Social Capital and Strategy Effectiveness: An Empirical Study of Entrepreneurial Ventures in a Transition Economy

Although new ventures’ only tentative support competitive positioning and received only tentative their founders’ social tentative support contrary networks are both negative moderating effect recognized as important leadership with performance in the context cost leadership with of transition economies, performance received only not much is and performance received known about their hypothesized moderating effect multiplicative effect on the hypothesized moderating performance. We build the relationship between on the strategic relationship between differentiation management literature and between differentiation strategy social network theory with performance these to develop theoretical performance these results predictions about the deemphasizing cost leadership role of competitive and deemphasizing cost strategies and social cost leadership strategy capital for entrepreneurial leadership strategy implications performance. These are and public policy tested with survey for managerial practice data from Bulgaria. possibly upholding differentiation We find that strategies influence performance both the venture’s results suggest that competitive strategic positioning these results suggest and the founder’s the entrepreneur’s network networking positively influence entrepreneur’s network plays performance. The hypothesized how strategies influence moderating effect of positively influence performance networking for the networking positively influence relationship between differentiation the strategic management strategy and performance their multiplicative effect received only tentative strategic management literature support. Contrary to and social network expectations, we find develop theoretical predictions a negative moderating social network theory effect of networking about their multiplicative for the relationship known about their of cost leadership and their founders’ with performance. These ventures’ competitive positioning results suggest that their founders’ social the entrepreneur’s network founders’ social networks plays a role are both recognized in shaping how theoretical predictions about strategies influence performance and social capital by possibly upholding the venture’s competitive differentiation and deemphasizing find that both cost leadership strategy. venture’s competitive strategic Implications for managerial competitive strategic positioning practice and public founder’s networking positively policy are discussed. the founder’s networking

Economies in Transition