Description
In this particular brief elucidation about growth of women owned businesses the effects of intangible resources and social competence.
Growth of Women-Owned Businesses: The Effects of Intangible
Resources and Social Competence
Crystal X. Jiang
Bryant University
Monica A. Zimmerman
West Chester University
Grace Chun Guo
Sacred Heart University
Previous research suggests that women entrepreneurs face many challenges in starting and growing a
business. In this study, we examine the relationship of intangible resources and the growth of women-
owned businesses. We focus on four intangible resources: social-, human-, and reputational capital, as
well as social competence. Using case studies of women entrepreneurs, we found that a woman
entrepreneur’s social-, human-, and reputational capital are related to the growth of her business. We also
found that social competence moderates the social-, human-, and reputational capital – growth
relationship in women entrepreneurs.
INTRODUCTION
The number of women-owned businesses is growing dramatically in the United States. Between 1992
and 2006, the number of women-owned businesses has increased from 5.4 million to 10.4 million, and
they represent an increasing share of the small businesses that contributes to U.S. economic growth
(Center for Women’s Business Research, 2007). According to the Small Business Administration (2005),
women-owned businesses generated US$3.6 trillion in sales and accounted for 55% of all new U.S.
businesses in 2004.
Although women entrepreneurs are becoming major contributors and players in the U.S. economy
(Center for Women’s Business Research, 2007), they face many challenges including accessing capital
and markets, maintaining cash flow, obtaining training and technical assistance, managing business
growth and expansion, establishing client budget constraints, and overcoming negative perceptions of
women entrepreneurs (e.g., Hadary, 2010; Hisrich, 1989; Hisrich and Brush, 1984, 1986; Hisrich and
O’Brien, 1981; National Women’s Business Council, 2005; NAWBO, 2004; Zimmerman Treichel and
Scott, 2006). Many of these challenges can be attributed to a lack of resources that startups and young
firms face (Stinchombe, 1965; Zimmerman and Zeitz, 2002).
In the study of women entrepreneurs, a considerable amount of research has examined financial
resources or the lack thereof (Buttner and Rosen, 1988; Gatewood et al., 2003; Greene et al., 2001;
Hadary, 2010; Hisrich and Brush, 1984; Hisrich and O’Brien, 1981; Neider, 1987; Olm et al., 1985).
Journal of Business Diversity vol. 12(1) 2012 47
Although tangible resources (such as financial resources) are critical for start-ups, previous studies have
shown that relative to tangible resources, intangible resources play a more important role in a company’s
competitive advantage (e.g., Amit and Schoemaker, 1993; Dierickx and Cool, 1989; Hitt et al., 2001).
There is an increasing consensus among strategy scholars that intangible resources are crucial drivers of
firms’ growth and competitive advantage (e.g., Amit and Schoemaker, 1993; Dierickx and Cool, 1989;
Hitt, Bierman, Shimizu, and Kochhar, 2001), yet we have a limited understanding of the effects of
intangible resources on the growth of women-owned businesses. In this study, we attempt to narrow this
knowledge gap by examining the impact of intangible resources on the growth of women-owned
businesses.
Intangible resources are generally considered as soft resources such as knowledge and information
(Hall, 1992, 1993). Following previous studies (Fernández, Montes, and Vázquez, 2000; Hall, 1992,
1993), we define intangible resources as assets that woman-owned businesses possess which include
social capital (network relationships), relational capital (the reputation of products and companies) and
human capital (generic knowledge or subjective resources of know-how. We investigate how these three
forms of intangible resources contribute to the growth of their businesses.
Further, because entrepreneurs must be able to deploy their intangible resources efficiently and
effectively to create competitive advantage and business success (e.g., Mahoney and Pandain, 1992;
Oliver, 1997), we also addressed the role of women entrepreneurs’ social competence in enhancing the
utility of the intangible resources and in influencing the growth of their businesses. According to the
social competence perspective, entrepreneurs’ competencies play an important role in their success (e.g.,
Chandler and Jansen, 1992; Smith et al., 2001). Social competence, i.e., an individual’s ability to develop
and exploit resources through interpersonal skills, has been linked to the success of entrepreneurs (Baron
and Markman, 2003). While social competence is important to all entrepreneurs, it may be especially
important to women entrepreneurs because of the importance of interpersonal skills and their relationship
to the success of women entrepreneurs (Aldrich, 1989; Brush, 1992; Gundry and Ben-Yoseph, 1998).
Due to the paucity of research on these issues, we adopted a case study method involving in-depth
personal interviews with woman entrepreneurs in the mid-Atlantic area of the United States. Our study
enriches current entrepreneurship literature by adopting an integrative approach in examining how the
women entrepreneurs’ intangible resources and their social competence influence the growth of their
firms. We invoke both the resource-based view of the firm (Barney, 1991; Eisenhardt and Martin 2000)
and the social competence perspective (Baron and Markman, 2003) to advance current understanding of
various factors that may lead to the growth of women-owned businesses.
We organize the study as follows. We begin with a review of literature and define key terms. After
detailing our research design and data collection, we use cases to illustrate our major findings and provide
interpretations. This study concludes with discussion and implications.
LITERATURE REVIEW
Understanding Women Entrepreneurs
Much of the research on women entrepreneurs has addressed the increasing number and visibility of
women entrepreneurs (e.g., Gundry et al., 2002); differences in groups of women business owners such as
racial or national groups (e.g., Maysami and Goby, 1999); psychological or sociological variables relating
the characteristics of women business owners to characteristics of their business (e.g., Brush, 1992;
Hisrich and Brush, 1983; Sexton and Bowman-Upton, 1990), and the relationship of personal attributes
and the growth of women-owned businesses (e.g., DeTienne and Chandler, 2007; Manolova et al., 2007).
The challenges faced by women entrepreneurs in launching and growing their businesses is another
frequently studied aspect of research addressing women entrepreneurs (e.g., National Women’s Business
Council, 2005; NAWBO, 2004; Zimmerman Treichel and Scott, 2006). Another frequently studied aspect
is the comparison of women entrepreneurs and men entrepreneurs (e.g., Brush, 1992; Gundry et al.,
2002).
While the characteristics of men and women entrepreneurs are similar, researchers observe that
48 Journal of Business Diversity vol. 12(1) 2012
women entrepreneurs have to overcome negative social beliefs about women (e.g., Hadary, 2010; Hisrich
and O’Brien, 1981) which men do not have to address. For instance, despite a solid record of sales and
profits, women entrepreneurs are often perceived as lacking ability to grow their businesses (Hadary,
2010), are categorized as “risky” borrowers by loan officers, and are viewed as less credit worthy than
their men counterparts (Brush, 1997). These negative perceptions make it difficult for women
entrepreneurs to secure tangible resources (e.g., financial resources) necessary to grow their business
(Alsos et al., 2006; Buttner and Rosen, 1988; Godwin et al., 2006). Other research suggests that women
entrepreneurs’ intangible resources, such as their access to informal and formal networks, enhance
business growth (e.g., Kickul, Gundry, and Sampson, 2007).
Intangible Resources and Firm Growth: A Resource-Based View Approach
According to the Resource-based View (RBV), the firm can be understood as a bundle of resources
and capabilities and possession of such a resource bundle determines the firm’s ability to survive (e.g.,
Amit and Schoemaker, 1993; Barney, 1991; Mahoney and Pandian, 1992). Recent research in
entrepreneurship has used the RBV in explaining entrepreneurial processes (Dollinger, 1999) and new
venture strategic behavior (Brush, Green, and Hart, 2001; Foss, Klein, Kor, and Mahoney, 2008;
Lichtenstein and Brush, 2011). In general, a firm may possess different types of resources, defined as “an
asset or input to production (tangible or intangible) that an organization owns, controls, or has access to
on a semi-permanent basis” (Helfat and Peteraf, 2003:999). While both tangible and intangible resources
are important to a firm, intangible resources are considered crucial drivers of a firm’s competitive
advantage and superior performance (e.g., Amit and Schoemaker, 1993; Dierickx and Cool, 1989; Hitt, et
al., 2001). And so in this study we focus upon intangible resources.
There are a number of definitions of intangible resources (e.g., Conner and Prahalad, 1996; Fernández
et al., 2000; Kogut and Zander, 1992). One generally accepted definition of intangible resources is Hall’s
(1992) definition which includes technological capital (intellectual property rights, contracts, trade
secrets, and public knowledge such as scientific works); human capital (generic knowledge or subjective
resources of know-how); organizational capital (organizational culture); and relational capital (the
reputations of products and companies, and network relationships) (Fernández, Montes, and Vázquez,
2000; Hall, 1992, 1993). In this study, we focus on relational capital and human capital, and further define
relational capital as social capital (network relationships) and reputational capital (the reputations of
products and companies). We examine social capital because it provides entrepreneurs with credibility,
access to valuable information and resources, as well as enhanced opportunity recognition capability
(Baron and Markman, 2000; Cable and Shane, 1997; Carter et al., 2003; Manolova, et al., 2007). We
examine reputational capital because it can maximize socioeconomic and moral status of a business
(Hayton, 2005), thereby allowing it to achieve lasting profitability (Roberts and Dowling, 2002) and new
venture growth. We also examine human capital because of its relationship to new venture growth (Dyke
et al., 1992; Manolova et al., 2007; Rauch et al., 2005). In the following sections, we review these three
forms of intangible resources and explore how they relate to the growth of women-owned businesses.
Social Capital
Social capital refers to “the aggregate of the actual or potential resources which are linked to
possession of a durable network of more or less institutionalized relationships of mutual acquaintance and
recognition” (Bourdieu, 1986: 248). Social capital has been conceptualized as a set of social resources
embedded in relationships (Burt, 1992; Tsai and Ghoshal, 1998), including relationships with individuals
(i.e. Belliveau et al., 1996), organizations (Baker, 1990; Burt, 1992), societies (Putnam, 1995) and
business units (Tsai and Ghoshal, 1998). It can be derived from the norms, networks, and relationships of
the social structure in which an individual is embedded (Putnam, 1995). Networks are one important form
of social capital. They “provide a conduit for the exchange of information and resources that can enhance
the success and survival of women owned businesses” (Carter et al., 2003:6).
In the entrepreneurship literature, researchers have found that social capital aids entrepreneurs in
opportunity perception, gaining credibility and providing access to valuable information and resources
Journal of Business Diversity vol. 12(1) 2012 49
(Baron and Markman, 2000; Cable and Shane, 1997; Carter et al., 2003; Kwon and Arenius, 2010;
Manolova, et al., 2007). The social capital of entrepreneurs enhances their opportunity recognition
capabilities by helping them acquire opportunity-related knowledge, forecast future trends, evaluate
information and decisions, as well as react proactively to future trends (Carter et al., 2003). For instance,
Kickul, Gundry, and Sampson (2007) posited that for women-owned businesses, formal and informal
social capital enhances a business’ market growth and expansion. Given the importance of social capital
for entrepreneurs, when women entrepreneurs face specific challenges in growing their businesses, such
as obtaining start-up funding, financial management, and the development of effective marketing and
advertising (Hisrich and Brush, 1983; Pellegrino and Reece, 1982), social capital appears to be important
to the growth of women-owned businesses.
Reputational Capital
A second form of intangible resources is reputational capital. Whereas social capital is considered to
be a set of social resources embedded in relationships (Burt, 1992; Tsai and Ghoshal, 1998), reputational
capital refers to social resources and legitimacy certified by well-regarded individuals and organizations
(Hoang and Antoncic, 2003; Oliver, 1997; Powell and DiMaggio, 1991). Reputational capital refers to "a
form of intangible wealth that is closely related to what accountants term ‘goodwill’ and marketers refer
to as ‘brand equity’" (Fombrun, 1996: 11). Reputational capital provides many benefits including
reduction of information asymmetry between a business and its stakeholders (Peng et al., 2005). In
particular, when there is insufficient information among players, reputation is an asset that can generate
future rents by affecting stakeholders’ beliefs, attitudes, and behaviors (Hayton, 2005; Weigelt and
Camerer, 1988).
In the case of entrepreneurs, a high level of positive reputational capital informs stakeholders about
the values of the entrepreneurs, their socioeconomic and moral status (Petrick, et al., 1999), as well as
their future prospects (Certo, 2003). A positive reputation suggests that an entrepreneur’s business is in
the right market and provides competitive products and services (Petrick, et al., 1999). Further, it can also
reduce the transaction costs associated with an exchange (Hayton, 2005) and the need to monitor
relationships (Williamson, 1975). Moreover, an entrepreneur with a positive reputation can attract
employees from rival firms, facilitating the transfer of knowledge (Almeida and Kogut, 1999) and
enhancing innovation capability, stimulate changes, as well as improve business performance (Droege
and Hoobler, 2003).
