Learning in Networks of SMEs: A Case Study in the ICT Industry

Learning in Networks of SMEs: A Case Study in the ICT Industry

Valentina Morandi (University of Brescia, Italy) and Francesca Sgobbi (University of Brescia, Italy)
DOI: 10.4018/jhcitp.2011010105
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Abstract

This paper contributes to the debate on the participation of SMEs in voluntary business networks by framing the relationship between the different types of network-based learning. Learning about networking, which concerns the capability to set, manage, and terminate a strategic alliance, is opposed to learning by networking, which involves the sharing and the joint creation of technical knowledge. The proposed framework is tested in the case of a network of Italian SMEs in the ICT sector. Empirical evidence confirms that learning about networking enables learning by networking and helps to balance those tensions and conflicts that inevitably mark the existence of inter-firm networks. Learning about alliance management provides networked IT entrepreneurs with the capabilities to compete against larger competitors. As learning paths also drive the evolution of inter-firm alliances, networked entrepreneurs would benefit from choosing collective goals in line with their alliance management capabilities.
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Introduction

Thanks to the promise of providing a suitable and timely response to intense and rapid change, inter-organisational networks have gained considerable attention by researchers, business companies and institutional actors (Doz & Hamel, 1998; Parkhe et al., 2006). A growing body of literature has examined the formation of inter-firm linkages (Gulati, 1995; Ahuja, 2000; Park & Zhou, 2006), the governance structure of networks (Jones et al., 1997; Rowley et al., 2000), the dynamics of relationships among network participants (Hite & Hesterly, 2001; Kim et al., 2006) and the impact of networking on firm performance (Bell, 2005; Goerzen, 2007). Prior studies suggest that strategic alliances and networks are powerful means to face intense and dynamic knowledge-based competition. They represent cost- and time-effective alternatives to the purchase or the in-house development of proprietary resources (Grant, 1996) without compromising autonomous decision-making at the firm level (Street & Cameron, 2007). However, participation in networks also exposes members to the risk of opportunistic behaviour by partners and requires the development of alliance management capabilities (Kale et al., 2000; Pisano, 1990; Ireland et al., 2002).

The use of alliances and networks as means to overcome the constraints imposed by limited resources makes those solutions particularly attractive for small and medium enterprises (SMEs). Nevertheless, the available evidence on networks mainly focuses on alliances among large players (see e.g., Browning et al., 1995; Doz, 1996; Simonin, 1997; Kale et al., 2000; Gogan et al., 2007) or local networks of socially and economically intertwined smaller actors in industrial districts (Pyke et al., 1990). Only recently researchers have started to provide evidence on networks of non-district SMEs (for a recent survey see Thorgren et al., 2009), which provide participants with the opportunity to achieve economies of scale and to rationalise internal and external processes (Sher & Lin, 2006). The wide number of potential beneficiaries and the persistence of substantial obstacles to the achievement of the expected advantages (Duysters & Heimericks, 2005) justify the effort of disentangling the processes which underlie cooperation in networks among SMEs.

This paper contributes to the debate on the participation of SMEs in voluntary business networks by modelling the relationship between different types of learning. The proposed approach differentiates between learning about networking, defined as the capability to set, manage and terminate a strategic alliance, and learning by networking, which concerns the sharing of technical knowledge and capabilities among network members and the joint creation of new technical knowledge. We argue that learning about networking is an enabling factor of learning by networking. By developing mutual trust and shared values, network participants develop communication skills and learn how to balance those tensions and conflicts which inevitably arise in alliances. Learning about networking consequently provides a favourable environment in support of the sharing and transfer of technical knowledge.

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