The Role of social relationships in the setting up and management of small tourism businesses in two Portuguese rural areas.

Abstract

The successful setting up and management of micro and small businesses, and tourism related businesses in particular, is dependent on a range of situational and contextual factors (Gartner 1988, 1989; Reynolds 1991; Watson et al. 1998; Jack and Anderson 2002). When very small and micro businesses are considered, the owner’s social and economic contexts are strongly inter-related, and to interpret economic action, one needs to take into account the social context where it takes place (Granovetter 1985; Aldrich and Zimmer 1986; Curran et al. 1993; Greenbank 2001; Jack and Anderson 2002). In remote rural areas, particularly in peripheral locations, tourism businesses have been widely promoted and relied upon as a means of addressing the social and economic challenges they are going through (Sharpley 2002; Shaw and Williams 2002; Getz et al. 2004). But tourism businesses have to face the typical weakness of small firms, combined with the constraining characteristics of peripheral destinations (Dahles 1997; Morrison 1998a; Morrison and Thomas 1999; Irvine and Anderson 2004; Getz and Carlsen 2005). The supporting resources base for firm setting up is considered to be much smaller and much harder to access (Smallbone et al. 1993; Stearns et al. 1995; Patterson and Anderson 2003; Skuras et al. 2003). In such circumstances, the owners’ social personal networks play very important roles, either in the provision of immediate support, or by giving access to contacts and to resources outside the local area (Jack and Anderson 2002). But social networks can either facilitate or inhibit venture development (Casrud and Johnson 1989). Particularly with micro and/or family owned businesses, the two sub-systems are so strongly embedded, that any family issue is likely to influence the business and vice-versa, both in a positive as well as in a negative way (Stafford et al. 1999; Danes 2006). Social networks are acknowledged as important sources of strength, synergies and resources to businesses (e.g. Lynch; 2000; Habbershon et al. 2003; Buhalis and Peters 2006; Sharma 2008; Tinsley and Lynch 2008), but can also lead to dysfunctional consequences, and conflict between both systems may arise (Danes 2006; Werberl and Danes 2010). Therefore, this research aims at contributing to an under researched topic: the understanding of the role and importance of social relationships, in the small business setting up and management context. Theories of social networks, social capital and social support were considered as providing an appropriate conceptual framework. To accomplish the proposed goals and objectives a sequential, multi-methods approach was adopted, because the topic of social support, and mostly social hindrance, were under-conceptualized in the small businesses context. The first stages of qualitative data collection (interviews and subsequent group discussion) informed the structure and content of a questionnaire to be used in the main stage of quantitative data collection. The quantitative research was conducted in the Alto Alentejo and Oeste regions (Portugal), with 180, face-to-face completed questionnaires, based on a stratified random selection of tourism business owners. Data collected has enabled the identification of who within business owners’ personal network has affected their business initiative, how and with what outcomes, at different moments in time. Helpful and unhelpful behaviours, both from family and people within the personal circle have been identified and submitted to uni and multi analysis. The underlying types of social support and social hindrance were identified. At the theoretical level, this research has demonstrated the benefits of combining theories of social network and social capital, traditionally widely used in small business research, with theory of social support. A richer understanding of the role of social relationships in the business’ context was achieved. This research has also contributed to the conceptualization of negative social interactions, and the term social hindrance is suggested, as opposed to social support. The multi-dimensionality and multiplexity of both constructs has been demonstrated. At the practical level, the findings indicate that social relationships, notably from family and friends, play an important role in the setting up and management of small tourism businesses, namely through the provision of emotional support, informational support and practical aid and assistance. The results demonstrate that there is, indeed, a positive relationship between social support and business performance, whilst negative social interactions, conceptualized as social hindrance, are less likely to affect business performance and success than expected. However, caution is suggested regarding the findings relating to negative social interaction considering the positive association between social desirability and reporting of social hindering behaviours. The study discusses not only the theoretical implications but also the practical ones, namely in the development of policies that aim at facilitating the setting up and management of small tourism businesses in rural areas. Future areas of research are suggested, both with regard to exploring in further detail the data collected and in terms of new and enhanced research approaches.