Academic journal article Global Business and Management Research: An International Journal

Inter-Organizational Relationship and Innovation: A Review of Literature

Academic journal article Global Business and Management Research: An International Journal

Inter-Organizational Relationship and Innovation: A Review of Literature

Article excerpt

Introduction

The network approach is not new. It dates back to the 1930s in organizational studies but also owes much to its founding disciplines and conceptual origins, namely sociology, anthropology and role theory (Jack, 2010). The network concept has captured a special position in the scientific literature of business, organization, entrepreneurship and management.

This is one of the important factors that lead to improvement of business performance (Li, Cui & Li, 2008). Networks provide access to resources like capital (Aldrich & Zimmer, 1987), power and influence (Sousa et al., 2008). Organizations need different relations to gain access to knowledge and information about innovations, investors and markets (Aldrich and Martinez, 2000).

Inter-organizational networks and their effects on firms' capability and performance has been subject of many researches in the area of network studies. But, there is not a clear and widely accepted definition of this concept mainly because this term has a metaphorical origin and also different disciplines have used it frequently in their research approaches. (Borgatti et al., 2009). The term network is not always used to describe the inter-organizational relations. Many who study business, community, and other organizational networks use terms partnerships, strategic alliances, inter-organizational relationships, coalitions, cooperative arrangements, or collaborative agreements (Provan et al., 2007). In inter-organizational research, "networks" can refer to as different phenomena such as whole networks, interlocks and strictly dyadic relations (Borgatti et al., 2009). Many, in particular those tying their work to resource dependence theory and transaction cost economics or researching inter-organizational contracts also focus only on dyads (relationships between two organizations) (Provan et al., 2007). One of the most widely accepted definitions in the social network analysis literature defines networks as "a set of nodes (e.g. persons, organizations) linked by a set of social relationships (e.g. Friendships, transfer of funds, overlapping membership) of a specified type" (Borgatti et al., 2009). Despite differences, nearly all definitions refer to certain common themes, including social interaction (of individuals acting on behalf of their organizations), relationships, connectedness, collaboration, collective action, trust, and cooperation (Provan et al., 2007). Network research can involve the study of a wide range of features and aspects such as network size, structure, interactional processes, influences, behaviors and skills and this might be an advantage and also a constraint (Jack, 2010).

In recent years, the inter-organizational networks have gained attention of innovation researchers. Inter-organizational networks have been identified as one of the critical success factors in implementation of innovations. Innovation is development and implementation of new ideas (Van de Ven, 1986). Innovations are increasingly taking place in networks, in which actors with different backgrounds are involved (Kallio et al., 2010). When the knowledge base of an industry is both complex and expanding and the sources of expertise are widely dispersed, the locus of innovation will be found in networks of learning, rather than in individual firms (Powell et al., 1996). Rothwell (1977) gave strong support to the idea that success in innovation has to do with long-term relationships and close interaction with agents external to the firm. This is particularly evident in small knowledge intensive firms which have few resources (Jenssen & Nybakk, 2013). Soh and Roberts (2003) Believe that empirical investigation of an integrated framework on networks of innovators is important because the convergence of open systems technologies in the recent years has intensified the collaboration efforts among competing firms and increased the number of joint product developments significantly. …

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