The relational capital of micro-enterprises run by women: the startup phase

Published date11 May 2015
Pages172-197
Date11 May 2015
DOIhttps://doi.org/10.1108/VINE-01-2014-0003
AuthorPaola Paoloni,John Dumay
Subject MatterInformation & knowledge management,Knowledge management,Knowledge management systems
The relational capital of
micro-enterprises run by women:
the startup phase
Paola Paoloni
Department of UniSu, Niccolò Cusano University, Rome, Italy, and
John Dumay
Department of Accounting & Corporate Governance,
Macquarie University, Sydney, Australia
Abstract
Purpose – The purpose of this paper is to investigate how relational capital contributes to the startup
phase of women-owned micro-enterprises. The motivation for the study stems from the fact that
micro-enterprises are key drivers of economic growth and that woman entrepreneurs are key
developers of these businesses.
Design/methodology/approach – To gather data for our study, a qualitative research methodology
was adopted using a case study approach based on examining current events of real life in depth (Yin,
2009). Nine cases of micro-enterprises run by women are analysed, focusing on the management of the
start-up phase to investigate the nature and role of the relationships that are activated by the
entrepreneurs.
Findings – The paper develops the CAOS model of micro-entrepreneurship, examining the personal
characteristics of the female entrepreneur (C); the environment in which the micro-enterprise operates
(A); organizational and managerial aspects (O); and the motivations for starting a new business (S).
Using this model, the authors’ are able to link these factors and classify different types of connections,
it is possible to identify the kind of existing relations. From the analysis, it was found that a
predominant use of networks characterized by informal and permanent relations, supporting the need
to reconcile work and family and to involve relatives and friends in the network. This emphasizes the
lack of strategy in the female-run micro-enterprises.
Originality/value – Given that female entrepreneurship is regarded as central to the development
and welfare of economies, the deepening of knowledge of how women entrepreneurs manage the
start-up of her business can contribute to improving the effectiveness policies aimed at promoting the
participation of female entrepreneurs in the economy.
Keywords Human capital, Entrepreneurship, Organisational sense-making
Paper type Research paper
1. Introduction
The purpose of this paper is to investigate how relational capital contributes to the
start-up phase of women-owned micro-enterprises. Given that small businesses are
considered key drivers of economic growth and that female micro-entrepreneurs are key
developers of these enterprises (David, 2006;Paoloni, 2011) the way that relational
capital contributes to their success warrants investigation. Prior literature has found
that in micro-enterprises, the creation of a network to support customising production,
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0305-5728.htm
VINE
45,2
172
Received 17 January 2014
Revised 27 June 2014
9 September 2014
15 October 2014
Accepted 27 November 2014
VINE
Vol.45 No. 2, 2015
pp.172-197
©Emerald Group Publishing Limited
0305-5728
DOI 10.1108/VINE-01-2014-0003
creativity, talent and personal skills is crucial for survival and growth (Klofsten and
Scheele, 2003;Ritchie and Brindley, 2005;Ireland and Webb, 2007). Additionally, it is
argued that a women’s entrepreneurship is especially characterised by a networking
approach, with signicant attention paid to relational aspects (Hoang and Antoncic,
2003;Farr-Wharton and Brunetto, 2007). Therefore, by understanding how relational
capital is used by women micro-entrepreneurs in the start-up phase, the study has
implications for policy aimed at promoting women micro-entrepreneurs. Thus, our
research question is “How does relational capital contribute to the start-up phase of
women-owned micro-enterprises?”
To answer the research question, semi-structured interviews with nine women who
own and operate micro-enterprises in the province of Viterbo, Italy are analysed. The
paper is novel because from the data we develop the CAOS model of micro-
entrepreneurship, examining the personal characteristics of the female micro-
entrepreneur (C), the environment in which the micro-enterprise operates (A),
organisational and managerial aspects (O) and the motivations for starting a new
business (S)[1]. Using this model, we are able to link these factors and classify different
types of connections and relationships.
From the analysis, we found a predominant use of networks characterised by
informal relationships that support the need to reconcile work and family and to involve
relatives and friends in the network. This emphasises the lack of formal strategy in the
women’s micro-enterprises.
This paper is structured as follows. In Section 2, the relevant literature about women
and micro-enterprises is examined. Section 3 outlines the case study methodology used,
and Section 4 uses the interview data to construct the CAOS model, which identies the
relationships and networks used by these women micro-entrepreneurs. Finally, Section
5 discusses the ndings, while in Section 6, a conclusion outlines implications for policy
and research along with limitations.
2. Women and microenterprises
The participation of women in the labour force, especially in entrepreneurial
positions, is signicantly lower in Italy than the European average (38.7 per cent vs
53.1 per cent). However, some studies show that despite limited work–family
services, women in Italy take a proactive approach to participation in business,
especially as the onset of the global nancial crisis (GFC). Actions that enhance the
development of women’s participation in the world of business are therefore
important, in particular because prior research shows that female entrepreneurs
contribute to both family income and economic development (Fielden and Dawe,
2004;O’Connor et al., 2006;Klyver, 2011).
Studies show that women, including women entrepreneurs, are more likely than men
to work in ways that integrate their professional life with their private life. Moreover,
many studies show that lower participation rates for women in the labour force, both as
employees and entrepreneurs, is an inefcient use of human resources as demonstrated
by the positive economic impact of women participating in the economy. Therefore,
support for developing start-up micro-enterprises with women as micro-entrepreneurs
can be seen as an effective economic policy, strategically designed to encourage
employment growth and local development (Farr-Wharton and Brunetto, 2007).
173
Micro-
enterprises
run by women

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