A Research On The Machanism Of How Network Orientation Affects New Venture Performance

Under the trend of mass entrepreneurship and innovation stimulating the economic growth, there have been an increasing number of new ventures in China. This raises both the practical and the academic discussion on how to maintain the profitability and growth of new ventures. For the entire industrial ecosystem, innovative and cooperative activities of new ventures are of great importance. Through establishing and maintaining social network, new ventures could integrate information and other resource effectively in order to improve the performance and expand the competitive advantage. The concept of network orientation indicates the tendency or attitude towards using the network to solve entrepreneurial problems in practice, which is originally discovered in Psychology and Sociology and now is being introduced into Enterprise Strategy Management research area. Based on the network resource prospective and the social network theory, it has been supported by numbers of empirical research that the network orientation has a positive effect on the enterprise performance and the competitive advantage,however, research on its mediation and environment is still insufficient.Meanwhile, as the information technology is developing fast, the market competition has been fiercer and the customer requirement has been changing. It is known that value co-creation with customer is crucial.Value co-creation is a key point of service-dominant logic (SDL), but the relative research in entrepreneurship is not enough. New ventures can benefit from value co-creation with network members so as to improve their profitability and growth, since they have some disadvantages themselves naturally. Therefore, this thesis focuses on what role the value co-creation plays in the relationship between network orientation and new venture performance. Besides, institutional structure and industrial policy have a far-reaching influence on China's new ventures. Institutions are the restriction and coordination for value co-creation activities, which should be discussed more in academic research, providing an insight for this thesis.In sum, this thesis builds a scientific model of the relationship between network orientation and new venture performance and presents the related hypothesis, and then proves them by empirical research using SPSS and AMOS, taking high-tech new ventures as objects. The conclusion is listed below:To begin with, both network orientation and value co-creation have a positive effect on new venture performance directly. Based on literature review and in-depth interview, the dimensions and measurement questions are abstracted from the coding result. After analyzing the formal survey data, it is proved that all the three dimensions of network orientation, which are network collaboration, network focus and network openness, as well as the two dimensions of value co-creation, which are interaction and information sharing, have positive effects on new venture performance.Moreover, value co-creation plays the mediation role in the relationship between network orientation and new venture performance.Proved by the empirical research, both the two dimensions of value co-creation, which are interaction and information sharing, play the partial mediation role in the relationship between the three dimensions of network orientation and new venture performance separately. So, it has been proven that the ' Strategy-Activity-Performance' theoretical framework of new ventures research, i.e. 'network orientation-value co-creation-new venture performance' is scientific and effective, which can guide new ventures in practice to improve profitability and growth.Last but not least, formal institutions environment and informal institutions environment play the modulation role in the relationship between network orientation and value co-creation. Formal institutions environment plays the modulation role in the relationship between network collaboration and value co-creation, and the relationship between network focus and value co-creation, too. Informal institutions environment only plays the modulation role in the relationship between network focus and value co-creation.There are mainly three innovative points of this thesis:First, it provides a 'Strategy-Activity-Performance' theoretical framework for new ventures research, i.e. 'network orientation-value co-creation-new venture performance' and builds a scientific model of the relationship between network orientation and new venture performance.On a solid foundation of literature review of network orientation,social network,service dominant logic, value co-creation, institutions and other key concepts, this thesis analyzes the drawback in Chinese and foreign research and the realistic circumstances of Chinese new ventures.In conclusion, the network is chosen to be the strategic orientation, value co-creation is the practical activities and new venture performance is the evaluation result, additionally, institutions environment is the modulation.Therefore, it brings out the scientific model of the relationship between network orientation and new venture performance, which can enrich the network orientation related research, clarify the inner effect between network orientation, value co-creation and new venture performance, and provide theoretical support for Chinese new venture in marketing and management in reality.Second, it explicates that both network orientation and value co-creation have a positive effect on new venture performance directly,while value co-creation plays the mediation role in between.Because the network orientation related research progresses slowly and lack of empirical study, this thesis code the foreign literature and domestic new venture's in-depth interview data,so as to conclude the network orientation's dimension and measurement questions, which later are proven in empirical research. Network orientation has three dimensions as network collaboration, network focus and network openness. After that, it is also proven that both network orientation and value co-creation have a positive effect on new venture performance.What is more,value co-creation's two dimension,interaction and information sharing, plays the mediation role in the relationship between network orientation and new venture performance.Third, it reveals that the formal institutions environment and informal institutions environment play the modulation role in the relationship between network orientation and value co-creation.Formal institutions environment plays the modulation role in the relationship between network collaboration and value co-creation, and the relationship between network focus and value co-creation, too. However,formal institutions environment does not modulate the relationship between network openness and value co-creation. Similarly, informal institutions environment only plays the modulation role in the relationship between network focus and value co-creation, but does not modulate the relationship between network collaboration and value co-creation, nor the relationship between network openness and value co-creation. These findings introduce institutions research into management science and improve the service dominant logic content,providing a new insight. Since institutions have a far-reaching influence on Chinese new ventures, this conclusion has realistic meanings.