Necessary engagement in stakeholder relationships for successful membership in industrial clusters

Abstract

Regression-based research on industrial clusters has shown that the development and economic impact of clusters largely depends on cluster member firms´ engagement in building stakeholder relationships, which affects cluster members´ growth in sales, employment, and market share, the rate of product innovation and quality, overall competitiveness, and financial performance. Minimal necessary levels of engagement in specific stakeholder relationships to impact performance indicators and maximum levels of engagement above which further efforts become inefficient have not been researched so far. The research provides first insights on those issues by comparing the results of Multiple Regression Analysis and multiple Necessary Condition Analysis applied to empirical data from the Iceland Ocean Cluster. The study contributes to the knowledge on stakeholder relationship management and cluster firm performance. Engagement in all stakeholder relationship building activities has highly significant positive net effects on most indicators of firm performance used in the study. However, the effect sizes of necessary engagements, necessary minimum levels, and levels of inefficiency substantially differ depending on stakeholder and relationship building activity. Cluster firm and cluster organization managers gain insights into the effective allocation of resources to high impact relationship building activities.