Inter-firm networks, as an inter-organizational form, are increasingly perceived as a model for entrepreneurial firm growth. We study egocentric networks of high-growth entrepreneurial firms in the IT industry and explore how these firms grow through the use of external relations and become competitive. Based on case study research, we identify that firms are using relations for a variety of purposes and that every firm has an individual relational mix. This relational mix changes with the development of the firms. While the relative importance of social and reputational networks decrease with the firms' development, co-opetition networks increase over time. Knowledge and innovation networks are a function of reputation and management capacity while the development of marketing networks depends on the firm's culture and management style. Both weak ties and strong ties are important for the growth of the firm since they fulfil different functions. Firm growth is determined by path-dependent relational capa...

Firm networks: external relationships as sources for the growth and competitiveness of entrepreneurial firms

In order to thrive, small businesses are often advised to develop relationships with external organizations that have the potential to assist business development, survival, and growth. A focus on the external relationships of the small business underlines the vital importance of external resources in moving a small business toward increased success and profitability. Covering the period from 1990 to 2002, this paper reviews the small business literature as it relates to the use of these external relationships (such as organizational partnerships, networks, and alliances). In response to both academic and practitioner demand for further research in this area, an exhaustive analysis of the relevant literature was conducted and three “meta” research questions representing the connections within this literature were formed. The resource-based view of the firm, resource dependency theory, and punctuated equilibrium theory are proposed as useful starting points for exploring these research questions and can give direction for moving forward in this research area.

External Relationships and the Small Business: A Review of Small Business Alliance and Network Research*

This study analyzed 119 strategic alliances formed during the period 1987–91. Using the event study methodology, we found that announcements of technological alliances enjoyed greater abnormal retu...

Impact of Strategic Alliances on Firm Valuation

Coopetition—Quo vadis? Past accomplishments and future challenges

Coopetition describes an interorganizational relationship that combines “cooperation” and “competition”. During recent years, coopetition has become an important domain for industrial practice which has led to an increasing rate of publications in academic journals. Despite the growing interest, coopetition research is still fragmented, reflected by divergent uses of the coopetition concept, a lack of generalizability, and a limited contextual focus. This article presents a systematic literature review and a synthesis of high-quality contributions in this field with a focus on a general overview of research on coopetition, coopetition as a strategy, and the management of coopetition. By critically evaluating the current body of literature and definitions, and connecting it to other promising domains, we develop a new definition of coopetition and highlight several promising areas for future research, such as the elaboration of theoretical and empirical approaches, the consideration of contextual contingencies, and implications for innovation that involves interorganizational knowledge flow.

Coopetition: A systematic review, synthesis, and future research directions

This article examines a growing form of interorganizational "multifaceted" relationship under "coopetition," where a buyer, supplier, and/or partner is also a competitor. We first describe different types of such relationships and the strategic dilemmas they present. Then, using resource dependence and transaction cost theories, we consider the antecedent conditions for the formation of such relationships and discuss strategies for dealing with them. Finally, we consider questions for further study of these types of arrangements.

Multifaceted Relationships Under Coopetition Description and Theory

Initial public offerings of 189 firms issued between the years 1986 and 1994 were studied to determine the use of strategic alliances by high technology new ventures. Content analysis was performed on the IPOs for several variables including new venture business strategy, new venture motivation for the alliance and the governance structure of the alliance. Accounting data was also coded. Regression was run with sales growth and as the performance variables. While motives for the strategic alliance alone did not have an impact, for the most part, on performance, the interaction between the motive and structure of the alliance did.

Strategic Alliances in New Ventures: Does Governance Structure Affect New Venture Performance?

Executive Summary Three theories-resource dependency theory, transaction cost theory, and strategic choice theory-offer alternative, often conflicting, explanations of why new ventures choose strategic alliances, along with prescriptions for how best to structure the alliance. This paper investigates if the purported motives, as stated by the firm, form the basis for the structure of the alliance. The sample for this research consisted of 189 high-technology new ventures issuing an IPO during 1989-1995 and met the following conditions: independent startup with less than 10 years from incorporation to IPO date, and at least 3 years of sales. The final sample was 189 firms with 394 alliances. A predictive discriminant analysis was used to see if the underlying propositions are valid; that is, if firm's motivation for an alliance can be used for predicting alliance structure. The theories regarding firm motivation to form alliance were reliable predictors of alliance structure. Introduction There is little doubt that strategic alliances are changing the way American business operates from big companies to small (Lavie, 2002). Strategic alliances and partnerships have become more and more visible as well as an increasingly important means for companies to rapidly expand capabilities, reach new markets, and develop critical new service offerings (Kaplan & Hurd, 2002; Neill, Pfeiffer, & Young-Ybarra, 2001). And, there has been an explosion of articles, both academic and mainstream, describing these alliances and their motives (Lavie, 2002). For purposes of this paper, we will define strategic alliances as any long-term, formal linkage between organizations that offers actual or potential strategic advantage to both organizations (Jarillo, 1988; Olleros & Macdonald, 1988; Silverman & Baum, 2002). These linkages or governance structures include a wide range of alliance structures have emerged involving both equity structures and non-equity structures (Das & Teng, 2002). Equity arrangements refer to structures that include some form of ownership such as minority investment of one firm in the other or joint ventures. Non-equity arrangements refer to long-term contracts or agreements with no ownership involved such as supply, manufacturing, marketing, and technology exchange and licensing agreements and cooperative R&D. And while the literature has described these linkages and suggested when and how strategic alliances should be used, very little evidence exists as to whether these theories are being applied in practice. Three competing theories, Resource Dependency, Transaction Cost and Strategic Choice suggest both reasons why firms enter into strategic alliances or their motivations for these alliances and how best to structure the strategic alliance. But, little research has been done focusing on the connection between motivation and structure. All three theories suggest this connection exists, but this has yet to be tested. This paper will further develop the theory in this area. Specifically this paper will focus on whether the motives for the alliance impact the choice of governance structure. Initial public offerings of 189 firms issued between the years 1986 and 1994 were studied to determine the use of strategic alliances by high technology new ventures (firms less than 10 years old). Content analysis was performed on the IPOs for several variables including new venture motivation for the alliance and the governance structure of the alliance. Predictive discriminant analysis was used to determine if indeed these three theories were useful in predicting alliance formation. Literature Review Three theories -resource dependency theory, transaction cost theory, and strategic choice theory -offer alternative explanations of why new ventures choose strategic alliances, along with prescriptions for how best to structure the alliance. These three theories, while often cited in the literature, actually offer conflicting advice to practitioners about how best to structure an alliance. …

