On the organization and function of commercial/ entrepreneurial networks in the modern era

Maria Christina Chatziioannou

On the organization and function of commercial/ entrepreneurial networks in the modern era

Commercial and entrepreneurial networks, as these register in space and time, are made by the effort of individuals to form groups of entrepreneurial activity, while trying to deal with adversities caused by time, distance and political circumstances. Within the networks, comparative economic advantages are optimized and ethnic characteristics, such as language and religion, are used to one’s benefit; thus, these characteristics are transformed into economic advantages. The function of the network helps overcome the obstacle of national borders and national groups, since the members of the network can be geographically dispersed aiming at their mutual benefit. The basic characteristic as regards communication and collaboration within the network is the efficient and mutual understanding among the members. The study of commercial diaspora is methodologically based on the notion and function of the network in international transactions. The theoretical discussion that revolves around the role played by individual and collective strategies of social agents, the notion of trust and moral values developed by the network so as to minimize the speculative tendencies of its members in international trade is very important.

Contemporary historiographical debate has highlighted issues pertaining to entrepreneurial diasporas and transnational networks. These are mostly heterogeneous groups (Jews, Armenians, Chinese, and Greeks) who controlled certain parts of the international trade, financial transactions and transports. These groups developed personal techniques and practices, especially in the period of great transformations in the European region, following the commercial and industrial revolution. Based on solidarity among the members of the group, they often formed introverted communities in the new places of settling.

Networking as a systematic activity of exchanging information, and the mobilization and undertaking of responsibility in personal ties has long preoccupied sociology and economic theory. Economic sociology underlines the organization of the network through social relations that assume the form of junctures and ties. Emphasis has been put in the formation of weak ties around minor closely-knit networks. Individuals who partake in many networks handle information or are the mediators that bring different networks in contact and fill in any structural holes in the social fabric.

The theoretical discussion on this issue has highlighted the significance of trust developed mostly in minor networks. The main function of the network is the exchange of information, a characteristic that, at times, may be more important than the circulation of goods itself. The social ties that support the networks reduce the cost of information, while securing its quality. The viewpoint on the cost of information highly emphasizes the social base of economic activity. This pertains to private family networks, in which the moral and technical education of the members is practiced. The basic elements of moral education are based on the notion of respect for the elders and the more experienced, while on a parallel level, the transfer of commercial knowledge is important within the family. Since the 18th century the structure of the family business and its strategies are closely connected to and contingent on both the national and local origin and the community in which they function. The low level of communications and the factor of precariousness of economic transactions shape a competitive environment, namely the environment of economic activity. The first pole of unity for any entrepreneurial attempt in the places of commercial diaspora is the family, and on a parallel level, almost equivalently, the ethnic and religious background.

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