Evaluation of business networks in the AusIndustry business network program

Evaluation of business networks in the AusIndustry business network program

Researchers have found that inter-firm collaboration, that is, co-operative business networks, can provide a competitive advantage that would not be possible independently for small sized firms. Work has been done by some governments, for example, Danish, Norwegian, New Zealand, American and Japanese, in the area of policy and practice of business networks because they have realised the importance of business networking and have encouraged collaboration of small firms by assisting in the facilitation of networks. The Australian government established a Business Network Program which ran for four years and several studies were completed on various aspects of the program during that period. However, there had been no particular research that examined the success or other outcomes of these networks, thus providing the basis for the research question addressed in this research: How and why did the business networks developed in the AusIndustry Business Networks Program, succeed or not succeed? Further, questions relating to how and why these outcomes may have occurred or how they may have been measured in the Australian government facilitated program were also unanswered. A review of the extant literature in this area established the theoretical foundations upon which this research is based and made possible the development of a model comprising three constructs or research issues that would address the research question: RI 1: How and why is network success evaluated? RI 2: How and why do the internal and external environments affect the outcomes of the network? RI 3: How does facilitation affect the network? In order to address these research issues and the research question, a protocol was developed and case study interviews with the lead business of sixteen networks participating in the AusIndustry Business Network Program were carried out. The resultant data was compared for each of the research issues through a qualitative methodology from which conclusions and answers to the research question and issues were derived. The results of this research showed that network members evaluated their own outcomes often using multiple measures, both qualitative and quantitative, with the most common criteria being whether the network continued or discontinued. Moreover, it was concluded in this research that successful networks usually had a single goal or purpose for joining a network which they ultimately achieved. In contrast the unsuccessful networks generally joined the network with multiple goals and which were not all achieved, thus contributing to their lack of success. This result was not evident in the literature reviewed in chapter 2. Additionally, the findings showed that high levels of trust, commitment and reciprocity were essential elements in the success of business networks. More importantly this study found that whilst all successful networks had these elements, some of the non successful ones also reported high levels of trust, commitment and reciprocity. Thus it appeared in this study that whilst these elements are important for network success, they do not alone ensure that success, further, it was noted that for any network that reported a lack of any one of these elements, non success was more likely. In relation to this finding was the discovery that in these networks formal contracts between the network members increased the levels of commitment and reciprocity and thus increased the chances of success. When external environmental factors were examined in relation to their impact on network success, it was found that whilst all had some impact on their business generally, competition was noted as having the highest impact and government or legal issues the lowest impact. Finally, this research found that facilitation did not necessarily contribute to a network’s success but that possible a lack of appropriate facilitation style did contribute to the non-success of networks. However, it was clear that the small networks needed less facilitator guidance overall and that the larger networks definitely needed facilitation and guidance. Moreover, it was found that the type of facilitation at the various stages of the network process were more important to the likelihood of success, rather than the mere presence of a facilitator. Thus, the main contribution of this theory building research is to extend the general level of knowledge about business networks and provide new insights into network theory and the value of networks using an original application of existing knowledge. This knowledge can contribute to network education and training in business schools and can contribute to the development of future government policy and practice pertaining to network programs.