Pryke, SD; Almadhoob, H; Badi, SM; (2014) The Influence of Social Networks on Firm’s Success, Survival and Growth: A Social Network Analysis investigation of SMEs in the Bahrain Construction Industry. Presented at: Sunbelt XXXIV- Annual research conference of the International Network of Social Network Analysis (INSNA), St Pete Beach, Florida, US.

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Abstract

The success, survival and growth of Small and Medium-sized Enterprises (SMEs) in a fragmented construction sector is partly related to the business owner’s ability to secure critical resources through personal networks which provide information, advice, funding and brokerage (Pryke et al., 2011). The Bahrain construction industry is particularly characterised by a culture of collectivism where business activities are inextricably intertwined with social relationships. Social network analysis is used as an analytical tool to examine the resource provision ego-networks of four Bahraini SMEs owners, taking into consideration the start-up/ growth business development stages and the success/failure status of the firm. Comparative social network analysis is conducted focusing on the density of ego-networks and the prominence of resource providers and associated subgroups. The findings highlighted the evolving nature of social networks over time in order to meet the business owner’s critical resource requirements in the face of increasing uncertainty. At emergence, high density networks and strong ties, primarily family relations, play a critical role. These ties are characterised by high levels of trust and cohesion, are easily accessible, and path-dependent. As firms mature, strong ties are found to restrict the attainment of a wider range of complementary resources, and hence weak ties come into play. These ties are diversified arm’s length and market-based relationships and incorporate less sentimental factors than strong ties. The findings also underline the role of formal institutions in bridging networks’ structural holes; helping firms to capitalise on new business opportunities.

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