The Use of Networks as a Strategic Approach of Micro-Enterprises in the Agri-Food Sector

Abstract

<jats:p> Increasing competition and regulatory changes place micro-sized enterprises (MSEs) in the agri-food sector under strong competitive pressure. Smallness may be a substantial barrier to success. Previous research suggests that networks can be used strategically to combat these constraints. However, there is a lack of understanding of the extent to which this finding may be applicable to MSEs and the local agri-food sector. Based on eight in-depth interviews of agri-food MSEs, it is concluded that MSEs apply networks to strengthen their competitive advantage – for example, by forming stronger customer relationships. The MSEs are using their networks to combat their size-related disadvantages, but not by growing; rather, the networks enable them to remain small and independent while further strengthening their position as small producers. </jats:p>

Norms and Trust-Shaping Relationships among Food-Exporting SMEs in Ghana

“…Networks could be argued to be particularly important for enterprise development in countries characterized by less developed formal institutions (Welter and Smallbone, 2006;Prashantham and Dhanaraj, 2010). Networks with customers have been found to enhance the competitiveness of micro-enterprises in the agri-food sector (Brinkmann et al, 2014). Recent studies also provide examples of how networks built on norms and trust could facilitate internationalization in diverse spatial and cultural contexts such as China (Luo, 2003), India (Chetty and Agndal, 2007), Malaysia (Zain and Ng, 2006), Brazil (Rodrigues and Child, 2012), Eritrea (Ghauri et al, 2003) and Ghana (Amoako and Lyon, 2014).…”

“…SMEs have distinctive characteristics which set them apart from large firms which render them resourceconstrained (Brinkmann et al, 2014). SMEs may therefore use networks as sources of both opportunities and complementary resources (Ferrary and Granovetter, 2009;Jämsä et al, 2011).…”

Internationalization Business Models and Patterns of SMEs and MNEs: A Qualitative Multi-Case Study in the Agrifood Sector

“…Focusing on qualitative methods is the main road for advancing the internationalization theory [49,64]. For the field of agribusiness, case study research has been deemed appropriate and successfully applied [17,[101][102][103][104]. A full and transparent account of the process of analysis used to transform the set of data emanating from the interview-based study into a well-founded, coherent and illuminating narrative, was kept [105].…”

“…MNEs can be described more as interorganizational groupings than unitary organizations [14]. SMEs use their networks to combat size-related disadvantages, but that is not done by growth; rather, the networks enable them to remain small and independent, while further strengthening their position as small producers [17].…”

“…Internationalization research has been primarily confined to an empirical examination of either MNCs or SMEs rendering cross-sector comparisons difficult. However, agri-food sector SMEs depend heavily on their networks for various reasons [17]. The cooperation of companies within the sector can also be applied to societal challenges, such as achieving the United Nations' Sustainable Development Goals [47].…”