Small And Medium-sized Enterprises Networks Research Articles

International network management for the purpose of host market expansion: The mediating effect of co-innovation in the networks of SMEs

Research shows that innovation facilitates internationalization and that the customer network is an important source of technical and market knowledge. Yet, little is known about how co-innovation within a business relationship with a key international customer relates to international network management and international growth beyond the focal business relationship. The paper contributes to international entrepreneurship research by investigating (1) international business relationship learning mechanisms that reinforce co-innovation within a dyadic business relationship with a key customer (2) and the link between co-innovation outcome in the business relationship and international network management for purposes of foreign market expansion beyond the dyadic business relationship. Three hypotheses were developed and tested on a sample of 188 internationalizing small- and medium-sized enterprises (SMEs) using linear structural relations (LISREL) structural equation modeling. The analysis shows that an SME’s (i) awareness of a customer’s complementary knowledge and (ii) innovation-oriented customer relationships leads to increased co-innovation within a dyadic business relationship with a key customer. Moreover, successful co-innovation with a key customer increases the likelihood that the focal SME will attempt at international network management by drawing on the key customer as a bridge to new customers and suppliers on the foreign host market. The findings provide a link between innovation within a dyadic business relationship and international network management for the purpose of foreign market expansion into the wider network on the host market. The findings hence contribute to our understanding of the mediating role of co-innovation in the internationalization process of SMEs.

Research Note: Networking among small and medium-sized enterprises: Meeting the challenge of promoting safety and health measures

Researchers and regulatory bodies lack an in-depth understanding of how small and mediumsized enterprises (SMEs) make decisions about workplace health and safety improvements and the role played by business networks in these decisions. To improve regulation and support there is a need to understand SMEs better and, to create the means to empower them to work systematically with occupational health and safety. The present study suggests that networks of SMEs might be a suitable target for interventions. Realistic evaluation and social capital theory based on data obtained via qualitative interviews, document analysis and observations were used to analyse two networks of small enterprises (in dairy and brewery) in Denmark that launched similar occupational health projects but had different outcomes. Whilst both Dairy (D) and Brewery (B) networks had active external funding, the following differences between external and internal mechanisms driving SME workplace safety decisions within each network were found: External - pressures from labour inspectors (D - active, B - limited), professional support (D - active, B - partly); Internal - horizontal relations/shared identity (D - very active, B - limited), mutual trust (D - active, B - limited), workers involved in ‘button up’ process (D - to some extent, B - nonexistent), exclusion criteria (D - agreed, B - none), pact on openness (D - agreed, B - not defined), shared commitment to new standards (D - limited, B - non-existent). It is concluded that both external pressures and internal motivations must be present to drive SMEs within a network to improve health and safety conditions.

Methods for Developing Innovative SME Networks

The purpose of this paper is to study whether and how to facilitate the creation of new networks and discuss methods for developing innovative small- and medium-sized enterprise (SME) networks, or more specifically methods that initiate knowledge mobility and support the development of trustful relationships. Network individual, group, and plenary reflection (IGP), a hybrid dialog method, is developed and utilised to this aim. To answer the research question ‘In what way is Network IGP a method for developing innovative SME networks?’, a case study with longitudinal—mostly qualitative—data and direct participation is conducted in a network of water cleansing SMEs from 2007 to 2013. The answer to the research question is that Network IGP is a method that can be facilitated from the outside to build trustful relationships and initiate mobility of tacit knowledge, especially during the emergence stage, of innovative SME networks. The paper also demonstrates that it is possible to support the emergence and development of SME networks from the outside, building on the participants’ knowledge and history. The paper has theoretical, methodological, and practical implications.

Process-based cooperation support for complementary outtasking in production networks of SME

This paper deals with the development of a process-based cooperation support system for outtasking of complementary competencies in production networks of Small and Medium-sized Enterprises (SMEs). For this, an exemplary application domain for small and medium-sized manufacturing enterprises deciding to start cooperation with other SMEs will be presented. The phases and the associated tasks of cooperation are described and how the web services support and guide the company in these processes. Specific tasks are the analysis of core competencies, the review of the ability to cooperate and the implementation of a cross-company coordination process into the production planning process.

