How Should a Small Company Interact in Its Business Network to Sustain Its Exchange Effectiveness?

Abstract

This paper investigates the dynamic alignment of network and business development of two small firms in the printing industry. Developments are followed over more than 8 years. The aim of the paper is to understand how small firms can manage their network relations by maintaining both their efficiency in existing business and flexibility to develop new business. The case comparison suggests that different networking approaches drive business development. For successful business development both strong and varied ties as well as the existence of different intermediary functions of partners are necessary.2

2 Third Actors Initiating Business Relationships for a Medical Device Start Up: Effect on Network Embedding and Venture Creation Processes

“…The other two functions of Holmen and Pedersen (2003) were either not (insulating) or less (relating) evident. This is in line with the findings of Raesfeld and Roos (2008), who argued that in the opportunity discovering, creating and exploiting phases, the third actor would relate, join and insulate, respectively. The start-up was clearly focused on creating the artificial pancreas: it had passed beyond discovering the need for it, while it paid only limited attention to its From the discussions of these functions and roles of the third actors involved in the start-up's relationship initiation, it becomes clear that they acted with a tertius iungens orientation.…”

“…Based on these bodies of literature, they showed that three venture creation processes can distinguished: (1) the opportunity-centred process is focused on building a start-up's business concept; (2) the technology-centred process involves connecting the initial ideas for new products to innovative technological solutions; and (3) the internationalisationcentred process consists of positioning a start-up in relation to actors in the international, interorganisational network (Mainela et al, 2011). However, these processes are not independent: a Raesfeld and Roos (2008) linked the three phases of a small firm's business development to the three functions of third actors defined by Holmen and Pedersen (2003). They argued that during opportunity discovery, third actors relate organisations to advance the development of the weak ties necessary for the generation of new business opportunities.…”

“…Only upon initiating of the relationship with the market leader did the start-up take the first steps in bringing the artificial pancreas to market (Oukes & Raesfeld, 2016). As soon as the focus of the start-up's focus comes increasingly to lie on the commercialisation of its artificial pancreas, it can expected that the role, function and type of the third actor will change (Raesfeld & Roos, 2008). For example, the market leader may start to insulate the start-up and the distributors or sale agencies in its network.…”

“…For example, the market leader may start to insulate the start-up and the distributors or sale agencies in its network. In this way, it can facilitate the development of the weak ties necessary to deliver products efficiently to customers (Raesfeld & Roos, 2008).…”

A start-up in interaction with its partners

“…Within the IMP approach scholars have researched how start-ups 82 initiate new relationships with customers (La Rocca, Ford, & Snehota, 2013). Moreover, it was 83 investigated how a small company should interact in its business network (Raesfeld & Roos, 2008). 84…”