Strategic Alliance Choice: Usefulness of Proposed Theories

INTRODUCTION AND LITERATURE REVIEW Small businesses represent 90% of all businesses and employ two-thirds of the population in rural communities of the United States (Velazquez, 2006). In Pennsylvania, small businesses play an even greater role, with 98% of all Pennsylvania businesses employing fewer than 100 workers, according to the Pennsylvania Department of Labor and Industry. These small businesses also represent the main source of entrepreneurial activity and employment growth in most rural communities. It is important to recognize that it is not the businesses themselves, but the entrepreneurs and small business owners who are the lifeblood of Pennsylvania's rural small businesses. An understanding of who rural Pennsylvania's typical small business owners are is an important step in assessing their needs and delivering business assistance services. The research in this area is typically descriptive in nature and contains little more than basic statistical analysis. Moreover, the majority of the recent literature examines rural small businesses at the industry and business level but rarely at the owner level. Much of this research is narrow in scope, profiling only minority segments such as women or veteran owned business owners. A select few studies examine the broader group of all small business owners. A 2004 study by the W. K. Kellogg Foundations looked at rural entrepreneurship and found that 10.5% of the U.S. adult population is engaged in some form of "entrepreneurial activity" (W. K. Kellogg & Corporation for Enterprise Development, 2004). Another study, the Kauffman Index of Entrepreneurial Activity (Fairlie, 2005), analyzed national data pertaining to small business owners and entrepreneurs, drawing conclusions about their typical age, gender, race, and regional location. While both of these reports reaffirm the importance of small businesses to rural regions, neither provides comprehensive profiles of the typical rural small business owners which is necessary to effectively create and target business assistance programs. This study presents a broad attempt at profiling Pennsylvania's small business owners. A second topic of significant research pertains to the assessment of publicly funded financing and technical assistance programs (Goetz, Partridge, Deller & Fleming, 2010). A recent study by Forbes (2010) found that those organizations that take advantage of outside advice--whether professional or informal--have been more successful and experienced stronger turnover than their counterparts. The question of whether government has a role in stimulating entrepreneurship and, if so, how to evaluate whether policy makes a difference in rural small businesses is an important one (Atkinson, 2004; Forbes, 2010), Most of the literature pertaining to rural small business owners, and the public policy that affects them, echoes Atkinson's position on the importance of rural policy to the nation's long term economic growth along with the fact that there are differences between policy as it relates to rural businesses (Dabson, 2011). Following the 2008/2009 recession, small businesses in their role as job generators are even more important along with choosing the right policies to put in place (Baily, M., Dynan, K., & Elliot, D., 2012). However, few studies delve deep enough to even begin to evaluate the public programs that are in place to assist rural small business owners. Although, some literature is available on federal, state, and local government policy in rural areas pertaining to economic development and business and entrepreneurial assistance, the majority of this literature is descriptive in nature and provides little in the way of in-depth statistical analysis on which to frame public policy. Objectives A team of Indiana University of Pennsylvania (IUP) faculty members were awarded a grant from the Center for Rural Pennsylvania to pursue five objectives: * Create a profile of rural small business owners. …

A Profile of Small Business Owners in Rural Pennsylvania and Their Awareness of Publically Funded Business Assistance Programs

One of the greatest challenges facing any business manager or owner is breaking bad news (BBN).  This is especially true for managers and owners of small business as they are likely to have contact with a greater variety of personnel, more contact with customers, and less ability to delegate such tasks.  Research in the management literature has been limited on this topic.  As such, we went to an alternative field of research, BBN in the medical field, and recommend a strategy that small business practitioners can adopt to tackle this challenging task.  This is a particularly difficult issue for student consulting projects such as those encountered in the Small Business Institute (SBI) Program where not all outcomes are what the client would like to hear.

https://www.sbij.org/index.php/SBIJ/article/download/311/254

Joette Wisnieski

Papers

Multifaceted Relationships Under Coopetition Description and Theory

Strategic Alliances in New Ventures: Does Governance Structure Affect New Venture Performance?

Strategic Alliance Choice: Usefulness of Proposed Theories

A Profile of Small Business Owners in Rural Pennsylvania and Their Awareness of Publically Funded Business Assistance Programs

A Critical Tool for Small Business -- SPIKES: Six steps for breaking bad news