Approaches to relationship development processes in inter‐firm networks

TLDR

The paper investigates how inter‑organisational business networks grow and decline. Three rival theories—predetermined stage sequences, unpredictable state evolution, and joinings theory—are examined. A case‑study approach was employed, gathering in‑depth interview data from network managers and owners of firms partnering overseas in Australian and Asian markets. The study found that inter‑firm network development follows unpredictable states, resulting in a six‑state model and offering implications for managerial practice and future research.

Abstract

This paper examines the dynamics of business networks, that is, how these inter‐organisational networks grow and decline. Three rival theories are investigated: predetermined sequence of stages, evolution of unpredictable states and joinings theory which focus on positioning, repositioning and exit. A case study methodology was used for data collection and analysis. Data were collected from in‐depth interviews with network managers/owners of firms networking with other overseas firms entering into Australian and Asian markets. The findings revealed that inter‐firm network development is an evolution of unpredictable states rather than a predetermined sequence of irreversible stages. In turn, a six “states” model of inter‐firm network development was formulated from data. Implications for managerial practices and further research are advanced.