Topic: Entrepreneurial leaders who engage cognitive ambidexterity must know how to connect

and use their social networks. (Greenberg, D, Sweet, K M and Wilson H.J, 2011, p215).

Introduction:
The last decade has really changed the demands, placed on to the business leaders, and they are
finding themselves managing through a diverse level of intricacy as there is an array of
environmental shift take place in the socio-economic behaviours of business, especially in the B2B
and B2C segments, which is not only uncertain but also unknowable. This revolutionary change
leads business leaders decision to an inimitably complex level that relying on past experience
and/or statistics have merely become an inexplicable approximation or guess.
In a recent survey of more than 1000 global organizations, we found that leaders are not simply
trying to analyse their way out of uncertainty through traditional predictive, quantitative models;
rather they are acting their way out by behaving like start-up entrepreneurs and redefining the
context (Wilson & Eisenman, 2010).
Focusing on social networking analysis turns attention to relationships between entrepreneurs and
others that provide the resources that are important in establishing a business (Johannisson, 1988;
Larson, 1991). Entrepreneurs have ideas to test, and some knowledge and competence to run the
business, but they also need complementary resources to produce and deliver their goods or
services (Teece, 1987).
But, there is an ongoing debate among scholars and entrepreneurs on whether and/or how
entrepreneur leaders leverage social network to generate creative knowledge and try to solve
problems to minimize the cognitive gap or to take ambidexter decision. Some of them are not that
much more optimistic about using social network, as they still rely on the old school theory of
entrepreneurship. To them, the consequence of using social network in generating cognitive
ambidextrous business decisions are not apparent. They argue that entrepreneurs will obtain nonredundant resources from their social network which will make them confused.
Ken Sundheim, CEO of KAS Placement, said that decision makers of companies are on average
much older they find Facebook confusing, frustrating, or consider it a kids game because their
teenage daughter plays with it on the car ride to school.
On the other hand, entrepreneurs like Richard Branson, the founder of the Virgin Group and
companies says Business is all about personal contact. No matter how heavy your workload is...
everyone can and should be a networker.
Apple co-founder Steve Jobs said to his biographer Walter Isaacson: Creativity comes from
spontaneous meetings, from random discussions. You run into someone, you ask what theyre
doing, you say Wow, and soon youre cooking up all sorts of ideas.

Objective and Purpose of study

The purpose of the current study is to survey empirically the effect of social networks over
entrepreneurs cognitive ambidexter decision making. Based on prior research, this study
hypothesizes that opportunity recognition (Ardichvili et al., 2003; Kirzner, 1973) is significantly
associated with social networks variables (Arenius & De Clerq, 2005, Singh, 2000) such as weak
ties, strong ties, structural holes, and kinship (Renzulli, Aldrich & Moody, 2000). Since decision
making is a process, the study requires the consideration of supplementary elements that affect this
process such as business alertness. The main question of this study how do social networks
influence the cognitive business decisions.
Literature review and critical analysis:
Inadequate research has been carried out on entrepreneurial use of social network to obtain
creative entrepreneurial intentions. Nevertheless, earlier studies said that entrepreneurs get the
support, knowledge, and access to distribution channels through their social networks.
Entrepreneurs are also linked to people and organizations that interact among themselves, and
these contacts can widen the availability of resources that sustain a new firm (Hansen, 1995).
A number of studies confirm the important and diverse role that networks play in the persuasion
of entrepreneurial processes and outcomes. The processes consist of distinctive activities such as
opportunity identification, resource mobilization, and the creation of an organization (Shane and
Venkataraman, 2000). In contrast, entrepreneurial outcomes can be a critical milestones or the
consequences of the entrepreneurial process. Important outcomes are may be the foundation of a
new venture and its performance, as well as exiting events such as merger, acquisition,
association, and dissolution.
Social networks are a rich source of information (Granovetter, 1974; Christensen & Peterson,
1990; Burt, 1998) that permit the individual to identify different combinations of the means-ends
deriving in the creation of new products or services for a particular market. Studies have shown
that successful identification and development of opportunities derive in the creation of
successful businesses (Ardichvili et al, 2001).
A social network provides certain benefits that are shared among its members such as
communication of information; funds (Shane & Cable, 2002); exchange content, or goods and
services; and a special characteristic or attribute that people expect from another (e.g. advice,
counselling). Information is necessary to the entrepreneurial process because the richer the
information, the better opportunities that are recognized by the entrepreneur (Shane, 2000).
This is in contrast to the general use of social media, which has been primarily used to connect
with known off line connection. Secondly, the use of micro blogging has been quite popular with
businesses primarily since the reciprocity of relationship is not required. Micro blogging can be
used for purposeful connections as opposed to social media like Facebook.
Entrepreneurial cognitive decision making is a process that involves the selection of a specific
action among alternative options that reduces uncertainty. The pre-existing heuristics that