Previous studies have shown that women entrepreneurs face many challenges in proving their
credibility when acquiring resources such as funding and supplies (e.g., Hisrich and Brush, 1983). Given
the negative social beliefs about women entrepreneurs (e.g., Hadary, 2010; Hisrich and O’Brien, 1981),
we speculate that reputational capital may be especially important to women entrepreneurs because a
positive reputation may ameliorate the effects of negative social beliefs and enhance women
entrepreneurs’ ability to acquire valuable resources, and so contributes to the growth of their businesses.
Human Capital
A third form of intangible resources is human capital. Human capital is defined as the stock of
knowledge and skills that reside within individuals (Becker, 1964). Prior studies support the positive
relationship that exists between human capital and small business success (e.g., Colombo and Grilli,
2010; Rauch et al., 2005).
Human capital is important for entrepreneurial discovery (Davidsson and Honig, 2003).
Entrepreneurs with more human capital have a comparative advantage in helping their business solve
problems, adapt to changes, and implement new technologies (e.g., Shrader and Siegel, 2007; Siegel et
al., 1997). Further, human capital plays an important role in the successful exploitation and pursuit of
opportunities by entrepreneurs (e.g., Bates, 1990; Davidsson and Honig, 2003). Prior studies identified
education (e.g., Bantel and Jackson, 1989; Norburn and Birley, 1998) and prior experience (e.g., Fischer
and Pollock, 2004; Hambrick and Mason, 1984) as two critical components of an entrepreneur’s human
50 Journal of Business Diversity vol. 12(1) 2012
capital that affect managerial know-how and capability (Becker, 1993). Below we describe these two
critical components of human capital in more details.
Education
Education has been argued to indicate an individual’s knowledge and skills (Hambrick and Mason,
1984) and to be related to information-processing capacity (Bantel, 1993). The education level of
entrepreneurs is an important factor in predicting the financial success of a new business (Hisrich and
Brush, 1984). Educational level reflects an individual’s cognitive ability and skills (Wiersema and Bantel,
1992). Kor et al., (2007) suggest that “the versatility and subjectivity of entrepreneurial knowledge and
insight help explain the persistence of firm-level heterogeneity in entrepreneurial activities” (Kor et al.,
2007: 1193). Entrepreneurs’ personal knowledge and perceptions affect entrepreneurial activities, as well
as, the rate and direction of the business’ growth (Kor et al., 2007; Zahra et al., 2006). Further, a higher
level of education earned by the entrepreneur may increase stakeholders’ confidence in their capability of
managing a new business (Carter, et al., 2003) and signal potential lenders, employees, and customers
about the future productivity of the business (Backes-Gellner and Werner, 2007).
Experience
Hambrick and Mason (1984) argue that prior experience provides top managers with knowledge and
cognitive biases which then influence their strategic choices. According to Fischer and Pollock (2004), a
CEO’s experience can affect a company’s efficiency and its ability to attract customers and capital and,
thus, its survival. Prior experience and known patterns of action also influence an entrepreneur’s decision
making by providing clues about when and how to take actions (Shane, 2000).
Further, entrepreneurs with prior experience can gather information more efficiently through their
previous successes or failures, thus leading to faster decision-making (Cooper et al., 1995; Forbes, 2005).
Moreover, the prior experience of entrepreneurs can provide access to information and social support as
well as access to reputation, credibility, and qualification (Delmar and Shane, 2004). Experience seems to
be important in predicting the success of a new business (Hisrich and Brush, 1984; Lerner and Almor,
2002). For instance, Lerner and Almor (2002) argued that the previous experience of women
entrepreneurs especially industry experience is positively related to the performance of their business.
Bhagavatula, Elfring, van Tilburg, and van de Bunt (2010) found that an entrepreneur’s experience seems
to positively influence resource mobilization more than other human capital variables. Given the
challenges faced by women entrepreneurs in launching and growing their businesses, we speculate that
human capital may be especially important to women entrepreneurs because women entrepreneurs’
knowledge and skills help them formulate and implement an effective entrepreneurial strategy and so
contribute to the growth of their businesses.
Social Competence Perspective
Although intangible resources form the basis of value-creating strategies, intangible resources alone
are not sufficient to sustain a firm’s competitive advantage (Eisenhardt and Martin, 2000). Firms are
considered repositories of resources, and these resources must be transformed and utilized to maximize
returns and earn sustainable returns (Amit and Schoemaker, 1993; Teece et al., 1997). Since firms need to
effectively develop, allocate and deploy intangible resources to generate competitive advantage (e.g., Hitt
et al., 2001), entrepreneurs need to deploy their intangible resources efficiently and effectively to create
competitive advantages (Mahoney and Pandain, 1992; Oliver, 1997), especially in rapid and unpredictable
conditions (e.g., Eisenhardt and Martin, 2000; Ethiraj et al., 2005) such as those in the early years of a
business. One way to deploy resources efficiently and effectively is for entrepreneurs to develop a
distinctive competence (Mahoney and Pandain, 1992), and one such competence is social competence
(Baron and Markman, 2003).
Social competence refers to an individual’s ability to develop and exploit resources through her
interpersonal skills. Social competence includes social perception (i.e., accuracy in perceiving others),
impression management (i.e., ability to induce favorable reactions in others), social adaptability (i.e.,
Journal of Business Diversity vol. 12(1) 2012 51
ability to adapt to a wide range of social situations), and expressiveness (i.e., ability to express emotions
and feelings in an appropriate manner), all of which are highly desired in business interactions (Baron and
Markman, 2003). Social competence is important to entrepreneurs because of the social interaction in
business (Walter et al., 2006), and it plays an important role in identifying and exploiting opportunities in
entrepreneurship (Baron and Markman, 2003). In addition, social competence affects the outcomes of
interpersonal exchanges involved in entrepreneurship (Walter et al., 2006). As such, we suspect that when
a woman entrepreneur can effectively interact with the stakeholders of her business, she can better
maintain and effectively utilize relationships to enhance the growth of her business, such as gaining
access to capital and markets, obtaining training and technical assistance, and networking.
Overall, previous research has shown the importance of social capital, reputational capital, human
capital, and social competence to entrepreneurs and has provided a general direction for the present
investigation. However, we know little about the relationships among these intangible resources, social
competence and the growth of the woman-owned entrepreneurial firm. To examine these issues, we
conducted a case study involving in-depth interviews with eleven women entrepreneurs in the mid-
Atlantic region as described below.
METHODS
Research Design
Eishenhardt (1989) suggests that a case study approach is appropriate when a phenomenon is not well
understood. Such an approach allows researchers to provide explanations of mechanisms or the rationale
underpinning observed relationships (Eisenhardt, 1989; Yin, 1984). We conducted in-depth interviews of
women entrepreneurs to gather data which we used to construct cases and theorize the relationships
among the intangible resources, social competence, and the growth of women-owned businesses.
We interviewed eleven women entrepreneurs operating in the Mid-Atlantic region of the United
States. This region provides an excellent research context because of the high number of women
entrepreneurs in the area (WIN, 2009). The businesses owned by the women entrepreneurs in our study
operated in different industries including finance, entertainment, food service, real estate, interior design,
education, apparel, and biotechnology. While most of the organizations we studied were for profit entities,
a few were nonprofit organizations, thus providing some heterogeneity in the cases selected. There was
also variation in both the age and the size of the businesses. It is not uncommon to include a diverse set of
subjects in case studies (e.g., Gilbert, 2005; Graebner and Eisenhardt, 2004). Indeed, the diverse sample
of entrepreneurs was selected to assist our exploration of how women entrepreneurs acquire, develop, and
utilize various resources and competence in achieving new venture growth.
Data Collection
The primary source of the data was in-depth personal interviews with the women entrepreneurs. We
also collected archival data from secondary sources such as company websites, brochures, published
biographies, newspaper articles, and press releases to gain a better understanding of the backgrounds of
the women entrepreneurs and their businesses. Collecting data from multiple sources provides data
triangulation and is essential to ensure the validity of the results (Yin, 1984). All of the women
entrepreneurs we interviewed earned a bachelor’s degree, and many earned a master’s and/or a doctorate
degree. The age of the women ranged from 22 to 58 years old. Demographic information of the women
entrepreneurs and basic profiles of their organizations is reported in Appendix 1.
The authors of the study conducted eleven interviews between 2007 and 2008 over 15 months. All of
the interviews lasted between 30 minutes (multiple interviews) and 2 hours (single interview), with an
average of 90 minutes with each interviewee. At the beginning of the interview, interviewees were
assured of confidentiality. All the interviews were semi-structured. The semi-structured interview style
allows interviewees to both reflect on their experiences and to use their knowledge and expertise in
generating a finer grained and more focused understanding. Using the current literature on
entrepreneurship, women entrepreneurs, and women-owned businesses as a starting point, we developed
52 Journal of Business Diversity vol. 12(1) 2012
open-ended interview questions, including questions related to the interviewees’ demographic
information and general information about their business. (Interview questions are available
upon request.) We then provided interviewees with brief definitions of the key constructs, such as social
capital, reputational capital, human capital, social competence and success. Following the definitions, we
asked interviewees to discuss factors that led to the growth of their business, as well as factors that
hampered growth. Furthermore, we asked each interviewee to discuss the usefulness to her and her
business of the intangible resources we examined, i.e., social capital, reputational capital, and human
capital.
In examining the effects of intangible resources and social competence on the growth of women-
owned businesses, we selected a rather broad term: the success of the women-owned businesses. Because
obtaining objective performance data from small and medium enterprises (SMEs) is often fraught with
difficulties largely due to reluctance to provide financial data, we used a subjective measure of
performance as has been done in previous business research (Brouthers, 2002; Brouthers and Nakos,
2004); specifically entrepreneurs’ reported their perception of the growth of their business relative to their
competitors in terms of sales growth, profit growth, funding future growth, marketing, distribution and/or
cash flow. Subjective performance measures have been found to be highly correlated with objective
measures of performance (Dess and Robinson 1984). Accordingly, the use of subjective measures may
provide valuable insight on performance when objective financial measures are not provided.
We concluded by asking the women entrepreneurs for additional comments they wanted to add to
their responses to our list of questions. Following each interview, the interviewer transcribed the
entrepreneurs’ responses to the questions. When clarification was needed, we contacted the entrepreneur
by phone or by email to obtain the necessary information to resolve the lack of clarity.
Data Analyses
In order to ensure inter-rater reliability, two of the authors of this study analyzed and coded the
qualitative data based on the interview transcripts for each case. Data analysis in this study closely
followed two major steps typical in inductive multi-case research (e.g., Graebner, 2004; Graeabner and
Eisenhardt, 2004): building individual cases and then comparing across cases to construct a conceptual
framework. Individual case studies were built by synthesizing the qualitative data from different sources
for the eleven women entrepreneurs (Eisenhardt, 1989). These case histories were then used for within-
case and cross-case analyses.
For the within-case analysis, to ensure inter-rater reliability we first worked independently on
identifying unique barriers facing women entrepreneurs and factors crucial to their success. Second, we
independently coded qualitative data involving the intangible resources, social competence, and growth of
women-owned businesses. In the coding process, we also closely examined the data describing how the
intangible resources and social competence were developed and utilized. Third, we paid close attention to
data describing the relationships among resources and social competence, and we investigated the
qualitative data related to factors that might contribute to the growth of women-owned businesses. We
drew tables and figures to help capture these emerging relationships. After the completion of the within-
case analyses, we worked together to resolve any disagreement we had in the coding and content analysis
process. We discussed the factors we identified as critical to women entrepreneurs’ success, as well as
relationships that seemed to emerge among the intangible resources and social competence in individual
cases.
After the eleven within-case analyses were completed, we conducted cross-case analyses.
Specifically, we first investigated whether similar or different themes and patterns emerged in multiple
cases. We then considered differences in patterns in refining and modifying the conceptual model that
could explain the mechanisms underpinning the entrepreneur’s success. After the cross-case analyses
were completed, we re-examined interview transcripts to ensure that the conceptual model was consistent
with the data. In short, the within- and cross-case analyses yielded a set of themes and findings reported in
the following section.
Journal of Business Diversity vol. 12(1) 2012 53
FINDINGS
Barriers Facing Women Entrepreneurs
The cross-case analyses revealed unique challenges facing women entrepreneurs. First, the women
entrepreneurs agreed that the barriers to growth they faced were due to the social perceptions of their
gender roles. One of the major barriers they identified when they started their business relates to the lack
of social acceptance of women entrepreneurs and women-owned businesses. For example, entrepreneur
#1 said that “the general perception from society is that women cannot run their own business.” Even
among those who accept women entrepreneurs and women-owned businesses, there are many who do not
accept them across all industries. Several interviewees noted that people have fewer negative attitudes
about women entrepreneurs operating in industries in which women have traditionally worked. For
example, entrepreneur #9 mentioned, “Mrs. Fields are okay but other types of ventures led by women are
not!”
