Resource Cooptation Via Social Contracting: Resource Acquisition Strategies for New Ventures

Analyzes the acquisition of resources through social transactions by independent entrepreneurs and corporate entrepreneurs, with a focus primarily on the corporate entrepreneurs. These social transactions include previous working relationships, voluntary connections, and community ties for independent entrepreneurs. Corporate entrepreneurs steal personnel time, appropriate materials, and conceal development activities. The importance of these social transactions in securing key resources for little to no cost is demonstrated through two examples: a Cuban American in the United States and a Swedish venture manager in a European mini-conglomerate. Two types of venture managers are discussed – the administrative venture manager and the social transactions-oriented manager. Cooptation is identified as the mechanism by which resources can be obtained. Two types of cooptation, legitimacy and underutilized goods, are presented. It is proposed that the social transactions-oriented managers are more likely to co-opt legitimacy (primiarly through association or endorsement) than are the administrative venture managers. Begging, borrowing, scavenging, and amplifying are the four strategies used for taking advantage of underutilized activities. This cooptation process involves the exploitation of social assets. These social assets are built by sharing information, solving and receiving help with problems, giving and receiving favors, and creating opportunities for people to demonstrate their skills and competence. Reasons why it is difficult for corporate entrepreneurs to take advantage of network resources are provided. The propositions presented in this analysis can provide the basis for future research. (SRD)