Abstract
PurposeThe purpose of this paper is to examine network failures and the main reasons why network organizations, intentionally developed by a group of actors to pursue specific goals, become unfruitful and fail in their goals and expectations of creating collective value. The goal of this paper is thus to contribute a better understanding of the reasons network organizations encounter problems in their dynamics that prevent them from reaching the expected outcomes.Design/methodology/approachThe study is firstly based on a literature review finalized to identify the main variables considered as potentially impacting on network failures. Secondly, the paper is based on a survey conducted on 189 strategic networks that highlighted difficulties in achieving their goals. An analysis of the 24 questionnaires returned generated the results discussed. The empirical study concerns strategic networks intentionally created and signed by Italian SMEs according to a specific law designed to promote the development of inter-firm cooperation (“network contracts”).FindingsThe results of the research highlight the role of specific key items related to individual, structural, legitimacy, interaction and governance variables in explaining failures in network organizations. According to the data, failure can occur immediately before the network start-up, resulting in a blocked network or in a subsequent developmental stage, resulting in a dormant network. The empirical research demonstrated that the items affecting network failure differ between blocked and dormant networks. The authors explain such differences, considering them according to the expected goals declared by the two different types of networks.Originality/valueThe question of why networks fail is relevant in times of disruption and digitalization when new forms of organization are needed to link businesses and various stakeholders and thereby develop innovative and sustainable ideas for an entrepreneurial future. However, very few studies have examined network failure. The study contributes to this field of research by investigating the dynamics of networks intentionally developed to reach shared goals. The findings can be useful to both companies that decide to start up a strategic network and the policymakers that promote, finance and monitor inter-firm collaboration.
Highlights
This paper examines network failures to determine why network organizations, intentionally developed by a group of actors to pursue specific goals, encounter problems and fail to reach these goals and to meet the actors’ expectations of creating collective value
Some researchers have underscored the criticism of the start-up stage (Snehota and Hakansson, 1995; Håkansson and Ford, 2002), analyzed the factors that can compromise the continuity of business-tobusiness relationships (Doz, 1996; Arino and de la Torre, 1998) or highlighted the problems and frictions leading to the termination of business relationships
We selected network contracts (NCs) according to the following criteria: first, we focused on NCs categorized in the manufacturing industry because of the need and relevance of SMEs’ aggregation to promote Italian industrial competitiveness
Summary
This paper examines network failures to determine why network organizations, intentionally developed by a group of actors to pursue specific goals, encounter problems and fail to reach these goals and to meet the actors’ expectations of creating collective value. A few scholars have studied the burdens of business relationships and interdependencies, focusing on the dark side of business relationships (Snehota and Hakansson, 1995; Anderson and Jap, 2005). Other scholars have studied the critical issues in the development of business relationships using a relationship lifecycle framework (Johnston and Hausman, 2006; Terawatanavong et al, 2007). Some researchers have underscored the criticism of the start-up stage (Snehota and Hakansson, 1995; Håkansson and Ford, 2002), analyzed the factors that can compromise the continuity of business-tobusiness relationships (Doz, 1996; Arino and de la Torre, 1998) or highlighted the problems and frictions leading to the termination of business relationships
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