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Skip to 0 minutes and 10 seconds As we explained earlier, sociology is about how humans function within groups and within society. We now take a closer look at three important concepts that sociologists have developed which help to explain entrepreneurship. One, social norms– the first concept has very much to do with the influence of the group on the individual intentions and behaviour of the entrepreneur. Individuals make decisions while taking into account how their environment will react to that situation. This can be family, friends, peers, et cetera. Usually, individuals strive for approval of their choices by those people important to them. In entrepreneurship literature, it has indeed been found that the attitudes and opinions, especially of parents, has a large influence on the person’s decision to become an entrepreneur.

Skip to 1 minute and 8 seconds And although an individual may find entrepreneurship an attractive job, and he or she sees opportunities, if the most important family members do not share these views, it’s really difficult to actually continue to become an entrepreneur. Research consistently shows that entrepreneurial role models, especially by parents, are an important predictor of entrepreneurship.

Skip to 1 minute and 36 seconds And then social capital– entrepreneurs collect resources and combine them to exploit opportunities in the market. These resources include, for example, people– which we call human capital– and money– financial capital. Of course, an entrepreneur has his or own experience, knowledge, and skills, and perhaps also has his or her money. But every venture needs other parties to become successful. Think of the right suppliers, employees, and customers, to name but a few. To find and gain access to these other parties, the entrepreneur needs relations. And research shows that these relations are often social relations. Social capital is the expected collective economic benefit that you derive from a preferential treatment and cooperation between individuals and groups.

Skip to 2 minutes and 37 seconds The concept of social capital is particularly used in research on the success of young entrepreneurs or start-ups. Because of their size and age, they just do need much external resources and have not developed their business relationships yet. Three– social networks. The third and final concept from sociology that is used frequently in studying entrepreneurship is social networks. A social network is a social structure made up of a set of social actors, such as individuals or organisations, and a set of diadic ties between these actors.

Skip to 3 minutes and 20 seconds A social network consists of social relationships among a group of people of organisations, and can be depicted in a simple network diagram. Such a diagram should look familiar to you from the lectures on graph theory and networks. By looking at such a picture, it becomes clear soon that some actors are very central in that network. They have many and close relationships. And this access to much information. Other are more in the periphery. And just as with social capital, social metrics influence the accessibility of scarce resources, such as knowledge that are crucial for an entrepreneur to become successful.

Extra: Sociology and entrepreneurship

This video explains the view of sociologists on aspects of entrepreneurship.

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Decision Making in a Complex and Uncertain World

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