Another barrier identified by several interviewees (e.g., Entrepreneur #1, Entrepreneur #4 and
Entrepreneur #11) is low credibility. Limited training, experience, and/or education to run a business
might contribute to the low credibility of women entrepreneurs. While men entrepreneurs may face a
similar problem, interviewees mentioned that the general perception of women-led businesses coupled
with insufficient experience and/or education might diminish women entrepreneurs’ credibility. In
addition, what is expected of women entrepreneurs seem to be higher. Women entrepreneurs reported to
having to work much harder than their men counterparts to achieve the same level of credibility, and/or
that they had to earn more education than that required of men to prove that their credibility and
capability (e.g., Entrepreneur #2, Entrepreneur #4).
A third barrier that the women entrepreneurs we interviewed reported was difficulty in accessing
networks that are dominated by men. Seven of the interviewees (e.g., Entrepreneur # 1, Entrepreneur #2,
Entrepreneur #5, Entrepreneur #6, Entrepreneur #7, Entrepreneur #9, and Entrepreneur #10) referred to
the “old boys club” and the big challenge this network presents to women entrepreneurs. (The old boys
club originally referred to the social and business connections among former students of male-only private
schools.) They mentioned that this network of men often dominates the organizations that control
resources (such as funding) vital to the startup and growth of businesses. Our interviewees further
indicated that because they were women, the men in the network limited their access to resources. In
some industries, there seems to be a stronger network of powerful men than in others. For example, one
interviewee (Entrepreneur #2) who operates a financial consulting firm explained, “gender issues could be
a high barrier… entering into a finance network is difficult for women.” Similarly, another interviewee
(Entrepreneur #10) described, “there is a boys’ network in my industry.” In addition, there appears to be
some differences in how men and women form networks which may create barriers for women
entrepreneurs or hinder them. One interviewee noted (Entrepreneur #10), “They go drinking and are
uncomfortable inviting me to go with them.” Entrepreneur #1 also commented that “to network women
can go out with men for a beer and watch a football game, but doing that could put their personal
reputation at risk. Tricky to balance!”
Despite the barriers women entrepreneurs face, we found that women entrepreneurs can overcome the
barriers by cultivating and using social-, reputational-, and human capital as well as social competence to
grow their business. In the following sections, we report our findings on how the three forms of capital
and social competence affect the growth of women-owned businesses.
Human Capital and the Growth of Women-Owned Businesses
The women entrepreneurs we interviewed described human capital as the cornerstone of their
success. All of the women interviewed earned a bachelor’s degree. Five earned a master’s degree, and two
earned a doctorate degree. They also had a wealth of work experience. Many of our interviewees worked
in large established companies prior to launching their own businesses. They reported that their human
capital, especially experience and education, was important to their success. Their human capital helped
them pursue and exploit opportunities which led to the startup and growth of their businesses. For
54 Journal of Business Diversity vol. 12(1) 2012
example, one interviewee (Entrepreneur #6) noted that her previous work experience helped her develop a
novel methodology to launch new products. Another interviewee (Entrepreneur #4) indicated that her
Executive MBA provided her with financial and management skills that were critical for sustaining her
company’s expansion and healthy financial growth. In sum, our interviews indicate that human capital is
important for women entrepreneurs, hence supporting prior research on human capital and the success of
new businesses (e.g., Dyke et al., 1992; Gimmon and Levie, 2009; Manolova et al., 2007; Rauch et al.,
2005). As such, we expect that,
Proposition 1: A woman entrepreneur’s human capital is directly and positively related to
the growth of her business.
More interestingly, our findings suggest that human capital helped women entrepreneurs develop a
positive reputational capital. For women entrepreneurs, human capital not only reflects their knowledge,
skills, and information-processing capabilities, but it also provides credibility that signals to potential
investors, employees, and customers about the future prospects of the women entrepreneurs and their
business. Several interviewees commented on the importance of human capital:
“Unlike men entrepreneurs, women entrepreneurs have to demonstrate their education
and functional experience to establish their credibility and to sustain their businesses.
Human capital is the fundamental key to women’s entrepreneurial success.”
(Entrepreneur #1)
“In order to prove my credibility, reliability and professionalism, I have to highlight my
education and business experiences to investors, suppliers and clients, including an
EMBA degree, over 20 years experience in a related area, and I am also a proud winner
of an Entrepreneurial Business Plan Competition. I don’t think this is necessary for a man
entrepreneur.” (Entrepreneur #3)
Having the specific knowledge and skills for the entrepreneur’s specific type of business is vital to
success. Education is an indication of an individual’s knowledge, skills, and capability to generate and
implement creative solutions to solve complex problems (Bantel and Jackson, 1989). For example, our
interviewees revealed the following:
“Although I have had more than 20 years of industry experience in financial consulting
services, the business model I launched (an education program) has not been successful
simply due to the fact that I cannot prove myself to be competent without a degree in
education.” (Entrepreneur #2)
“Human capital is essential to women’s entrepreneurial success. It does not require
intangible assets for men to start up a new business. However, it requires a woman
entrepreneur to have the education and experiences to prove her credibility and
professionalism to the stakeholders, such as government officials, suppliers, investors,
bankers, and the larger community”. (Entrepreneur #2)
Thus, in light of the interviews, it appears that women entrepreneurs’ human capital, especially their
formal education and prior experience can significantly provide credibility and help obtain reputational
capital. As such, we expect that,
Proposition 2: A woman entrepreneur’s human capital is directly and positively related to
her reputational capital.
Our results reveal that women entrepreneurs’ human capital also contributes to the acquisition of
social capital. In our study, we found that human capital helped our interviewees establish networks of
Journal of Business Diversity vol. 12(1) 2012 55
relationships that are important to their success. For example, several of our interviewees explained that
participating in academic programs such as an Executive MBA program or professional training in
addition to their prior business experience provided them with opportunities to cultivate new social
relationships which benefited their business growth. One interviewee described the importance of her
education in developing social capital as follows:
“My former entrepreneurial training bridges the gap between academics and the business
community. My educational experience has helped me develop effective social networks.
I have met some influential executives at the school [business plan] competition and
some of them have joined my company as board members.” (Entrepreneur #3)
Human capital is especially beneficial when there is incomplete information about women
entrepreneurs’ reliability and professionalism in managing a business. Human capital (e.g., education)
increases confidence in an entrepreneur’s capability of managing a company (Carter et al., 2003). Further,
women entrepreneurs’ human capital (e.g., prior experience) can assist them in developing relationships
with shareholders (Shane and Stuart, 2002). For instance, our interviewees made the following comments:
“My experience and education helped me connect with business people. Judging from my
human capital, the business people are willing to help with my business.” (Entrepreneur
#2)
“It is my human capital that facilitates the acquisition of other valuable resources such as
social capital and reputational capital that enhance entrepreneurial success.”
(Entrepreneur #1)
As such, we expect that,
Proposition 3: A woman entrepreneur’s human capital is directly and positively related to
her social capital.
Social Capital and the Growth of Women-Owned Businesses
While the women entrepreneurs we interviewed emphasized the importance of human capital in
entrepreneurship, none suggested that human capital alone made them successful. They indicated that
social capital is of paramount importance. Interestingly, our interviewees indicated that social capital is
important for both women and men entrepreneurs, but they highlighted some differences. They noted that
women entrepreneurs often develop their networks more slowly and more deliberately than men
entrepreneurs do. They also indicated that women entrepreneurs’ personal and business networks often
overlap. The women we interviewed noted that women entrepreneurs often transform their personal
network ties into business network ties and vice versa, while men entrepreneurs tend to separate their
personal and business networks. Several women entrepreneurs explained as follows:
“My personal networks have been helpful in achieving entrepreneurial success. For
instance, my personal mentor and advisory board members have supported the growth of
my company. My friend and mentor was a former president of a local performing arts
center, who later sat on my advisory board.” (Entrepreneur #3)
“Women entrepreneurs approach networks differently. Men are ‘friends’ with other men
after going out for a beer. This is not so easy with women. For women, ‘friends’ are more
substantive.” (Entrepreneur #1)
Further, men entrepreneurs develop and maintain their social relations when they engage in sports and
recreational activities such as watching a football game, playing golf, or going out for a beer. Women
entrepreneurs develop their networks by helping other people or asking them for assistance. For example,
56 Journal of Business Diversity vol. 12(1) 2012
one woman mentioned that “women inherently want to help each other. Women are drawn to inquire and
remember what is important to others. This leads to friendships in business relations” (Entrepreneur #11).
Furthermore, six interviewees (e.g., Entrepreneur #3, Entrepreneur #5, Entrepreneur #6, Entrepreneur #8,
Entrepreneur #10, and Entrepreneur #11) noted that women are generally good at asking for help from
people they know, and this can lead to building a network and more generally acquiring social capital.
The women entrepreneurs we interviewed built their networks over time and took great effort to build
their networks including a lot of one-on-one interaction. For example, several women entrepreneurs
commented as follows:
“I have strong social capital and have developed a network of more than 100 clients
through one-on-one relationship building that I believe have fueled the success of my
business.” (Entrepreneur #6)
“When compared to men entrepreneurs, women entrepreneurs need to be more strategic
in networking, especially one-on-one relationship development.” (Entrepreneur #8)
All of the women entrepreneurs we interviewed indicated that they were satisfied with their social
capital and believed that it contributed to the startup and growth of their business and their personal
success. Specifically, the women entrepreneurs noted that their networks played an important role in
accessing important information and advice, as well as critical knowledge regarding their day-to-day
operations, business growth, and expansion. Our findings are consistent with prior research (e.g., Cable
and Shane, 1997; Carter et al., 2003) on the benefits of possessing social capital for women entrepreneurs
in that social capital enables them to access valuable resources and ensures their market growth and
expansion. For instance, our interviewees commented on how social capital helped them identify and
develop opportunities and add value to grow their business as follows:
“My professional networks have always been helpful when I encounter problems.”
(Entrepreneur #3)
“I have to credit the fast growth of my business to my social capital. My personal
networks and relationships are helpful in achieving entrepreneurial success. I am also
actively involved in several business networking groups. I believe that social capital is
especially important for a women entrepreneur given all the challenges we have.”
(Entrepreneur #5)
“Social capital is very important. People do business with people they like. My social
capital helped me secure licenses, manufacturing, and distribution.” (Entrepreneur #4)
“I have a huge network in different sectors including one in the sports sector that benefits
my business. My network contacts helped me with my business. I am an industry
insider.” (Entrepreneur #8)
As such, we propose that,
Proposition 4: A woman entrepreneur’s social capital is directly and positively related to
the growth of her business.
Furthermore, there appears to be a relationship between social capital and reputational capital. Several
interviewees suggested that networks assist in the development of reputational capital. They indicated that
establishing strategic alliances with influential organizations is a good way to develop their reputational
capital. For example, our interviewees noted,
“Reputational capital is key to success. It sustains the company’s growth. I have
developed and maintained my reputational capital through establishing strategic alliances
with big corporations.” (Entrepreneur # 1)
Journal of Business Diversity vol. 12(1) 2012 57
“Working with an established firm helps increase my reputational capital.” (Entrepreneur
# 6)
In light of the relationship that seems to exist between social capital and reputational capital, we
propose the following:
Proposition 5: A woman entrepreneur’s social capital is directly and positively related to
her reputational capital.
Reputational Capital and the Growth of Women-Owned Businesses
Among the women we interviewed, most considered reputational capital to be quite important in the
startup and growth of their business, and that a lack of reputational capital creates a significant obstacle to
growing a business. Reputational capital is an intangible resource (Fombrun, 1996) that helps reduce
transaction costs and the need to monitor business relationships (Williamson, 1975). Reputational capital
seems to aid women-owned businesses’ ability and flexibility to attract resources. For instance, one
women entrepreneur comments:
“I am very satisfied with my reputational capital and attribute that to my business
success. I have to continually build my reputational capital to reduce transaction issues
involved in businesses operations and to attract more customers and investors to sustain
the growth of the business.” (Entrepreneur #10)
Furthermore, we found that reputational capital needs to be developed rather quickly. Our
interviewees noted that unlike men entrepreneurs, women entrepreneurs often have to establish a good
reputation in a relatively short period of time to increase the potential for success. For instance, one
interviewee reported the following:
“Unlike men entrepreneurs, women have to develop their reputational capital in a
relatively short period of time to signal to the stakeholders their competence and
professionalism.” (Entrepreneur #2)
“Unlike men entrepreneurs, women do not have the flexibility or cushion to make up lost
chances. In general, women have less time to build their reputation and respect from the
community.” (Entrepreneur #3)
We so found that reputational capital builds credibility. Credibility has been argued to be important in
starting and growing a business (Shapero, 1982). Reputational capital is very valuable to women
entrepreneurs, especially when they are challenged by lack of credibility, access to markets and networks,
and business growth and expansion (Zimmerman Treichel and Scott, 2006). For instance, our
interviewees noted the following:
“Reputational capital is extremely important which has more ‘teeth’ for women
entrepreneurs and makes them more believable and works more effectively for their
businesses”. (Entrepreneur # 6)
“My reputational capital has a strong influence upon stakeholder beliefs, attitudes and
behaviors when there is incomplete information concerning the operation of the non-
profit organization”. (Entrepreneur #3)
“I have a good reputation for being persistent, tenacious, and aggressive. Reputational
capital is essential to my entrepreneurial success.” (Entrepreneur #10)
Our results suggest that a woman entrepreneur’s reputational capital can ameliorate the negative
effects associated with traditional social perceptions of women-owned businesses, as well as positively
58 Journal of Business Diversity vol. 12(1) 2012
shape stakeholders’ beliefs, perceptions and attitudes towards women entrepreneurs’ legitimacy,
credibility, reliability, and professionalism, thereby contributing to a woman entrepreneur’s business
growth. As such, we propose the following:
Proposition 6: A woman entrepreneur’s reputational capital is directly and positively
related to the growth of her business.