business leaders use in this process to fill some cognitive gaps are of course a set of mental
activities that derived from integration of personal attributes, cognitive factors and emotional
reactions.
Based on cognitive theory (Baron, 1998; Krueger, 2000; Gaglio & Katz, 2001), studies have
tried to identify mental (cognitive) models to explain how individuals recognize opportunities.
These frameworks have shown the role of perceptions (Krueger, 2000), intentions and alertness
(Kirzner, 1973; Gaglio & Katz, 2001) within the opportunity recognition process, and have
determined that entrepreneurs emotions (motivation and attitudes) affect his/her decisions
(Krueger, 2000), and exogenous factors -particularly social groups (Ajzen, 1991; Ardichvili et
al., 2003) - influence individual innovation (Scott & Bruce, 1994).
Ardichvili et al. (2003) joined cognitive, psychological and sociological aspects within their
model. They identified that in order to obtain subsequent successful businesses, it is necessary
that some elements coincide. The procedure initiates when the entrepreneur has an abovethreshold of entrepreneurial alertness. The entrepreneurial alertness is a cognitive framework that
assist entrepreneurs - particularly in the successful ones-in being alert to opportunities (Kirzner,
1973; Gaglio & Katz, 2001). Entrepreneurial alertness is defined to be the possession of a skill
set; a set of perceptual and cognitive processing skills that direct the opportunity identification
process (Gaglio & Katz, 2001) and appear to operate at the more conscious executive level of
mental processing (Gordon, 1992).

FIGURE: Model and units for the opportunity identification (Taken from Ardichvili et al., 2003 p. 118)

Ozgen & Baron (2007) identified three sources of information for the entrepreneur that
influences their opportunity recognition process:
Mentors. Older and more experienced individuals that assists young and inexperienced
persons with various aspects of their careers.
Informal networks within their industry. These networks are formed of acquaintances
and persons that the entrepreneur knew before launching the new venture. They provide
information which helps in identifying viable business opportunities.
Family and close friends. This group represents the strong ties that Granovetter (1973)
explained in his work.
From a very generic position, ambidexterity is about striking a balance (Bodwell & Chermack,
2009; Collin & Porras, 1997; Eisenhardt, 2000; Lewis, 2000) rather than choosing between two
extremes. Such abilities and skills lead a corporation to create emerging markets without
upsetting its traditional ones. For instance, Hewlett Packard continued to come up with top ideas
for its mainstream computing and printing markets, while financing comprehensively in the
emerging IT service markets with releases like OpenView.
In the broadest terms, social network consists a set of actors (individuals or organizations) together
with a set of linkages between the actors (Brass, 1992). According to Granovetter (1992), the
economic effects of social networks stem from two factors: relational embeddedness and structural
embeddedness. Relational embeddedness refers to the fact that economic actions and outcomes
are affected by actors dyadic (pairwise) relations, while structural embeddedness refers to the
fact that economic actions and outcomes are affected by the structure of the overall network of
relations (Granovetter, 1992, p. 33).
Relational embeddedness focuses on the particular relationships people accumulate through a
history of interactions, such as friendship and respect, which may influence their economic
activities. For example, many employers tend to recruit from those people they know, even in the
absence of purely economic advantages to doing so (Granovetter, 1992, p. 35). This perspective
emphasizes who, i.e., the set of contacts with specific resources, including information, power
and prestige etc. (Burt, 1992, p. 11).
In contrast, structural embeddedness typically has more subtle and indirect effects on economic
action (Granovetter, 1992). The logical emphasis is not on the contacts held by the actor, but rather
in the way that the actor is positioned in the structure of his/her contacts. For instance, if the
supervisor is at odds with the others, and especially if those others are friendly with one another,
they are likely to make life difficult for the one worker who is close to the supervisor (Granovetter,
1992).
Entrepreneurs embedded in large social network have access to more information than
entrepreneurs deciding alone.(idid.;Moran, 2005). Hence, entrepreneurs embedded in social
networks appear to make more informed strategic choices. Through their social ties,
entrepreneurs are able to identify opportunities in their surroundings, by integrating the
information available on the social network (Shane and Venkataraman, 2000). The capability of
the entrepreneur to integrate information and use it in the process of strategic decision-making is
referred to as cognitive complexity. Cognitive complexity indicates the richness of the
representation developed by an individual about a particular decision situation (Curseu and Rus,

