Academic journal article Review of European Studies

Features of Forming an Interaction Network of an Entrepreneurial Structure

Academic journal article Review of European Studies

Features of Forming an Interaction Network of an Entrepreneurial Structure

Article excerpt

Abstract

The purpose of this article is aimed at identifying features of forming an interaction network of an entrepreneurial structure for developing real competition. The presented article defines the formation of different types of cross-cutting strategic management processes of an entrepreneurial structure with divergent interests of employers and hired managers. The basis of the presented work appears to be the use of modeling in the theory of relations between business structures. The paper presents a mechanism for forming an interaction network of an entrepreneurial structure with counterparties of direct exposure environment. This article is intended for managers, executives, researchers involved in entrepreneurial structures development.

Keywords: entrepreneurial structures, agency conflict, an interaction network, competition, modeling

(ProQuest: ... denotes formulae omitted.)

1. Introduction

1.1 Background

In the basis of modern ideas about effective management of the interaction between market participants there is a complex of management approaches which have been dynamically developing abroad for several decades already, finding throughout the last decade the reflection in contemporary Russian science, as well. Addressing the issues of competitiveness is currently being defined, including management of the relationships between market participants.

Over the past 20 years there have been significant qualitative changes in business practices that determined the rapid development of the relations theory. Currently, companies, including Russian ones, in order to create competitive advantages are increasingly using strategies corresponding to this dynamic theory. Creation of well-functioning inter-firm networks by Russian companies, as a result of controlling the strategic management processes, contributes to form sustainable competitive advantages in the Russian and international markets. As the foreign companies' experience shows, the higher the efficiency of interaction is between the companies, the higher is their level of competitiveness.

In this regard, consideration of issues on building and managing relationships of a firm with the network members as a new strategy for managing the strategic management processes of Russian companies seems relevant.

1.2 Status of the Problem

The firm's ability to create and maintain a competitive advantage through the use of complex organizational mechanisms of controlling relationships with other market players management, can be seen as its core competence, because the external environmental appropriateness of the firm is achieved by adjustment of internal resources and a change in its own activities. Entrepreneurial structures to a certain extent can choose the environment, thus improving their position in the transaction (Hakansson & Snehota, 1989). Network connections-is a unique social resource, inaccessible and little to be copied by other market entities (Teece, Pisano, & Shuen, 2003; Katkalo, 2006). Immaterial economic resources (knowledge and skills, popularity and reputation), formed in external relations, give the entrepreneurial structures distinctive identity in the market and provide them with sustainable competitive advantages (Coleman, 2001; Radaev, 2003). Meanwhile, all researchers, regardless of affiliation to a particular scientific field, noted that network forms of organization are the basis for developing modern business, complementing the vertically-integrated companies (Rudenko & Popova).

1.3 Analysis of the Experience in Managing Interaction of Market Participants

Depending on the research objectives, different approaches to classification of models are used. Within the framework of constructing models for managing the relationships portfolio, various ways to assess the market entities and the relationships with them are offered, for example, on the basis of: attractiveness of the partner and the degree of dependence on it (Olsen & Ellarm, 1997); coherence of interests and values of relationships with partners (Kusch, 2008; Yuldasheva & Gorodilov, 2009); the risk of doing business and the added value of the counterparty product (Wilson, 1995); the attractiveness of the partner and its strategic compatibility with the company (Gurkov, 2008) and others. …

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