Social Competence and the Growth of Women-Owned Businesses
In addition to the importance of human-, social-, and reputational capital, the women entrepreneurs
we interviewed indicated that social competence played an important role in their success. Social
competence, such as the ability to motivate people, concisely convey ideas, impress people, and adapt to
internal and external changes, appears to be critical to the successful startup and growth of a women-
owned businesses. For example, the women entrepreneurs commented as follows:
“Social competence is important for entrepreneurial growth.... It is essential to have the
social expressiveness to make a presentation in public. It requires social skills to convince
others, such as investors and clients, that the services are unique and valuable. It is
important to have all social skills to convince investors about the business model.”
(Entrepreneur #2)
“Social competence is important because it is essential for a non-profit organization to be
understood by stakeholders, which requires articulateness and expressiveness.”
(Entrepreneur #3)
Interestingly, we found that women entrepreneurs who did not achieve their desired growth also
reported they lacked adequate social competence. One interviewee reflected the following on social
competence:
“Although I possess strong social capital and human capital, they are not so valuable
without the presence of social competence. I need to enhance my social interactive skills
to grow my business” (Entrepreneur #8)
Even though the women we interviewed reported that the intangible resources of human-, social-, and
reputational capital are each related to the success of women entrepreneurs and specifically the growth of
their businesses, most of the women indicated that social competence plays an important role in achieving
success. For example,
“People want to work with those who are known as hardworking, passionate and honest.
We need to have social skills to inform people about what we can do and what our
expertise is.” (Entrepreneur #4)
“Social competence is extremely important because it opens doors. People want to help
me because of my social competence. Social competence helps me get important things
done, such as getting a license.” (Entrepreneur #8)
“It is especially important to be able to adapt to challenging situations, such as to diffuse
clients’ angers and to convince clients in accepting an important offer. A woman
entrepreneur’s ability to convince others is essential to achieving her business success.”
(Entrepreneur #1)
“Social competence is essential for a non-profit organization to be understood by
stakeholders, which requires articulateness, expressiveness. Women entrepreneurs do not
have the flexibility or cushion to make up lost chances. Women also have less time to
build their reputation and respect from the community. As such, social competence
becomes an important aspect to grow and sustain my business.” (Entrepreneur # 3)
Journal of Business Diversity vol. 12(1) 2012 59
Based on these findings, we propose the following:
Proposition 7: A woman entrepreneur’s social competence is directly and positively
related to the growth of her business.
The women entrepreneurs in our study seemed to indicate that women entrepreneurs need both capital
and social competence. They need social competence to better utilize their social-, human-, and
reputational capital. According to Baron and Markman (2003), the human capital of an entrepreneur
cannot be a source of competitive advantage without the social competence and skills to explore and
exploit productive opportunities, to cope with the requirements of a start-up, and to manage different
stages of entrepreneurship. In particular, social competence is most useful for entrepreneurs in situations
where they cannot simply rely on past social relations or on clearly defined norms and roles (Baron and
Markman, 2003).
From our interviews, it appears that although social-, human, and reputational capital are important
for women entrepreneurs, it is especially important for women entrepreneurs to know how to leverage
such capital to communicate their credibility to new suppliers, investors, and others. The women we
interviewed noted that social competence can enhance the relationship between an entrepreneur’s capital
and her success. For example,
“A woman entrepreneur’s social expressiveness, social perception, impression
management and adaptability are critical and key to my success. It is important to possess
human capital and social capital, but I have to have the capability to make impressions on
contractors and clients, otherwise business will not grow. If I don’t have the social
expressiveness to make a presentation in public or to be persuasive to my investors and
clients, I don’t think I can convince those investors about my business just with my
impressive resume.” (Entrepreneur #2)
“Other resources such as social capital, reputational capital and human capital are not
valuable without the presence of social competence.” (Entrepreneur #11)
“It requires social skills to convince others, such as investors and clients, that our services
are unique and valuable. Based on my social competence, I was able to convince
investors about my business model. I am satisfied with my social competence and believe
that my social competence enhances my other resources.” (Entrepreneur #4)
“Although it is critical to possess social capital, reputational capital and human capital, it
is especially important to know how to use these resources in a way to be able to adapt to
challenging situations, such as to diffuse clients’ angers and to convince clients in
accepting my ideas. The ability to convince others is essential in my business.”
(Entrepreneur #1)
It appears that without social competence, a woman entrepreneur may struggle to effectively use her
intangible resources to startup and grow her business. The qualitative data suggest that a woman
entrepreneur’s social competence is essential to adapting, integrating, and exploiting her social-, human-,
and reputational capital. Informed by this finding, we propose that a woman entrepreneur’s social
competence will interact with these three forms of capital in influencing the growth of her business. As
such, we expect that,
Proposition 8: A women entrepreneur’s social competence can enhance the relationships
between intangible resources such as human-, social-, and reputational capital and her
business growth.
In light of the above findings on the three forms of capital and social competence, we constructed
Figure 1(See Appendix 2) to present the relationships we identified from the findings of our case
60 Journal of Business Diversity vol. 12(1) 2012
analyses, i.e.,, relationships among intangible resources, social competence, and the growth of the
women-owned businesses. Our findings revealed that intangible resources were developed or acquired in
a sequence over time. Specifically, human capital and social capital were acquired or developed first, and
then formed the basis for obtaining reputational capital. Further, our findings suggest that while a woman
entrepreneur’s capital is related to the growth of her business, social competence gives women
entrepreneurs leverage in better utilizing intangible resources in starting and growing their businesses.
DISCUSSION
Entrepreneurship scholars have investigated aspects of how entrepreneurs identify and evaluate
opportunities as well as how to obtain and exploit resources such as intangible resources. While intangible
resources have been shown to strongly relate to firms’ competitive advantage (Barney, 1991; Rumelt,
1984; Wernerfelt, 1984), they have been understudied in entrepreneurship research. To narrow this gap, in
this paper, we examined three types of intangible resources of women entrepreneurs: social-, human-, and
reputational capital. We investigated how these three forms of intangible resources contribute to the
growth of their business. Specifically, our findings support the importance of women entrepreneurs’ social
capital in the form of networks, human capital in the form of education and functional experience, and
reputational capital in the form of credibility. Our finding also suggest that a woman entrepreneur’s
intangible resources constitute a wide array of potentialities including a hierarchical order in which
human capital develops first and influences the attainment of social and reputational capital. In addition,
we also examined the role of women entrepreneurs’ social competence in enhancing the utility of the
intangible resources, hence influencing the growth of the women-owned businesses. We found that social
competence plays a key role in leveraging the effects of all three types of intangible resources. A woman
entrepreneur’s social competence appears to be essential to adapting, integrating, and exploiting
intangible resources to the success of her business.
To our knowledge, this is the first study to examine the influence of the entrepreneur’s intangible
resources as well as social competence in relation to the growth of her business. It enriches current
literature on entrepreneurship in the following aspects. First, this study focuses on women entrepreneurs.
Women entrepreneurs and the businesses they own are growing dramatically, and women entrepreneurs
are recognized as a driving force in the U.S. economy in terms of the number of businesses owned, the
revenues generated, and/or the number of people employed (Greene et al., 2003). This study enriches our
understanding of women entrepreneurs by focusing on the unique challenges they face and how they can
address these challenges through effective utilization of their intangible resources and social competence.
A qualitative approach allows us to take an initial step in studying the importance of resources and social
competence to the success of women entrepreneurs. Our findings indicate that women entrepreneurs face
unique challenges which require theory and practice different from mainstream entrepreneurship theory
and practice. Future research empirically examining these characteristics would be beneficial.
Second, instead of viewing an entrepreneur’s intangible resources and competence separately on a
piecemeal basis, this study examines how entrepreneurs’ intangible resources and their social competence
influence the growth of their entrepreneurial firms. This integrative approach fills the gaps in
entrepreneurship literature by incorporating both the resource-based view of the firm (Barney, 1991;
Eisenhardt and Martin 2000) and the social competence perspective (Baron and Markman, 2003) to
advance our understanding of various factors that may lead to the growth of women-owned businesses.
Third, given the unique challenges women entrepreneurs face, it is important to examine how a
collection of resources (social-, reputational-, and human capital) relate to the growth of the
entrepreneurial firm. Our analysis suggests that collectively, a woman entrepreneur’s intangible resources
constitute a wide array of potentialities. Our case analyses also revealed a hierarchical order in which
human capital was first developed which influenced the attainment of social- and reputational capital.
Finally, our findings suggest that intangible resources alone cannot lead to entrepreneurial success.
Social competence enhances the utility of resources and enables a woman entrepreneur to more
effectively transform her intangible resources into valuable outputs.
Journal of Business Diversity vol. 12(1) 2012 61
Although this study is exploratory and the findings should be validated by future empirical research,
this study offers potential implications for women entrepreneurs. It demonstrates the importance of
intangible resources of women entrepreneurs in growing their business. It also provides support for the
importance of social competence and the role that social competence plays in enabling women
entrepreneurs to use their intangible resources to generate success and grow their business. While women
entrepreneurs may have the networks, reputation, education, and experience necessary to make their
business survive in the short term; in the long run, they need social competence to realize the fullest
potential of these valuable resources in order to succeed. Because women in general are naturally good at
being attentive to others’ needs and maintaining social relationships, social competence may provide
women entrepreneurs with needed capabilities to sustain their initial success and continuously grow their
business.
There are several shortcomings in this paper. First, as we stated earlier, this is a first step in examining
the relationship among intangible resources, social competence, and the growth of the women-owned
businesses. Future empirical studies based on large samples are needed to further test the relationships
proposed in this study. Second, since our results are drawn from interviews with women entrepreneurs in
the mid-Atlantic region, future research with an expanded sample of women entrepreneurs from different
geographic regions and countries would enhance the generalizability of the findings, and would permit a
better understanding of women entrepreneurs and the performance correlates of women entrepreneurial
success. Finally, a more comprehensive measure of new venture growth is needed. In addition to
conceptualize growth by sales growth, profit growth, asset growth, and other forms of growth, it is
meaningful to include internal development, such as the development of products, resource base, and
organizational efficiency, that are relevant and meaningful to practitioners (Achtenhagen et al., 2010).
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Journal of Business Diversity vol. 12(1) 2012 69
APPENDIX 1
PROFILES OF INTERVIEWEES
Interviewees Company Year of
establishment
Industry
Entrepreneur #1 Design Company 1998 Home refurbishing and landscape
design
Entrepreneur #2 Financial Consulting
Company
2002 Financial consulting to
companies that are in transition
Entrepreneur #3 Dance Company 2005 Non-profit organization in the
performing arts which also
teaches dance
Entrepreneur #4 Personal Chef Service 2005 Preparation of meals for
individuals and families
Entrepreneur #5 Nongovernmental
Organization
2006 Non-profit organization
providing solar panels to
hospitals in Africa
Entrepreneur #6 Marketing Company 1991 Branding services for high
technology and science
companies
Entrepreneur #7 Medical Device Company 2002 Medical device company
addressing spikes in body
temperature
Entrepreneur #8 Women’s Apparel 2005 Women’s clothing manufacturer
branded with professional sports
logos
Entrepreneur #9 Professional Development
Consulting
2002 Career consulting for college
athletes
Entrepreneur #10 Fitness Center 2007 Family oriented fitness center
Entrepreneur #11 Disability Consulting
Company
1991 Consulting services to assist
people with disabilities on
employment related issues
70 Journal of Business Diversity vol. 12(1) 2012
APPENDIX 2
FIGURE 1
A CONCEPTUAL MODEL OF WOMEN ENTREPRENEURS’ INTANGIBLE RESOURCES,
SOCIAL COMPETENCE, AND FIRM GROWTH
Women entrepreneur’s social
capital (personal and
professional networks)
Women entrepreneur’s
reputational capital
(credibility)
Growth of women-owned
businesses (Sales level, sales
growth, profits, future growth,
marketing, distribution, cash flow)
Social competence
(Social perception, impression
management, social adaptability,
expressiveness)
Women entrepreneur’s
human capital (education and
experience)
P1
P2
P3
P4
P6
P5
P8
P8
P8
P7
Journal of Business Diversity vol. 12(1) 2012 71
doc_794502429.pdf
In this particular brief elucidation about growth of women owned businesses the effects of intangible resources and social competence.
