Networking: An Aide in Career Advancement

Networking: An Aide in Career Advancement

Introduction

            This chapter discusses economic backgrounds and situations of networking in parts of Asia and the United States.  It answers the question on how networking aide in career advancement.  This also suggests ways for an individual on how to be successful in the networking business.  While there are numerous types of networking, this paper focused on small entrepreneurial businesses. 

A network can be defined as a system of relations and/or contacts that link firms and actors together and whose content can refer to material goods, information or technology.  From the perspective of economic activity, a network is the set of relations among firms or entrepreneurs, which facilitate the exchange of goods, services and information ( 1996).

Whatever the definition adopted relations among entrepreneurs and actors may have the following features, among others ( 1993).  In the first place, a network refers to transactions within the context of reciprocity (not to market exchanges or hierarchical relations within a firm).  Second, these are interdependent relations between actors and firms; they are not relations of independence, as in the market, or of dependence, as in the hierarchic firms and organizations.

Furthermore, networks refer to systems of multiple interconnections and of responses and reactions of firms and actors.  Networks are characterized by a series of weak links whose interaction strengthens the network through access to information, interactive learning and diffusion of innovation.  And finally, relations among firms and actors can be asymmetric, of a hierarchical nature, when power becomes a functional element in the network’s performance.

Networks can vary greatly.  Therefore, in order to describe precisely their content and importance, it is necessary to classify them according to the kind of relations established among the firms and actors (1995).  First, relations can be formal, that is explicit, related to decisions on strategic goals of persons and organizations, or they can be informal, that is, tacit or spontaneous, specifically, personal contacts among actors and firms.  The former would refer to relations with organizations such as banks or service firms, while the latter would involve interaction of a casual nature with families, friends, colleagues or ex-employees.

Firm networks may also refer to commercial transactions that are, to the exchange of goods and services, which facilitates relations with suppliers and clients, or to technical relations based on the exchange of codified information on technological applications, and of product, process, organization or market innovations.  Since the latter depend on technical cultures, the contacts and relations are based on specific rules that govern professional and personal ties.

From the specific point of view of economic development and entrepreneurial activity, it is important to establish the distinction between personal networks and firm networks (1993; 1987; 1989).  Personal networks formed by individuals provide information and, over time, resources that are necessary for the emergence and start-up of a firm, but they also favor the exchange of goods and knowledge within local productive systems.  Firm networks, on the other hand, provide technical advice and information on business, financial and material resources and they even lead to strategic alliances against rival firms and groups.  The notion of network, its characteristics and typology, brings us to the concept of industrial networks, which are of particular interest to local development.

 

A Look on Business Networks in Asia

The networks’ preeminence in Asia and the current economic crises provide an excellent laboratory for studying the interaction and evolution of the economic forces of Japanese keiretsu*, Korean chaebol*, Overseas Chinese networks and, increasingly, Overseas Indian networks. The emerging network organizations of mainland China are a further factor. Each of these players uses their own unique form of networking to compete in the market. This is why the study of the networking strategies of these players will serve to provide a greater
understanding of the recent phenomenon of Asian economic development and may help us comprehend the current turmoil ( 1999).

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Entrepreneurial Networking

The study of entrepreneurial networks informs the field of entrepreneurship by highlighting the role of individual entrepreneurial action on the discovery of opportunities and mobilization of resources (1991; 1988;  2000).  Study of entrepreneurial networks at the individual level focuses on the relationships or ties of entrepreneurs–as agents of the firm–with other individuals and organizations ( 2003; 2003;  2002). The network ties of an emerging firm can provide the conduits, bridges and pathways through which the firm can find and access external opportunities and resources.  Thus an emerging firm’s network ties can facilitate successful firm emergence, growth and performance.

However, the characteristics of these network ties can influence the extent to which opportunities and resources can be identified, accessed, mobilized and exploited.  When a network tie is embedded within the social relationship and influences the firm’s economic decision making, the tie is called relationally embedded (1985; 1996).  However,  (2003) suggests that these relationally embedded ties may differ based on the different characteristics of the social relationships.  In addition,  (1993) and Hite (2003) indicate that network ties may evolve in their degree of relational embeddedness due to an entrepreneur’s proactive management.  This potential for the evolution of relationally embedded network ties specifically suggests that entrepreneurial action can influence both opportunity discovery and resource mobilization.

Therefore, a critical challenge for emerging entrepreneurial firms is to understand and manage the evolution of their relationally embedded ties and the effects of this evolution on entrepreneurial strategies for opportunity discovery, resource acquisition and firm governance.  From the scope of entrepreneurship as firm creation with the entrepreneur as a founder of the firm, this study explores and explains how network ties of an emerging firm might evolve toward increased relational embeddedness, specifically due to individual action.  

 

Working out on Networking

            Networking has always been a big part of a business individual’s marketing strategy.  The state of small business continues to be challenging, so networking is critical to being in business. Of course, there are several economists who claim the economy is starting to pick up steam thanks to federal tax rebates, lower federal income-tax rates increases in military spending low interest rates, and President Bush’s economic stimulus package, which will allow small businesses to write off up to ,000 worth of equipment purchases as expenses (instead of the previous ,000).

