What is Network Positions

Despite massive investment, few foreign firms doing business in China’s telecommunication sector can claim success. Such failures can be explained by their inability to acquire organizational legitimacy. Legitimacy is garnered when firms successfully market their competencies to key stakeholders, by conforming to regulative processes, institutional norms and cognitive meanings within the environment. But which competencies should a firm push to develop its legitimacy and to whom should they be targeted? While firms can push its in a variety of different ways, there is no guarantee of success in a network of embedded, interdependent stakeholders. Drawing on institutional theory, this chapter presents a case research based framework to describe an iterative and incremental process to help firms manage their network legitimacy. Using this framework, the chapter examines the complementary assets and legitimacy orientations of these firms with network stakeholders, and the resulting inter-partner initiatives and alliances.