Growth of Women-Owned Businesses: The Effects of Intangible
Resources and Social Competence
Crystal X. Jiang
Bryant University
Monica A. Zimmerman
West Chester University
Grace Chun Guo
Sacred Heart University
Previous research suggests that women entrepreneurs face many challenges in starting and growing a
business. In this study, we examine the relationship of intangible resources and the growth of women-
owned businesses. We focus on four intangible resources: social-, human-, and reputational capital, as
well as social competence. Using case studies of women entrepreneurs, we found that a woman
entrepreneur’s social-, human-, and reputational capital are related to the growth of her business. We also
found that social competence moderates the social-, human-, and reputational capital – growth
relationship in women entrepreneurs.
INTRODUCTION
The number of women-owned businesses is growing dramatically in the United States. Between 1992
and 2006, the number of women-owned businesses has increased from 5.4 million to 10.4 million, and
they represent an increasing share of the small businesses that contributes to U.S. economic growth
(Center for Women’s Business Research, 2007). According to the Small Business Administration (2005),
women-owned businesses generated US$3.6 trillion in sales and accounted for 55% of all new U.S.
businesses in 2004.
Although women entrepreneurs are becoming major contributors and players in the U.S. economy
(Center for Women’s Business Research, 2007), they face many challenges including accessing capital
and markets, maintaining cash flow, obtaining training and technical assistance, managing business
growth and expansion, establishing client budget constraints, and overcoming negative perceptions of
women entrepreneurs (e.g., Hadary, 2010; Hisrich, 1989; Hisrich and Brush, 1984, 1986; Hisrich and
O’Brien, 1981; National Women’s Business Council, 2005; NAWBO, 2004; Zimmerman Treichel and
Scott, 2006). Many of these challenges can be attributed to a lack of resources that startups and young
firms face (Stinchombe, 1965; Zimmerman and Zeitz, 2002).
In the study of women entrepreneurs, a considerable amount of research has examined financial
resources or the lack thereof (Buttner and Rosen, 1988; Gatewood et al., 2003; Greene et al., 2001;
Hadary, 2010; Hisrich and Brush, 1984; Hisrich and O’Brien, 1981; Neider, 1987; Olm et al., 1985).
Journal of Business Diversity vol. 12(1) 2012 47
Although tangible resources (such as financial resources) are critical for start-ups, previous studies have
shown that relative to tangible resources, intangible resources play a more important role in a company’s
competitive advantage (e.g., Amit and Schoemaker, 1993; Dierickx and Cool, 1989; Hitt et al., 2001).
There is an increasing consensus among strategy scholars that intangible resources are crucial drivers of
firms’ growth and competitive advantage (e.g., Amit and Schoemaker, 1993; Dierickx and Cool, 1989;
Hitt, Bierman, Shimizu, and Kochhar, 2001), yet we have a limited understanding of the effects of
intangible resources on the growth of women-owned businesses. In this study, we attempt to narrow this
knowledge gap by examining the impact of intangible resources on the growth of women-owned
businesses.
Intangible resources are generally considered as soft resources such as knowledge and information
(Hall, 1992, 1993). Following previous studies (Fernández, Montes, and Vázquez, 2000; Hall, 1992,
1993), we define intangible resources as assets that woman-owned businesses possess which include
social capital (network relationships), relational capital (the reputation of products and companies) and
human capital (generic knowledge or subjective resources of know-how. We investigate how these three
forms of intangible resources contribute to the growth of their businesses.
Further, because entrepreneurs must be able to deploy their intangible resources efficiently and
effectively to create competitive advantage and business success (e.g., Mahoney and Pandain, 1992;
Oliver, 1997), we also addressed the role of women entrepreneurs’ social competence in enhancing the
utility of the intangible resources and in influencing the growth of their businesses. According to the
social competence perspective, entrepreneurs’ competencies play an important role in their success (e.g.,
Chandler and Jansen, 1992; Smith et al., 2001). Social competence, i.e., an individual’s ability to develop
and exploit resources through interpersonal skills, has been linked to the success of entrepreneurs (Baron
and Markman, 2003). While social competence is important to all entrepreneurs, it may be especially
important to women entrepreneurs because of the importance of interpersonal skills and their relationship
to the success of women entrepreneurs (Aldrich, 1989; Brush, 1992; Gundry and Ben-Yoseph, 1998).
Due to the paucity of research on these issues, we adopted a case study method involving in-depth
personal interviews with woman entrepreneurs in the mid-Atlantic area of the United States. Our study
enriches current entrepreneurship literature by adopting an integrative approach in examining how the
women entrepreneurs’ intangible resources and their social competence influence the growth of their
firms. We invoke both the resource-based view of the firm (Barney, 1991; Eisenhardt and Martin 2000)
and the social competence perspective (Baron and Markman, 2003) to advance current understanding of
various factors that may lead to the growth of women-owned businesses.
We organize the study as follows. We begin with a review of literature and define key terms. After
detailing our research design and data collection, we use cases to illustrate our major findings and provide
interpretations. This study concludes with discussion and implications.
LITERATURE REVIEW
Understanding Women Entrepreneurs
Much of the research on women entrepreneurs has addressed the increasing number and visibility of
women entrepreneurs (e.g., Gundry et al., 2002); differences in groups of women business owners such as
racial or national groups (e.g., Maysami and Goby, 1999); psychological or sociological variables relating
the characteristics of women business owners to characteristics of their business (e.g., Brush, 1992;
Hisrich and Brush, 1983; Sexton and Bowman-Upton, 1990), and the relationship of personal attributes
and the growth of women-owned businesses (e.g., DeTienne and Chandler, 2007; Manolova et al., 2007).
The challenges faced by women entrepreneurs in launching and growing their businesses is another
frequently studied aspect of research addressing women entrepreneurs (e.g., National Women’s Business
Council, 2005; NAWBO, 2004; Zimmerman Treichel and Scott, 2006). Another frequently studied aspect
is the comparison of women entrepreneurs and men entrepreneurs (e.g., Brush, 1992; Gundry et al.,
2002).
While the characteristics of men and women entrepreneurs are similar, researchers observe that
48 Journal of Business Diversity vol. 12(1) 2012
women entrepreneurs have to overcome negative social beliefs about women (e.g., Hadary, 2010; Hisrich
and O’Brien, 1981) which men do not have to address. For instance, despite a solid record of sales and
profits, women entrepreneurs are often perceived as lacking ability to grow their businesses (Hadary,
2010), are categorized as “risky” borrowers by loan officers, and are viewed as less credit worthy than
their men counterparts (Brush, 1997). These negative perceptions make it difficult for women
entrepreneurs to secure tangible resources (e.g., financial resources) necessary to grow their business
(Alsos et al., 2006; Buttner and Rosen, 1988; Godwin et al., 2006). Other research suggests that women
entrepreneurs’ intangible resources, such as their access to informal and formal networks, enhance
business growth (e.g., Kickul, Gundry, and Sampson, 2007).
Intangible Resources and Firm Growth: A Resource-Based View Approach
According to the Resource-based View (RBV), the firm can be understood as a bundle of resources
and capabilities and possession of such a resource bundle determines the firm’s ability to survive (e.g.,
Amit and Schoemaker, 1993; Barney, 1991; Mahoney and Pandian, 1992). Recent research in
entrepreneurship has used the RBV in explaining entrepreneurial processes (Dollinger, 1999) and new
venture strategic behavior (Brush, Green, and Hart, 2001; Foss, Klein, Kor, and Mahoney, 2008;
Lichtenstein and Brush, 2011). In general, a firm may possess different types of resources, defined as “an
asset or input to production (tangible or intangible) that an organization owns, controls, or has access to
on a semi-permanent basis” (Helfat and Peteraf, 2003:999). While both tangible and intangible resources
are important to a firm, intangible resources are considered crucial drivers of a firm’s competitive
advantage and superior performance (e.g., Amit and Schoemaker, 1993; Dierickx and Cool, 1989; Hitt, et
al., 2001). And so in this study we focus upon intangible resources.
There are a number of definitions of intangible resources (e.g., Conner and Prahalad, 1996; Fernández
et al., 2000; Kogut and Zander, 1992). One generally accepted definition of intangible resources is Hall’s
(1992) definition which includes technological capital (intellectual property rights, contracts, trade
secrets, and public knowledge such as scientific works); human capital (generic knowledge or subjective
resources of know-how); organizational capital (organizational culture); and relational capital (the
reputations of products and companies, and network relationships) (Fernández, Montes, and Vázquez,
2000; Hall, 1992, 1993). In this study, we focus on relational capital and human capital, and further define
relational capital as social capital (network relationships) and reputational capital (the reputations of
products and companies). We examine social capital because it provides entrepreneurs with credibility,
access to valuable information and resources, as well as enhanced opportunity recognition capability
(Baron and Markman, 2000; Cable and Shane, 1997; Carter et al., 2003; Manolova, et al., 2007). We
examine reputational capital because it can maximize socioeconomic and moral status of a business
(Hayton, 2005), thereby allowing it to achieve lasting profitability (Roberts and Dowling, 2002) and new
venture growth. We also examine human capital because of its relationship to new venture growth (Dyke
et al., 1992; Manolova et al., 2007; Rauch et al., 2005). In the following sections, we review these three
forms of intangible resources and explore how they relate to the growth of women-owned businesses.
Social Capital
Social capital refers to “the aggregate of the actual or potential resources which are linked to
possession of a durable network of more or less institutionalized relationships of mutual acquaintance and
recognition” (Bourdieu, 1986: 248). Social capital has been conceptualized as a set of social resources
embedded in relationships (Burt, 1992; Tsai and Ghoshal, 1998), including relationships with individuals
(i.e. Belliveau et al., 1996), organizations (Baker, 1990; Burt, 1992), societies (Putnam, 1995) and
business units (Tsai and Ghoshal, 1998). It can be derived from the norms, networks, and relationships of
the social structure in which an individual is embedded (Putnam, 1995). Networks are one important form
of social capital. They “provide a conduit for the exchange of information and resources that can enhance
the success and survival of women owned businesses” (Carter et al., 2003:6).
In the entrepreneurship literature, researchers have found that social capital aids entrepreneurs in
opportunity perception, gaining credibility and providing access to valuable information and resources
Journal of Business Diversity vol. 12(1) 2012 49
(Baron and Markman, 2000; Cable and Shane, 1997; Carter et al., 2003; Kwon and Arenius, 2010;
Manolova, et al., 2007). The social capital of entrepreneurs enhances their opportunity recognition
capabilities by helping them acquire opportunity-related knowledge, forecast future trends, evaluate
information and decisions, as well as react proactively to future trends (Carter et al., 2003). For instance,
Kickul, Gundry, and Sampson (2007) posited that for women-owned businesses, formal and informal
social capital enhances a business’ market growth and expansion. Given the importance of social capital
for entrepreneurs, when women entrepreneurs face specific challenges in growing their businesses, such
as obtaining start-up funding, financial management, and the development of effective marketing and
advertising (Hisrich and Brush, 1983; Pellegrino and Reece, 1982), social capital appears to be important
to the growth of women-owned businesses.
Reputational Capital
A second form of intangible resources is reputational capital. Whereas social capital is considered to
be a set of social resources embedded in relationships (Burt, 1992; Tsai and Ghoshal, 1998), reputational
capital refers to social resources and legitimacy certified by well-regarded individuals and organizations
(Hoang and Antoncic, 2003; Oliver, 1997; Powell and DiMaggio, 1991). Reputational capital refers to "a
form of intangible wealth that is closely related to what accountants term ‘goodwill’ and marketers refer
to as ‘brand equity’" (Fombrun, 1996: 11). Reputational capital provides many benefits including
reduction of information asymmetry between a business and its stakeholders (Peng et al., 2005). In
particular, when there is insufficient information among players, reputation is an asset that can generate
future rents by affecting stakeholders’ beliefs, attitudes, and behaviors (Hayton, 2005; Weigelt and
Camerer, 1988).
In the case of entrepreneurs, a high level of positive reputational capital informs stakeholders about
the values of the entrepreneurs, their socioeconomic and moral status (Petrick, et al., 1999), as well as
their future prospects (Certo, 2003). A positive reputation suggests that an entrepreneur’s business is in
the right market and provides competitive products and services (Petrick, et al., 1999). Further, it can also
reduce the transaction costs associated with an exchange (Hayton, 2005) and the need to monitor
relationships (Williamson, 1975). Moreover, an entrepreneur with a positive reputation can attract
employees from rival firms, facilitating the transfer of knowledge (Almeida and Kogut, 1999) and
enhancing innovation capability, stimulate changes, as well as improve business performance (Droege
and Hoobler, 2003).