But for many of the 22.9 million small businesses in the United States–some 820,000 of which are African American owned–the rise in unemployment and decrease in consumer spending translates into less revenue for their enterprises.  For small black businesses, changes in the economy tend to have an even greater impact. “When the economy offers challenges, many black businesses, in particular, do not fare as well,” says Ronald N. Langston, national director of the Minority Business Development Agency (MBDA), “mainly because they are unable to adjust to or absorb [extreme economic] challenges, making them particularly vulnerable”, says  (2003).

To overcome these difficulties, small business owners are flexing their networking muscle. They are joining local chambers of commerce, obtaining memberships in industry-specific organizations and associations, forming strategic partnerships and alliances with their entrepreneurial peers, and attending trade shows and business conferences such as the annual Black Enterprise/ Microsoft Entrepreneurs Conference held in May in Nashville, Tennessee. But how you go about creating that social interaction is the key to landing the contracts, clients, financing opportunities, partnerships, and other things you’ll need to maintain and grow your business during lean times.

Networking is more than just passing out a bunch of business cards at an arbitrary meet-and-greet function in your neighborhood. It is a step-by-step process to building relationships. In the business world, networking is considered social capital. Spending yours successfully requires a plan, the proper place, advance preparation, and a little bit of patience. Here are the steps developed by Harris, W. M. (2003) that you should take to make networking work for you:

* Determine your objective.  Successful networking begins with setting goals for your business.  “A small business person who wants to strengthen their penetration in the marketplace through networking really has to define what they want to accomplish,” says Norm Dominguez, United States national director of Business Network International (BNI), a referral-based organization with 58,000 members in 15 countries. “The small business person has to ask themselves.  This will not only identify why you want to network but it will also help clarify where you should network.

* Choose your location. Once you decide to build your business through networking, your next step is to identify what kinds of organizations, clubs, associations, conferences, and other events or places you think will help you achieve your goals.  Look for organizations and events dedicated to business networking, such as business conferences.

* Be prepared to work it. Whether you’re attending a wine and cheese at a local organization or a series of workshops at a national business conference, you’ve got to be prepared.

* Follow up and make a referral.  Once you leave the networking event, be prepared to follow up with the contacts you made in the next few days.

 

Networking Options

            Many entrepreneurs join business and professional associations or private clubs to increase their networking power. These options give your company the constant visibility it needs to attract new clients and can also help you with aspects of running your operation.

            Local chambers of commerce frequently hold smaller gatherings, such as morning coffees or evening meet-and-greets, where you may be able to form relationships. Trade shows provide a tailor-made business environment and face-to-face contact with prospective customers in your industry.

Networking cart be done through strategic partnerships as well. Teaming up with businesses that complement what you do and that are a good source of referrals can help you expand your market area and target larger accounts.

            The Internet is another networking option. Through bulletin boards and chat room communities you can cyber-meet potential customers and fellow entrepreneurs. Just keep in mind that when networking, nothing beats good old-fashioned face-to-face encounters. So although you may make initial contact with potential clients in cyberspace, the Internet should not be your sole vehicle for building networking relationships.

 

In addition to the abovementioned tips, . has suggested the following steps for a successful networking:

10 Steps to Successful Networking

1. Network in places and at events that would attract your target audience. Don’t choose venues and occasions where just your good friends hang out. Your friends may not have anything to do with furthering your business goals.

2. Sharpen your networking skills before attending an event. Have a few topics in mind to use as icebreakers. Ask open-ended questions to keep conversation flowing.

3. Set Specific goals and stick to them. If your objective is to meet three new people at a local chat-and-chew make it a point to do that before you leave.

Dominguez suggests that you never spend more than 10 minutes with one person when you’re networking.  If you find yourself spending more time than that, politely introduce that person to someone else, then move on.

4. Describe your business in 60 seconds or less. No one wants to hear you ramble about every aspect of your company. Create a concise and interesting way to let others know what you do.

5. Be willing to listen. Business owners often make the mistake of talking to much when attending a networking event. Ask questions of the person you’re talking to and give your undivided attention. Don’t glance down at your watch too often or let your eyes wander over their shoulder.

6. Relax. When networking, don’t whip out your business card seconds after you shake the person’s hand. Create interesting dialogue first. That will begin the relationship-building process.

7. Take notes. Whether you attend a conference, organization meeting, or chamber event, gather information about potential clients and write it on the backs of their business cards. This will help you recall your conversations when it’s time to follow up.

8. Look for people to refer. Sometimes the fastest way to get referrals is to give referrals, so pull your entrepreneurial peers into your discussions.

9. Follow up. After the event, don’t throw all of the business cards you collected into a drawer. Follow up with a phone call, fax, letter, or e-mail. Or suggest a lunch meeting.

10. Be patient. Obtaining new clients through networking doesn’t happen it does happen. Stay focused, maintain contact with potential clients, and never give up.

 

Business Networking International (BNI), based in the United States, is a business and professional networking organization that offers members the opportunity to share ideas, contacts and most importantly, referrals.  So far, here are the following testimonials of networkers after training in the BNI’s Certified Networker Program (CNP):

 

“The Certified Networker Program is a must for business owners and sales professionals. Since taking the course, I have increased my sales 85 percent and at the same time established personal relationships that will last a lifetime.”
 MDRT, Northwestern Mutual, Virginia Beach

“By applying the systems and principles learned, I increased my sales 60 percent within eight weeks and all my business now comes from referrals.”
 

“CNP will help you reach a higher level and dramatically improve your understanding of how truly effective networking can be achieved. Just think if you could get all your referral sources to take this class how powerful your networking system could become.”  Collision Specialist, New Orleans ()

 

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