Regional small businesses’ personal and inter-firm networks

Abstract

Purpose The purpose of this paper is to examine the role of personal and inter-firm networks and the elements that contribute to the formation and management of these networks for regional small businesses. Design/methodology/approach Semi-structured interviews were conducted with 20 small business owners located in regional areas. Findings The findings highlight key characteristics of regional small business owners’ networks. Findings indicated that participants relied strongly on their personal networks for business purposes. This study shows that while personal networks adapted and changed into informal inter-firm networks, weak-tie relations within inter-firm networks were unlikely to develop into close personal networks. Novel findings also include a preference for “regional interactions” and included regular collaboration with local business competitors. Although the participants used social media to manage their business through personal networks, results confirmed there was a lack of awareness of the benefits of inter-firm networks with businesses outside the local region. Originality/value While it is acknowledged small business owners use personal and inter-firm connections to maintain and grow their business, there is a lack of research examining both of these networks in the same study. This research addresses this gap and presents five propositions as a useful direction for future research. This paper adds to the evolution of existing knowledge by expanding understanding of the formation of business networks and conditions of business trust relations within a regional context.