Previous studies have shown that women entrepreneurs face many challenges in proving their
credibility when acquiring resources such as funding and supplies (e.g., Hisrich and Brush, 1983). Given
the negative social beliefs about women entrepreneurs (e.g., Hadary, 2010; Hisrich and O’Brien, 1981),
we speculate that reputational capital may be especially important to women entrepreneurs because a
positive reputation may ameliorate the effects of negative social beliefs and enhance women
entrepreneurs’ ability to acquire valuable resources, and so contributes to the growth of their businesses.
Human Capital
A third form of intangible resources is human capital. Human capital is defined as the stock of
knowledge and skills that reside within individuals (Becker, 1964). Prior studies support the positive
relationship that exists between human capital and small business success (e.g., Colombo and Grilli,
2010; Rauch et al., 2005).
Human capital is important for entrepreneurial discovery (Davidsson and Honig, 2003).
Entrepreneurs with more human capital have a comparative advantage in helping their business solve
problems, adapt to changes, and implement new technologies (e.g., Shrader and Siegel, 2007; Siegel et
al., 1997). Further, human capital plays an important role in the successful exploitation and pursuit of
opportunities by entrepreneurs (e.g., Bates, 1990; Davidsson and Honig, 2003). Prior studies identified
education (e.g., Bantel and Jackson, 1989; Norburn and Birley, 1998) and prior experience (e.g., Fischer
and Pollock, 2004; Hambrick and Mason, 1984) as two critical components of an entrepreneur’s human
50 Journal of Business Diversity vol. 12(1) 2012
capital that affect managerial know-how and capability (Becker, 1993). Below we describe these two
critical components of human capital in more details.
Education
Education has been argued to indicate an individual’s knowledge and skills (Hambrick and Mason,
1984) and to be related to information-processing capacity (Bantel, 1993). The education level of
entrepreneurs is an important factor in predicting the financial success of a new business (Hisrich and
Brush, 1984). Educational level reflects an individual’s cognitive ability and skills (Wiersema and Bantel,
1992). Kor et al., (2007) suggest that “the versatility and subjectivity of entrepreneurial knowledge and
insight help explain the persistence of firm-level heterogeneity in entrepreneurial activities” (Kor et al.,
2007: 1193). Entrepreneurs’ personal knowledge and perceptions affect entrepreneurial activities, as well
as, the rate and direction of the business’ growth (Kor et al., 2007; Zahra et al., 2006). Further, a higher
level of education earned by the entrepreneur may increase stakeholders’ confidence in their capability of
managing a new business (Carter, et al., 2003) and signal potential lenders, employees, and customers
about the future productivity of the business (Backes-Gellner and Werner, 2007).
Experience
Hambrick and Mason (1984) argue that prior experience provides top managers with knowledge and
cognitive biases which then influence their strategic choices. According to Fischer and Pollock (2004), a
CEO’s experience can affect a company’s efficiency and its ability to attract customers and capital and,
thus, its survival. Prior experience and known patterns of action also influence an entrepreneur’s decision
making by providing clues about when and how to take actions (Shane, 2000).
Further, entrepreneurs with prior experience can gather information more efficiently through their
previous successes or failures, thus leading to faster decision-making (Cooper et al., 1995; Forbes, 2005).
Moreover, the prior experience of entrepreneurs can provide access to information and social support as
well as access to reputation, credibility, and qualification (Delmar and Shane, 2004). Experience seems to
be important in predicting the success of a new business (Hisrich and Brush, 1984; Lerner and Almor,
2002). For instance, Lerner and Almor (2002) argued that the previous experience of women
entrepreneurs especially industry experience is positively related to the performance of their business.
Bhagavatula, Elfring, van Tilburg, and van de Bunt (2010) found that an entrepreneur’s experience seems
to positively influence resource mobilization more than other human capital variables. Given the
challenges faced by women entrepreneurs in launching and growing their businesses, we speculate that
human capital may be especially important to women entrepreneurs because women entrepreneurs’
knowledge and skills help them formulate and implement an effective entrepreneurial strategy and so
contribute to the growth of their businesses.
Social Competence Perspective
Although intangible resources form the basis of value-creating strategies, intangible resources alone
are not sufficient to sustain a firm’s competitive advantage (Eisenhardt and Martin, 2000). Firms are
considered repositories of resources, and these resources must be transformed and utilized to maximize
returns and earn sustainable returns (Amit and Schoemaker, 1993; Teece et al., 1997). Since firms need to
effectively develop, allocate and deploy intangible resources to generate competitive advantage (e.g., Hitt
et al., 2001), entrepreneurs need to deploy their intangible resources efficiently and effectively to create
competitive advantages (Mahoney and Pandain, 1992; Oliver, 1997), especially in rapid and unpredictable
conditions (e.g., Eisenhardt and Martin, 2000; Ethiraj et al., 2005) such as those in the early years of a
business. One way to deploy resources efficiently and effectively is for entrepreneurs to develop a
distinctive competence (Mahoney and Pandain, 1992), and one such competence is social competence
(Baron and Markman, 2003).
Social competence refers to an individual’s ability to develop and exploit resources through her
interpersonal skills. Social competence includes social perception (i.e., accuracy in perceiving others),
impression management (i.e., ability to induce favorable reactions in others), social adaptability (i.e.,
Journal of Business Diversity vol. 12(1) 2012 51
ability to adapt to a wide range of social situations), and expressiveness (i.e., ability to express emotions
and feelings in an appropriate manner), all of which are highly desired in business interactions (Baron and
Markman, 2003). Social competence is important to entrepreneurs because of the social interaction in
business (Walter et al., 2006), and it plays an important role in identifying and exploiting opportunities in
entrepreneurship (Baron and Markman, 2003). In addition, social competence affects the outcomes of
interpersonal exchanges involved in entrepreneurship (Walter et al., 2006). As such, we suspect that when
a woman entrepreneur can effectively interact with the stakeholders of her business, she can better
maintain and effectively utilize relationships to enhance the growth of her business, such as gaining
access to capital and markets, obtaining training and technical assistance, and networking.
Overall, previous research has shown the importance of social capital, reputational capital, human
capital, and social competence to entrepreneurs and has provided a general direction for the present
investigation. However, we know little about the relationships among these intangible resources, social
competence and the growth of the woman-owned entrepreneurial firm. To examine these issues, we
conducted a case study involving in-depth interviews with eleven women entrepreneurs in the mid-
Atlantic region as described below.
METHODS
Research Design
Eishenhardt (1989) suggests that a case study approach is appropriate when a phenomenon is not well
understood. Such an approach allows researchers to provide explanations of mechanisms or the rationale
underpinning observed relationships (Eisenhardt, 1989; Yin, 1984). We conducted in-depth interviews of
women entrepreneurs to gather data which we used to construct cases and theorize the relationships
among the intangible resources, social competence, and the growth of women-owned businesses.
We interviewed eleven women entrepreneurs operating in the Mid-Atlantic region of the United
States. This region provides an excellent research context because of the high number of women
entrepreneurs in the area (WIN, 2009). The businesses owned by the women entrepreneurs in our study
operated in different industries including finance, entertainment, food service, real estate, interior design,
education, apparel, and biotechnology. While most of the organizations we studied were for profit entities,
a few were nonprofit organizations, thus providing some heterogeneity in the cases selected. There was
also variation in both the age and the size of the businesses. It is not uncommon to include a diverse set of
subjects in case studies (e.g., Gilbert, 2005; Graebner and Eisenhardt, 2004). Indeed, the diverse sample
of entrepreneurs was selected to assist our exploration of how women entrepreneurs acquire, develop, and
utilize various resources and competence in achieving new venture growth.
Data Collection
The primary source of the data was in-depth personal interviews with the women entrepreneurs. We
also collected archival data from secondary sources such as company websites, brochures, published
biographies, newspaper articles, and press releases to gain a better understanding of the backgrounds of
the women entrepreneurs and their businesses. Collecting data from multiple sources provides data
triangulation and is essential to ensure the validity of the results (Yin, 1984). All of the women
entrepreneurs we interviewed earned a bachelor’s degree, and many earned a master’s and/or a doctorate
degree. The age of the women ranged from 22 to 58 years old. Demographic information of the women
entrepreneurs and basic profiles of their organizations is reported in Appendix 1.
The authors of the study conducted eleven interviews between 2007 and 2008 over 15 months. All of
the interviews lasted between 30 minutes (multiple interviews) and 2 hours (single interview), with an
average of 90 minutes with each interviewee. At the beginning of the interview, interviewees were
assured of confidentiality. All the interviews were semi-structured. The semi-structured interview style
allows interviewees to both reflect on their experiences and to use their knowledge and expertise in
generating a finer grained and more focused understanding. Using the current literature on
entrepreneurship, women entrepreneurs, and women-owned businesses as a starting point, we developed
52 Journal of Business Diversity vol. 12(1) 2012
open-ended interview questions, including questions related to the interviewees’ demographic
information and general information about their business. (Interview questions are available
upon request.) We then provided interviewees with brief definitions of the key constructs, such as social
capital, reputational capital, human capital, social competence and success. Following the definitions, we
asked interviewees to discuss factors that led to the growth of their business, as well as factors that
hampered growth. Furthermore, we asked each interviewee to discuss the usefulness to her and her
business of the intangible resources we examined, i.e., social capital, reputational capital, and human
capital.
In examining the effects of intangible resources and social competence on the growth of women-
owned businesses, we selected a rather broad term: the success of the women-owned businesses. Because
obtaining objective performance data from small and medium enterprises (SMEs) is often fraught with
difficulties largely due to reluctance to provide financial data, we used a subjective measure of
performance as has been done in previous business research (Brouthers, 2002; Brouthers and Nakos,
2004); specifically entrepreneurs’ reported their perception of the growth of their business relative to their
competitors in terms of sales growth, profit growth, funding future growth, marketing, distribution and/or
cash flow. Subjective performance measures have been found to be highly correlated with objective
measures of performance (Dess and Robinson 1984). Accordingly, the use of subjective measures may
provide valuable insight on performance when objective financial measures are not provided.
We concluded by asking the women entrepreneurs for additional comments they wanted to add to
their responses to our list of questions. Following each interview, the interviewer transcribed the
entrepreneurs’ responses to the questions. When clarification was needed, we contacted the entrepreneur
by phone or by email to obtain the necessary information to resolve the lack of clarity.
Data Analyses
In order to ensure inter-rater reliability, two of the authors of this study analyzed and coded the
qualitative data based on the interview transcripts for each case. Data analysis in this study closely
followed two major steps typical in inductive multi-case research (e.g., Graebner, 2004; Graeabner and
Eisenhardt, 2004): building individual cases and then comparing across cases to construct a conceptual
framework. Individual case studies were built by synthesizing the qualitative data from different sources
for the eleven women entrepreneurs (Eisenhardt, 1989). These case histories were then used for within-
case and cross-case analyses.
For the within-case analysis, to ensure inter-rater reliability we first worked independently on
identifying unique barriers facing women entrepreneurs and factors crucial to their success. Second, we
independently coded qualitative data involving the intangible resources, social competence, and growth of
women-owned businesses. In the coding process, we also closely examined the data describing how the
intangible resources and social competence were developed and utilized. Third, we paid close attention to
data describing the relationships among resources and social competence, and we investigated the
qualitative data related to factors that might contribute to the growth of women-owned businesses. We
drew tables and figures to help capture these emerging relationships. After the completion of the within-
case analyses, we worked together to resolve any disagreement we had in the coding and content analysis
process. We discussed the factors we identified as critical to women entrepreneurs’ success, as well as
relationships that seemed to emerge among the intangible resources and social competence in individual
cases.
After the eleven within-case analyses were completed, we conducted cross-case analyses.
Specifically, we first investigated whether similar or different themes and patterns emerged in multiple
cases. We then considered differences in patterns in refining and modifying the conceptual model that
could explain the mechanisms underpinning the entrepreneur’s success. After the cross-case analyses
were completed, we re-examined interview transcripts to ensure that the conceptual model was consistent
with the data. In short, the within- and cross-case analyses yielded a set of themes and findings reported in
the following section.
Journal of Business Diversity vol. 12(1) 2012 53
FINDINGS
Barriers Facing Women Entrepreneurs
The cross-case analyses revealed unique challenges facing women entrepreneurs. First, the women
entrepreneurs agreed that the barriers to growth they faced were due to the social perceptions of their
gender roles. One of the major barriers they identified when they started their business relates to the lack
of social acceptance of women entrepreneurs and women-owned businesses. For example, entrepreneur
#1 said that “the general perception from society is that women cannot run their own business.” Even
among those who accept women entrepreneurs and women-owned businesses, there are many who do not
accept them across all industries. Several interviewees noted that people have fewer negative attitudes
about women entrepreneurs operating in industries in which women have traditionally worked. For
example, entrepreneur #9 mentioned, “Mrs. Fields are okay but other types of ventures led by women are
not!”