SME Network Characteristics vs. Product Innovativeness: How to Achieve High Innovation Performance

Small‐ and medium‐sized enterprises (SMEs) must on the one hand innovate for company survival with the appropriate degree of product innovativeness, and on the other they need to collaborate and focus on core competences for efficiency matters. This research examines the relation of network characteristics and product innovativeness on innovation performance in SMEs. We tested hypotheses on the relationship between these three variables via data gathered from 60 SMEs, active in the medical devices sector. In this context we aim to offer consensus on the theoretical and empirical question of whether or not network characteristics and product innovativeness have a direct effect on innovation performance of SMEs. Results show no significant direct effect of product innovativeness on innovation performance. A positive interaction effect of multiple network characteristics on innovation performance was found, which confirms the significant importance of network configuration on innovation performance for SMEs. It indicates that, for SMEs in a highly regulated sector like the medical devices sector, the interaction of network characteristics is of crucial importance for high innovation performance. It is the combination of network characteristics that counts.

Inter‐firm relations in SME clusters and the link to marketing performance

PurposeNetworks are increasingly recognised as being important to successful marketing amongst small and medium‐sized enterprises (SMEs). The purpose of this study is to investigate the structure and content of network relations amongst SME clusters, and explore the link to marketing performance.Design/methodology/approachFollowing a review of the literature on SME networks and marketing performance, case study analysis is performed on four SME clusters in the Greek agrifood sector.FindingsAnalysis finds that the configuration of horizontal relationships between producer SMEs has little bearing on marketing performance, unless also accompanied by strong vertical connections between key members of the SME cluster and other actors in the supply chain. The disposition of these key members towards information‐seeking and contact building outside their SME clusters is also identified as important.Practical implicationsTo improve marketing performance, leaders in SME clusters should focus on building strong vertical relationships in the supply chain, and encourage knowledge gathering from external market contacts.Originality/valueUnlike many studies of SMEs, networks and marketing performance, this research investigates the networking phenomenon at the level of whole SME clusters, rather than at the level of individual SME owner‐managers.

Orchestrating innovation networks: The case of innovation brokers in the agri-food sector

This explorative study of network orchestration processes conducted by innovation brokers addresses new issues in bridging small and medium-sized enterprises (SMEs) and research institutes in innovation networks. The study includes four in-depth case studies in the agri-food sector from different countries: the Netherlands, Germany and France. A guiding research question is how innovation brokers successfully orchestrate innovation networks of SMEs. Based on literature research and cases, we conclude that the innovation broker may have great added value for innovation networks with divergent organizations, especially when the innovation broker takes the lead in three network orchestration functions: innovation initiation, network composition and innovation process management. In addition, the case findings offer best practices of innovation brokers for these orchestration processes.

Finding the hidden value in SME networks

Drawing on both social network and social capital theory, this study explores the formation of 'elusive ensembles' on the internet in BioTech Small and Medium-Sized Enterprises (SMEs). Social network and structural hole theories are combined to identify the social capital associated with a network, and this in turn is used to signal entrepreneurial opportunity. Interestingly the findings outline areas where better network coordination is possible. Specifically, the research suggests that entrepreneurial opportunities exist (1) to develop better relationships with those key actors who can exert influence on the network and (2) for enhancing value in the distribution channel by taking on the role as a network intermediary where suitable.