2005). It represents the way of thinking of the entrepreneur and his/her identification of the
environment (kiesler and Sproull, 1982).
Fisher and Reuber (2010) have shown that entrepreneurs engaging through twitters benefited
from the use of this medium, as it allowed them to acquire more contacts and information and to
better achieve a constantly revised set of goals. The procedure is known as affectuation which
contrasts with causality. If you believe in causality, you first set goals and then decide on the
means to achieve them. But, because entrepreneurs live in a highly uncertain environment, they
follow an effectual process whereby the resources available to them define their goals. He further
analyzes how a new source (twitter) affects risk-taking behavior. The authors find that using
twitter aids entrepreneurs to reassess how to use it (cognition about means) and what is possible
to achieve with it (cognition about effects). Prior to using twitter, most entrepreneurs did not
realize (or believe) in its use. They only notice it when twitter allowed them to have a personal
connection with their customers; once they discover that this was possible, they started to use
twitter to achieve this new goal.
At the end, I would like to make a plea for more qualitative, inductive research that will inspire
further work by presenting new theoretical ideas because, given the present scenario, I believe that
the actual contributions of a social network in making cognitive ambidexter decisions are still far
from its present understanding.

Conclusion
We began by saying that, these days entrepreneurs are getting into too much complexity in taking
cognitive ambidextrous decisions for the success and failure of their business. Societal and
personal networking can be one of the solutions as these networks can turn into a creative hub and
are encompassed with the consumers, employees, brokers, suppliers, distributors and other vertical
and horizontal business contacts that are beyond the walls of the own commercial premises. So,
depending on the nature of business, entrepreneurs need to develop the right kinds of relationships
or networks with others inside or outside their organization which in turns may help to get nonredundant resources as well as sensitive information and responsive support to make them perform
better.
Whether one like the idea of social network or not, millions of individuals around the world are
already using social networks every day. So, pleading ignorance are unacceptable excuses in these
days. If you own a business or want to start-up, and you want to make a better informed decision,
then social network literacy is a must.
I am still in awe about how many business people do not think that social networks for
entrepreneurial outcome is important. The www.com era makes todays business environment
wide open all business segments, especially for both B2B and B2C. And, there is no turning back
from this situation. So, entrepreneurial leader, who engage in cognitive ambidexterity, should use
social networks to make informed decisions. So for entrepreneur leaders in todays extremely
uncertain and even at times unknowable competitive landscape, it will be very challenging to use
social networks and to pick up the right time for switching between prediction logic and creation
logic effectively to take future business decisions flawlessly.

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