Another barrier identified by several interviewees (e.g., Entrepreneur #1, Entrepreneur #4 and
Entrepreneur #11) is low credibility. Limited training, experience, and/or education to run a business
might contribute to the low credibility of women entrepreneurs. While men entrepreneurs may face a
similar problem, interviewees mentioned that the general perception of women-led businesses coupled
with insufficient experience and/or education might diminish women entrepreneurs’ credibility. In
addition, what is expected of women entrepreneurs seem to be higher. Women entrepreneurs reported to
having to work much harder than their men counterparts to achieve the same level of credibility, and/or
that they had to earn more education than that required of men to prove that their credibility and
capability (e.g., Entrepreneur #2, Entrepreneur #4).
A third barrier that the women entrepreneurs we interviewed reported was difficulty in accessing
networks that are dominated by men. Seven of the interviewees (e.g., Entrepreneur # 1, Entrepreneur #2,
Entrepreneur #5, Entrepreneur #6, Entrepreneur #7, Entrepreneur #9, and Entrepreneur #10) referred to
the “old boys club” and the big challenge this network presents to women entrepreneurs. (The old boys
club originally referred to the social and business connections among former students of male-only private
schools.) They mentioned that this network of men often dominates the organizations that control
resources (such as funding) vital to the startup and growth of businesses. Our interviewees further
indicated that because they were women, the men in the network limited their access to resources. In
some industries, there seems to be a stronger network of powerful men than in others. For example, one
interviewee (Entrepreneur #2) who operates a financial consulting firm explained, “gender issues could be
a high barrier… entering into a finance network is difficult for women.” Similarly, another interviewee
(Entrepreneur #10) described, “there is a boys’ network in my industry.” In addition, there appears to be
some differences in how men and women form networks which may create barriers for women
entrepreneurs or hinder them. One interviewee noted (Entrepreneur #10), “They go drinking and are
uncomfortable inviting me to go with them.” Entrepreneur #1 also commented that “to network women
can go out with men for a beer and watch a football game, but doing that could put their personal
reputation at risk. Tricky to balance!”
Despite the barriers women entrepreneurs face, we found that women entrepreneurs can overcome the
barriers by cultivating and using social-, reputational-, and human capital as well as social competence to
grow their business. In the following sections, we report our findings on how the three forms of capital
and social competence affect the growth of women-owned businesses.
Human Capital and the Growth of Women-Owned Businesses
The women entrepreneurs we interviewed described human capital as the cornerstone of their
success. All of the women interviewed earned a bachelor’s degree. Five earned a master’s degree, and two
earned a doctorate degree. They also had a wealth of work experience. Many of our interviewees worked
in large established companies prior to launching their own businesses. They reported that their human
capital, especially experience and education, was important to their success. Their human capital helped
them pursue and exploit opportunities which led to the startup and growth of their businesses. For
54 Journal of Business Diversity vol. 12(1) 2012
example, one interviewee (Entrepreneur #6) noted that her previous work experience helped her develop a
novel methodology to launch new products. Another interviewee (Entrepreneur #4) indicated that her
Executive MBA provided her with financial and management skills that were critical for sustaining her
company’s expansion and healthy financial growth. In sum, our interviews indicate that human capital is
important for women entrepreneurs, hence supporting prior research on human capital and the success of
new businesses (e.g., Dyke et al., 1992; Gimmon and Levie, 2009; Manolova et al., 2007; Rauch et al.,
2005). As such, we expect that,
Proposition 1: A woman entrepreneur’s human capital is directly and positively related to
the growth of her business.
More interestingly, our findings suggest that human capital helped women entrepreneurs develop a
positive reputational capital. For women entrepreneurs, human capital not only reflects their knowledge,
skills, and information-processing capabilities, but it also provides credibility that signals to potential
investors, employees, and customers about the future prospects of the women entrepreneurs and their
business. Several interviewees commented on the importance of human capital:
“Unlike men entrepreneurs, women entrepreneurs have to demonstrate their education
and functional experience to establish their credibility and to sustain their businesses.
Human capital is the fundamental key to women’s entrepreneurial success.”
(Entrepreneur #1)
“In order to prove my credibility, reliability and professionalism, I have to highlight my
education and business experiences to investors, suppliers and clients, including an
EMBA degree, over 20 years experience in a related area, and I am also a proud winner
of an Entrepreneurial Business Plan Competition. I don’t think this is necessary for a man
entrepreneur.” (Entrepreneur #3)
Having the specific knowledge and skills for the entrepreneur’s specific type of business is vital to
success. Education is an indication of an individual’s knowledge, skills, and capability to generate and
implement creative solutions to solve complex problems (Bantel and Jackson, 1989). For example, our
interviewees revealed the following:
“Although I have had more than 20 years of industry experience in financial consulting
services, the business model I launched (an education program) has not been successful
simply due to the fact that I cannot prove myself to be competent without a degree in
education.” (Entrepreneur #2)
“Human capital is essential to women’s entrepreneurial success. It does not require
intangible assets for men to start up a new business. However, it requires a woman
entrepreneur to have the education and experiences to prove her credibility and
professionalism to the stakeholders, such as government officials, suppliers, investors,
bankers, and the larger community”. (Entrepreneur #2)
Thus, in light of the interviews, it appears that women entrepreneurs’ human capital, especially their
formal education and prior experience can significantly provide credibility and help obtain reputational
capital. As such, we expect that,
Proposition 2: A woman entrepreneur’s human capital is directly and positively related to
her reputational capital.
Our results reveal that women entrepreneurs’ human capital also contributes to the acquisition of
social capital. In our study, we found that human capital helped our interviewees establish networks of
Journal of Business Diversity vol. 12(1) 2012 55
relationships that are important to their success. For example, several of our interviewees explained that
participating in academic programs such as an Executive MBA program or professional training in
addition to their prior business experience provided them with opportunities to cultivate new social
relationships which benefited their business growth. One interviewee described the importance of her
education in developing social capital as follows:
“My former entrepreneurial training bridges the gap between academics and the business
community. My educational experience has helped me develop effective social networks.
I have met some influential executives at the school [business plan] competition and
some of them have joined my company as board members.” (Entrepreneur #3)
Human capital is especially beneficial when there is incomplete information about women
entrepreneurs’ reliability and professionalism in managing a business. Human capital (e.g., education)
increases confidence in an entrepreneur’s capability of managing a company (Carter et al., 2003). Further,
women entrepreneurs’ human capital (e.g., prior experience) can assist them in developing relationships
with shareholders (Shane and Stuart, 2002). For instance, our interviewees made the following comments:
“My experience and education helped me connect with business people. Judging from my
human capital, the business people are willing to help with my business.” (Entrepreneur
#2)
“It is my human capital that facilitates the acquisition of other valuable resources such as
social capital and reputational capital that enhance entrepreneurial success.”
(Entrepreneur #1)
As such, we expect that,
Proposition 3: A woman entrepreneur’s human capital is directly and positively related to
her social capital.
Social Capital and the Growth of Women-Owned Businesses
While the women entrepreneurs we interviewed emphasized the importance of human capital in
entrepreneurship, none suggested that human capital alone made them successful. They indicated that
social capital is of paramount importance. Interestingly, our interviewees indicated that social capital is
important for both women and men entrepreneurs, but they highlighted some differences. They noted that
women entrepreneurs often develop their networks more slowly and more deliberately than men
entrepreneurs do. They also indicated that women entrepreneurs’ personal and business networks often
overlap. The women we interviewed noted that women entrepreneurs often transform their personal
network ties into business network ties and vice versa, while men entrepreneurs tend to separate their
personal and business networks. Several women entrepreneurs explained as follows:
“My personal networks have been helpful in achieving entrepreneurial success. For
instance, my personal mentor and advisory board members have supported the growth of
my company. My friend and mentor was a former president of a local performing arts
center, who later sat on my advisory board.” (Entrepreneur #3)
“Women entrepreneurs approach networks differently. Men are ‘friends’ with other men
after going out for a beer. This is not so easy with women. For women, ‘friends’ are more
substantive.” (Entrepreneur #1)
Further, men entrepreneurs develop and maintain their social relations when they engage in sports and
recreational activities such as watching a football game, playing golf, or going out for a beer. Women
entrepreneurs develop their networks by helping other people or asking them for assistance. For example,
56 Journal of Business Diversity vol. 12(1) 2012
one woman mentioned that “women inherently want to help each other. Women are drawn to inquire and
remember what is important to others. This leads to friendships in business relations” (Entrepreneur #11).
Furthermore, six interviewees (e.g., Entrepreneur #3, Entrepreneur #5, Entrepreneur #6, Entrepreneur #8,
Entrepreneur #10, and Entrepreneur #11) noted that women are generally good at asking for help from
people they know, and this can lead to building a network and more generally acquiring social capital.
The women entrepreneurs we interviewed built their networks over time and took great effort to build
their networks including a lot of one-on-one interaction. For example, several women entrepreneurs
commented as follows:
“I have strong social capital and have developed a network of more than 100 clients
through one-on-one relationship building that I believe have fueled the success of my
business.” (Entrepreneur #6)
“When compared to men entrepreneurs, women entrepreneurs need to be more strategic
in networking, especially one-on-one relationship development.” (Entrepreneur #8)
All of the women entrepreneurs we interviewed indicated that they were satisfied with their social
capital and believed that it contributed to the startup and growth of their business and their personal
success. Specifically, the women entrepreneurs noted that their networks played an important role in
accessing important information and advice, as well as critical knowledge regarding their day-to-day
operations, business growth, and expansion. Our findings are consistent with prior research (e.g., Cable
and Shane, 1997; Carter et al., 2003) on the benefits of possessing social capital for women entrepreneurs
in that social capital enables them to access valuable resources and ensures their market growth and
expansion. For instance, our interviewees commented on how social capital helped them identify and
develop opportunities and add value to grow their business as follows:
“My professional networks have always been helpful when I encounter problems.”
(Entrepreneur #3)
“I have to credit the fast growth of my business to my social capital. My personal
networks and relationships are helpful in achieving entrepreneurial success. I am also
actively involved in several business networking groups. I believe that social capital is
especially important for a women entrepreneur given all the challenges we have.”
(Entrepreneur #5)
“Social capital is very important. People do business with people they like. My social
capital helped me secure licenses, manufacturing, and distribution.” (Entrepreneur #4)
“I have a huge network in different sectors including one in the sports sector that benefits
my business. My network contacts helped me with my business. I am an industry
insider.” (Entrepreneur #8)
As such, we propose that,
Proposition 4: A woman entrepreneur’s social capital is directly and positively related to
the growth of her business.
Furthermore, there appears to be a relationship between social capital and reputational capital. Several
interviewees suggested that networks assist in the development of reputational capital. They indicated that
establishing strategic alliances with influential organizations is a good way to develop their reputational
capital. For example, our interviewees noted,
“Reputational capital is key to success. It sustains the company’s growth. I have
developed and maintained my reputational capital through establishing strategic alliances
with big corporations.” (Entrepreneur # 1)
Journal of Business Diversity vol. 12(1) 2012 57
“Working with an established firm helps increase my reputational capital.” (Entrepreneur
# 6)
In light of the relationship that seems to exist between social capital and reputational capital, we
propose the following:
Proposition 5: A woman entrepreneur’s social capital is directly and positively related to
her reputational capital.
Reputational Capital and the Growth of Women-Owned Businesses
Among the women we interviewed, most considered reputational capital to be quite important in the
startup and growth of their business, and that a lack of reputational capital creates a significant obstacle to
growing a business. Reputational capital is an intangible resource (Fombrun, 1996) that helps reduce
transaction costs and the need to monitor business relationships (Williamson, 1975). Reputational capital
seems to aid women-owned businesses’ ability and flexibility to attract resources. For instance, one
women entrepreneur comments:
“I am very satisfied with my reputational capital and attribute that to my business
success. I have to continually build my reputational capital to reduce transaction issues
involved in businesses operations and to attract more customers and investors to sustain
the growth of the business.” (Entrepreneur #10)
Furthermore, we found that reputational capital needs to be developed rather quickly. Our
interviewees noted that unlike men entrepreneurs, women entrepreneurs often have to establish a good
reputation in a relatively short period of time to increase the potential for success. For instance, one
interviewee reported the following:
“Unlike men entrepreneurs, women have to develop their reputational capital in a
relatively short period of time to signal to the stakeholders their competence and
professionalism.” (Entrepreneur #2)
“Unlike men entrepreneurs, women do not have the flexibility or cushion to make up lost
chances. In general, women have less time to build their reputation and respect from the
community.” (Entrepreneur #3)
We so found that reputational capital builds credibility. Credibility has been argued to be important in
starting and growing a business (Shapero, 1982). Reputational capital is very valuable to women
entrepreneurs, especially when they are challenged by lack of credibility, access to markets and networks,
and business growth and expansion (Zimmerman Treichel and Scott, 2006). For instance, our
interviewees noted the following:
“Reputational capital is extremely important which has more ‘teeth’ for women
entrepreneurs and makes them more believable and works more effectively for their
businesses”. (Entrepreneur # 6)
“My reputational capital has a strong influence upon stakeholder beliefs, attitudes and
behaviors when there is incomplete information concerning the operation of the non-
profit organization”. (Entrepreneur #3)
“I have a good reputation for being persistent, tenacious, and aggressive. Reputational
capital is essential to my entrepreneurial success.” (Entrepreneur #10)
Our results suggest that a woman entrepreneur’s reputational capital can ameliorate the negative
effects associated with traditional social perceptions of women-owned businesses, as well as positively
58 Journal of Business Diversity vol. 12(1) 2012
shape stakeholders’ beliefs, perceptions and attitudes towards women entrepreneurs’ legitimacy,
credibility, reliability, and professionalism, thereby contributing to a woman entrepreneur’s business
growth. As such, we propose the following:
Proposition 6: A woman entrepreneur’s reputational capital is directly and positively
related to the growth of her business.