Performance management of regional clusters and SME cooperation networks

This paper presents a proposal of a performance management model for regional clusters and Small- and Medium-sized Enterprise (SME) cooperation networks. Through a literature review and case studies of two Brazilian clusters and two German cooperation networks, it was possible to define the central aspects to manage regional SME cooperation networks. Therefore some fundamental characteristics for managing the performance of clusters and cooperation networks are proposed: identification of the stakeholders, definitions of common strategies and objectives, development of collaborative improvement actions, design of a performance management system, and organisation of a support infrastructure and promotion of social capital. Finally, it could be said that more specific methods and tools should be drawn up for SME clusters and networks and that SME regional cooperation networks are a very promising way to promote regional sustainable development.

Financial statement analysis of a network of SMEs: towards measurement of network performance

This study presents a framework for the financial statement analysis of a network of Small and Medium-sized Enterprises (SMEs). The objective is to make an approach towards a systematic Network Financial Statement Analysis (NFSA). Network is regarded as a virtual entity physically consisted of the resources allocated by the partner firms for the use of the network. The data for the NFSA are drawn from the public financial statements of the partner firms. The proportion of income statement items and balance sheet items is traced by a simple estimation to the resources used by the network and identified by each firm. Virtual network income statement and balance sheet are made up of the allocated proportions. The NFSA is focused on eight measurement objects that are causally related to form a strategic map: resources; growth; concentration; productivity; profitability; mutual flows; risk and value. Several measures for each object are suggested. The NFSA is illustrated by a case of a leader-driven network of SMEs. This study is a part of a multidisciplinary research project on the performance measurement system for SME networks.

SME marketing networking: a strategic approach

Abstract A strategic approach to how small and medium sized enterprises (SMEs) use their marketing networks during a time of change in their operating context is the focus of this article. SME networking is analysed using the structural, relational and usage dimensions associated with network frameworks. Specifically, the paper examines marketing network processes (MNPs) that are investigated through the use of network behaviour for SME management. The development of a thematic approach in viewing a network as a strategic analytical construct allowed these MNPs to be studied in relation to the specific theme chosen and how they do their strategic marketing. The research in this paper focused on the use of SME network activities in relation to strategic marketing, to gain an in‐depth understanding of the nature and role of strategic marketing networks in SMEs during a time of environmental change. Copyright © 2004 John Wiley & Sons, Ltd.

We all stand together: using cluster associations to create worldwide presence for SMEs

This paper examines the potential for cluster associations to act globally on behalf of small and medium-sized enterprises (SMEs) utilising networked internet-based capabilities to trade globally. The slow up-take of such new technology and the problems involved is also becoming of increased interest to policymakers. This paper argues that cluster associations with low power-dependence and decentralised structures are better able to provide the necessary support that networks of SMEs require to utilise the technology.

Food SME networks: Process and governance - The case of Parma ham

Networking between firms has received much attention over the last two decades; in this context the study of inter-firm co-ordination has prompted a multidisciplinary approach. This paper briefly reviews the Interaction Approach (IA) to networking and applies it to a Small and Medium-sized Enterprise (SME) network. A case study methodology was used to investigate the establishment, evolution and operation of the Parma Ham network. The networking process was found to be influenced by member goal congruence, the level and type/content of interaction and, in particular, the relevance of network services to members' needs and expectations. The Parma Ham network was also found to co-ordinate a series of transaction-transformation chains that enhanced member competitiveness. However, from an enterprise perspective such competitiveness is to a large extent based on external collectively owned competencies. While the network relied on procedural type governance mechanisms (e.g. inspection, rules, procedures), there was also evidence of strong ties among producers, and these ties influenced behaviour and acted as relational and social governance mechanisms.

Co-operative production planning for small- and medium-sized enterprises

Minimising manufacturing cost and production time parallel to raising the quality and the shipment reliability are important challenges in every production system. In case of distributed production systems the management of the above-mentioned criteria has great significance and needs a complex, co-operative handling of the problems. A new, co-operative manufacturing network model is proposed for co-ordinating the production of Small- and Medium-sized Enterprises (SMEs), based on the holonic paradigm. The paper introduces the main modules of the model succinctly and describes an application under realisation in Hungary, in an agricultural SME network, pointing its economic benefits as well.