Understanding inter-firm network: a theoretical review

Abstract

In business strategy research, firms are typically studied and analysed as autonomous entities. Researchers make enormous effort in investigating how to assist businesses to strategically utilise their external industry resources, internal resources and capabilities to achieve competitive advantages. Beginning in the early 1990s, this trend is continually being updated by an increasing concern when studying firms that are embedded in organisational networks. Corresponding to this, there has been a significant accumulation of studies focusing on inter-firm relations and networks. However, rather than consolidating any conceptual framework, these studies contribute to a rather complicated and patchy situation marked by a diversity of concepts, theories, and research results. The study provides researchers and practitioners a taxonomic overview of key perspectives dealing with inter-firm networks. The paper primarily describes the inter-firm network from a variety of theoretical perspectives. Key arguments of different theoretical perspectives are presented and critiques from some schools of thought are discussed. It is anticipated that this study will broaden the current understanding of the network concept and raise a wider awareness of different perspectives in interpreting this strategic entity.