Social Competence and the Growth of Women-Owned Businesses
In addition to the importance of human-, social-, and reputational capital, the women entrepreneurs
we interviewed indicated that social competence played an important role in their success. Social
competence, such as the ability to motivate people, concisely convey ideas, impress people, and adapt to
internal and external changes, appears to be critical to the successful startup and growth of a women-
owned businesses. For example, the women entrepreneurs commented as follows:
“Social competence is important for entrepreneurial growth.... It is essential to have the
social expressiveness to make a presentation in public. It requires social skills to convince
others, such as investors and clients, that the services are unique and valuable. It is
important to have all social skills to convince investors about the business model.”
(Entrepreneur #2)
“Social competence is important because it is essential for a non-profit organization to be
understood by stakeholders, which requires articulateness and expressiveness.”
(Entrepreneur #3)
Interestingly, we found that women entrepreneurs who did not achieve their desired growth also
reported they lacked adequate social competence. One interviewee reflected the following on social
competence:
“Although I possess strong social capital and human capital, they are not so valuable
without the presence of social competence. I need to enhance my social interactive skills
to grow my business” (Entrepreneur #8)
Even though the women we interviewed reported that the intangible resources of human-, social-, and
reputational capital are each related to the success of women entrepreneurs and specifically the growth of
their businesses, most of the women indicated that social competence plays an important role in achieving
success. For example,
“People want to work with those who are known as hardworking, passionate and honest.
We need to have social skills to inform people about what we can do and what our
expertise is.” (Entrepreneur #4)
“Social competence is extremely important because it opens doors. People want to help
me because of my social competence. Social competence helps me get important things
done, such as getting a license.” (Entrepreneur #8)
“It is especially important to be able to adapt to challenging situations, such as to diffuse
clients’ angers and to convince clients in accepting an important offer. A woman
entrepreneur’s ability to convince others is essential to achieving her business success.”
(Entrepreneur #1)
“Social competence is essential for a non-profit organization to be understood by
stakeholders, which requires articulateness, expressiveness. Women entrepreneurs do not
have the flexibility or cushion to make up lost chances. Women also have less time to
build their reputation and respect from the community. As such, social competence
becomes an important aspect to grow and sustain my business.” (Entrepreneur # 3)
Journal of Business Diversity vol. 12(1) 2012 59
Based on these findings, we propose the following:
Proposition 7: A woman entrepreneur’s social competence is directly and positively
related to the growth of her business.
The women entrepreneurs in our study seemed to indicate that women entrepreneurs need both capital
and social competence. They need social competence to better utilize their social-, human-, and
reputational capital. According to Baron and Markman (2003), the human capital of an entrepreneur
cannot be a source of competitive advantage without the social competence and skills to explore and
exploit productive opportunities, to cope with the requirements of a start-up, and to manage different
stages of entrepreneurship. In particular, social competence is most useful for entrepreneurs in situations
where they cannot simply rely on past social relations or on clearly defined norms and roles (Baron and
Markman, 2003).
From our interviews, it appears that although social-, human, and reputational capital are important
for women entrepreneurs, it is especially important for women entrepreneurs to know how to leverage
such capital to communicate their credibility to new suppliers, investors, and others. The women we
interviewed noted that social competence can enhance the relationship between an entrepreneur’s capital
and her success. For example,
“A woman entrepreneur’s social expressiveness, social perception, impression
management and adaptability are critical and key to my success. It is important to possess
human capital and social capital, but I have to have the capability to make impressions on
contractors and clients, otherwise business will not grow. If I don’t have the social
expressiveness to make a presentation in public or to be persuasive to my investors and
clients, I don’t think I can convince those investors about my business just with my
impressive resume.” (Entrepreneur #2)
“Other resources such as social capital, reputational capital and human capital are not
valuable without the presence of social competence.” (Entrepreneur #11)
“It requires social skills to convince others, such as investors and clients, that our services
are unique and valuable. Based on my social competence, I was able to convince
investors about my business model. I am satisfied with my social competence and believe
that my social competence enhances my other resources.” (Entrepreneur #4)
“Although it is critical to possess social capital, reputational capital and human capital, it
is especially important to know how to use these resources in a way to be able to adapt to
challenging situations, such as to diffuse clients’ angers and to convince clients in
accepting my ideas. The ability to convince others is essential in my business.”
(Entrepreneur #1)
It appears that without social competence, a woman entrepreneur may struggle to effectively use her
intangible resources to startup and grow her business. The qualitative data suggest that a woman
entrepreneur’s social competence is essential to adapting, integrating, and exploiting her social-, human-,
and reputational capital. Informed by this finding, we propose that a woman entrepreneur’s social
competence will interact with these three forms of capital in influencing the growth of her business. As
such, we expect that,
Proposition 8: A women entrepreneur’s social competence can enhance the relationships
between intangible resources such as human-, social-, and reputational capital and her
business growth.
In light of the above findings on the three forms of capital and social competence, we constructed
Figure 1(See Appendix 2) to present the relationships we identified from the findings of our case
60 Journal of Business Diversity vol. 12(1) 2012
analyses, i.e.,, relationships among intangible resources, social competence, and the growth of the
women-owned businesses. Our findings revealed that intangible resources were developed or acquired in
a sequence over time. Specifically, human capital and social capital were acquired or developed first, and
then formed the basis for obtaining reputational capital. Further, our findings suggest that while a woman
entrepreneur’s capital is related to the growth of her business, social competence gives women
entrepreneurs leverage in better utilizing intangible resources in starting and growing their businesses.
DISCUSSION
Entrepreneurship scholars have investigated aspects of how entrepreneurs identify and evaluate
opportunities as well as how to obtain and exploit resources such as intangible resources. While intangible
resources have been shown to strongly relate to firms’ competitive advantage (Barney, 1991; Rumelt,
1984; Wernerfelt, 1984), they have been understudied in entrepreneurship research. To narrow this gap, in
this paper, we examined three types of intangible resources of women entrepreneurs: social-, human-, and
reputational capital. We investigated how these three forms of intangible resources contribute to the
growth of their business. Specifically, our findings support the importance of women entrepreneurs’ social
capital in the form of networks, human capital in the form of education and functional experience, and
reputational capital in the form of credibility. Our finding also suggest that a woman entrepreneur’s
intangible resources constitute a wide array of potentialities including a hierarchical order in which
human capital develops first and influences the attainment of social and reputational capital. In addition,
we also examined the role of women entrepreneurs’ social competence in enhancing the utility of the
intangible resources, hence influencing the growth of the women-owned businesses. We found that social
competence plays a key role in leveraging the effects of all three types of intangible resources. A woman
entrepreneur’s social competence appears to be essential to adapting, integrating, and exploiting
intangible resources to the success of her business.
To our knowledge, this is the first study to examine the influence of the entrepreneur’s intangible
resources as well as social competence in relation to the growth of her business. It enriches current
literature on entrepreneurship in the following aspects. First, this study focuses on women entrepreneurs.
Women entrepreneurs and the businesses they own are growing dramatically, and women entrepreneurs
are recognized as a driving force in the U.S. economy in terms of the number of businesses owned, the
revenues generated, and/or the number of people employed (Greene et al., 2003). This study enriches our
understanding of women entrepreneurs by focusing on the unique challenges they face and how they can
address these challenges through effective utilization of their intangible resources and social competence.
A qualitative approach allows us to take an initial step in studying the importance of resources and social
competence to the success of women entrepreneurs. Our findings indicate that women entrepreneurs face
unique challenges which require theory and practice different from mainstream entrepreneurship theory
and practice. Future research empirically examining these characteristics would be beneficial.
Second, instead of viewing an entrepreneur’s intangible resources and competence separately on a
piecemeal basis, this study examines how entrepreneurs’ intangible resources and their social competence
influence the growth of their entrepreneurial firms. This integrative approach fills the gaps in
entrepreneurship literature by incorporating both the resource-based view of the firm (Barney, 1991;
Eisenhardt and Martin 2000) and the social competence perspective (Baron and Markman, 2003) to
advance our understanding of various factors that may lead to the growth of women-owned businesses.
Third, given the unique challenges women entrepreneurs face, it is important to examine how a
collection of resources (social-, reputational-, and human capital) relate to the growth of the
entrepreneurial firm. Our analysis suggests that collectively, a woman entrepreneur’s intangible resources
constitute a wide array of potentialities. Our case analyses also revealed a hierarchical order in which
human capital was first developed which influenced the attainment of social- and reputational capital.
Finally, our findings suggest that intangible resources alone cannot lead to entrepreneurial success.
Social competence enhances the utility of resources and enables a woman entrepreneur to more
effectively transform her intangible resources into valuable outputs.
Journal of Business Diversity vol. 12(1) 2012 61
Although this study is exploratory and the findings should be validated by future empirical research,
this study offers potential implications for women entrepreneurs. It demonstrates the importance of
intangible resources of women entrepreneurs in growing their business. It also provides support for the
importance of social competence and the role that social competence plays in enabling women
entrepreneurs to use their intangible resources to generate success and grow their business. While women
entrepreneurs may have the networks, reputation, education, and experience necessary to make their
business survive in the short term; in the long run, they need social competence to realize the fullest
potential of these valuable resources in order to succeed. Because women in general are naturally good at
being attentive to others’ needs and maintaining social relationships, social competence may provide
women entrepreneurs with needed capabilities to sustain their initial success and continuously grow their
business.
There are several shortcomings in this paper. First, as we stated earlier, this is a first step in examining
the relationship among intangible resources, social competence, and the growth of the women-owned
businesses. Future empirical studies based on large samples are needed to further test the relationships
proposed in this study. Second, since our results are drawn from interviews with women entrepreneurs in
the mid-Atlantic region, future research with an expanded sample of women entrepreneurs from different
geographic regions and countries would enhance the generalizability of the findings, and would permit a
better understanding of women entrepreneurs and the performance correlates of women entrepreneurial
success. Finally, a more comprehensive measure of new venture growth is needed. In addition to
conceptualize growth by sales growth, profit growth, asset growth, and other forms of growth, it is
meaningful to include internal development, such as the development of products, resource base, and
organizational efficiency, that are relevant and meaningful to practitioners (Achtenhagen et al., 2010).
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APPENDIX 1
PROFILES OF INTERVIEWEES
Interviewees Company Year of
establishment
Industry
Entrepreneur #1 Design Company 1998 Home refurbishing and landscape
design
Entrepreneur #2 Financial Consulting
Company
2002 Financial consulting to
companies that are in transition
Entrepreneur #3 Dance Company 2005 Non-profit organization in the
performing arts which also
teaches dance
Entrepreneur #4 Personal Chef Service 2005 Preparation of meals for
individuals and families
Entrepreneur #5 Nongovernmental
Organization
2006 Non-profit organization
providing solar panels to
hospitals in Africa
Entrepreneur #6 Marketing Company 1991 Branding services for high
technology and science
companies
Entrepreneur #7 Medical Device Company 2002 Medical device company
addressing spikes in body
temperature
Entrepreneur #8 Women’s Apparel 2005 Women’s clothing manufacturer
branded with professional sports
logos
Entrepreneur #9 Professional Development
Consulting
2002 Career consulting for college
athletes
Entrepreneur #10 Fitness Center 2007 Family oriented fitness center
Entrepreneur #11 Disability Consulting
Company
1991 Consulting services to assist
people with disabilities on
employment related issues
70 Journal of Business Diversity vol. 12(1) 2012
APPENDIX 2
FIGURE 1
A CONCEPTUAL MODEL OF WOMEN ENTREPRENEURS’ INTANGIBLE RESOURCES,
SOCIAL COMPETENCE, AND FIRM GROWTH
Women entrepreneur’s social
capital (personal and
professional networks)
Women entrepreneur’s
reputational capital
(credibility)
Growth of women-owned
businesses (Sales level, sales
growth, profits, future growth,
marketing, distribution, cash flow)
Social competence
(Social perception, impression
management, social adaptability,
expressiveness)
Women entrepreneur’s
human capital (education and
experience)
P1
P2
P3
P4
P6
P5
P8
P8
P8
P7
Journal of Business Diversity vol. 12(1) 2012 71
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