A model of network marketing business entrepreneurial performance
- Publication Type:
- Thesis
- Issue Date:
- 2012
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Network marketing organization (NMO) is a growing form of business organization.
According to the World Federation of Direct Selling Association (2009), there has been
a growth in the number of individuals in network marketing business. The current study
focuses on investigating the factors that determine immigrant network marketers’
performance in conducting their network marketing business. This research integrates
the literature on Social Cognitive Theory (Bandura, 1986), Theory of Planned
Behaviour (Ajzen, 1991), immigrant entrepreneurship (Chaganti & Greene, 2002) and
NMO studies (Biggart, 1989; Sparks & Schenk, 2006) to develop a path model. This
model is tested with data obtained from a survey of 227 Chinese immigrant network
marketers in Australia. Adopting the Partial Least Squares methodology, the model is
analysed using SmartPLS (Ringle, Wende & Will, 2005). Results suggest that the
model has a good predictive ability and a high level of goodness of fit.
The current study made several theoretical and empirical contributions. The first one is
the identification of factors (influence of social environment in NMO, motivation, selfefficacy,
desire for opportunity, social competence, human capital and actions
undertaken) that determine immigrants’ performance in pursuing entrepreneurship in
the field setting of network marketing organization. The Theory of Planned Behavior
(Ajzen, 1991) and entrepreneurial intention model (Krueger, 1993) suggest that selfefficacy
and desire for opportunity are the sources of entrepreneurial intention. The
current study identifies that self-efficacy and desire for opportunity are two of the
factors that directly resulted in actions being undertaken by immigrant network markets
to participate in network marketing activities, which in turn led to determine the
performance positively.
Evidence from previous studies indicates that social competence is positively related to
entrepreneurial performance (Baron and Markman 2003). The current study first
discovered that the higher level of social competence will cause more entrepreneurial
actions to be undertaken in the network marketing business context, which determines
the higher level of performance. This study is also first to provide evidence
demonstrating a positive causal relationship between human capital and entrepreneurial
actions and performance in the context of NMO. The second contribution is to find out
the process of how NMOs develop immigrant network marketers and make these
individuals actively participate in NMO activities. Finally, based on the path analysis,
the study develops a model of network marketing business entrepreneurial performance
and contributes to the literature of NMO. The study has practical contributions and
implications as well.
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