kahneman, (2003) refers to as “slow thinking” . Small and Sukhu (2016) place the deliberation of a rational actor at one end of a spectrum. On the other end, they place intuitive, spontaneous activation of relationships. In these instances, the urgency of a particular need in a given situation can make the accessibility of actors the crucial factor in signaling needs for social support (see also Small, 2017). In other words, while the most competent, trustworthy potential supporter might indeed rationally be the best one to turn to, the fact that other people are near the focal actor at the moment of need, in the situation they face, means that they are the ones to whom the focal actor signals the need for support. Here, support seeking is spontaneous and evaluations of appropriateness of requesting support are intuitive or, in Kahneman’s (2003) words, “fast”.

Table of contents :

Chapter 1 – Introduction: The Relational Underpinnings of Social Support to Entrepreneurs
Chapter 2 – Methodology: Operationalizing Support
Chapter 3 – Advising Peers: Relational Conditions for Knowledge Flows to Entrepreneurs
Chapter 4 – Support Fosters Homophily
Chapter 5 – D’Artagnan’s “Special” Theory of Community
Chapter 6 – Conclusion: Affective Bases of Legitimacy When Rendering Support
References
Appendix A – On tenacious relationships in support paths
Appendix B – Steps for the within-case analysis
Appendix C – Ethnographic Account

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