Women entrepreneurship in Africa: strength of weak ties (SWT) in mitigating principal-agent problems

Research output: Contribution to conferencePaper

Abstract

Purpose
The purpose of this paper is to develop an innovative conceptual framework on the Strength of Weak Ties (SWT) social network with the aim of developing a taxonomy for mitigating Principal-Agent conflicts among African women entrepreneurs.

Design/Methodology/Approach
Following the work of Granovetter (1973), the paper discusses the role of “weak ties” networks in entrepreneurial activities and the applicability of the concept for African women entrepreneurs. The authors then outline the key parameters of the Principal-Agent paradigm. The aim is to develop a taxonomy which can be useful for examining the obstacles faced by women entrepreneurs, especially in Africa. In order to develop the taxonomy the authors identify six Principal-Agent parameters namely: attitudes towards risk; behaviour-based versus output-based contracts; asymmetric information (potential for goals conflict); risk sharing; transaction costs; and verification and monitoring costs.

Findings
With the aid of this taxonomy we then analyse the channels through which the strength of “weak ties” networks operate in mitigating the problems which can arise from the Principal-Agent paradigm. Key implications for women entrepreneurs in Africa are highlighted.

Research Implications
The current conceptual study implies that social network theory from the entrepreneurship perspective can be utilised in mitigating the Principal-Agent problem which has an economics lineage. Further empirical studies will be conducted in selected African countries among women entrepreneurs to test the voracity of our taxonomy.

Practical Implications
As well as developing a potential new paradigm based on our taxonomy, this study will highlight the most serious constraints that hinder women entrepreneurs, especially in the African context.

Originality/Value
The value of this study lies in the innovative taxonomy developed for mitigating the Principal-Agent problem and its attempt to combine the SWT social network with that problem.
Original languageEnglish
Pages16-16
Number of pages1
Publication statusPublished - 6 Apr 2017
Event2nd Annual Research Conference of the Centre for African Research on Enterprise and Economic Development (CAREED) - University of the West of Scotland, Paisley, United Kingdom
Duration: 6 Apr 20177 Apr 2017

Conference

Conference2nd Annual Research Conference of the Centre for African Research on Enterprise and Economic Development (CAREED)
Abbreviated titleCAREED 2017
CountryUnited Kingdom
CityPaisley
Period6/04/177/04/17

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Keywords

  • Women entrepreneurship
  • Social networks
  • Principal-agent paradigm
  • Taxonomy
  • Strength of weak ties
  • Africa

Cite this

Nziku, D., & Struthers, J. (2017). Women entrepreneurship in Africa: strength of weak ties (SWT) in mitigating principal-agent problems. 16-16. Paper presented at 2nd Annual Research Conference of the Centre for African Research on Enterprise and Economic Development (CAREED), Paisley, United Kingdom.