The life cycle of small-firm networks: an evaluation of Brazilian business networks

Abstract

Interorganizational agreements and cooperative business networks became an important strategy for companies facing competitive disadvantages. Specially small and medium firms adopted collaborative network models as a way to overcome common problems. Over 1,000 small-firm networks (SFNs) are estimated to have been created in Brazil since the year 2000. This study aimed to propose a SFNs life cycle model, applying it to a sample of twenty-eight SFNs established in two regions of southern Brazil. The results revealed that 68% of the analyzed SFNs are declining or no longer in business. Among the active business networks, 21% remain at the development stage, and only 11% have achieved consolidation. Most SFNs analyzed fell into a stage of decline early on in the life cycle, incapable of reaching Consolidation. Although results are restricted to the analyzed sample, our study highlights that major managerial efforts are necessary to reach the consolidation stage due to network complexity and expectations of network members. We conclude the paper by presenting subsidies for public policy makers and strategies that SFNs may adopt to reach the status of consolidated networks.

Small-Firm Networks and strategies for consolidation: evidence from the Brazilian context

“…Ahlström-Söderling (2003) is the only one who has applied the model in a case study of a business network in the furniture segment. Due to the lack of models that analyze the pattern of the development of SFNs, Wegner, Alievi and Begnis (2015) proposed a model which specifically considers the characteristics of this interorganizational network model.…”

“…Based on existing studies for the analysis of interorganizational network dynamics (Ring & Van de Ven, 1994;D'aunno & Zuckerman, 1987), and taking into consideration the fact that existing models lie on strategic alliances or partnerships, Wegner et al (2015) proposed a life cycle model for SFNs. The model describes six stages that characterize the dynamics of SFNs development.…”

“…Another key factor for developing cooperation is the need to make strategic and cultural adjustments amongst participants (Dwyer et al, 1987). The model proposed by Wegner et al (2015) presents six factors for analysis divided into two categories: i) network organization and management; ii) relationships and exchanges between members. Such factors may influence network development and therefore should be considered in developing strategies for network consolidation.…”

Impact of the life cycle of company to job satisfaction

“…Tab. 4 shows results of Levin's test of homogeneity of variance, examining the equality of variances in the results in each of the six groups of the life cycle of company. Columns represent Levene F statistic (Levene statistic), the degrees of freedom (df1 and df2) for pairs of independent and dependent variables and statistical significance (sig.…”

“…In countries in transition, such as Serbia, workers are in a position to be lucky if they are employed, as the unemployment rate is extremely high. [4]. In the research presented here the following classification is used:…”