The Development of Enterprises Network in a Region: Theoretical Aspects

Egle Kazlauskiene, Vilma Tamuliene, Raimonda Minkute-Henrickson


Источник:http://internet.ktu.lt/lt/mokslas/zurnalai/inzeko/45/1392-2758-2005-5-45-43.pdf


The article presents theoretical substantiation of the aspects enterprise network development: to prove, on the one hand, that peculiarities of enterprise network formation and functioning influence the possibilities of its development in a region, on the other hand, the development of enterprise network gives positive incentives for the region to renovate as well as it influences regional development.

Theoretical premises of enterprise network formation and development are related to the statements and attitudes developed in the theories of interorganisational relationship network and clusters. The discussed theories are not analysed completely, here are presented only the statements that allow best disclosing the theoretical premises of enterprise network formation and development in a region. Different definitions of enterprise network are formulated in the process of theory and conception analysis, causal coherences of enterprise network and regional development are considered.

The theoretical analysis has shown that the positive regional development can depend on interorganisational relationship, which, by increasing flexibility of territorial structure of enterprises, determine that partnership of enterprises (longterm cooperation) positively influences the development of the region when it is treated as the network of enterprises well accommodating to the needs of local community.

Keywords: network, enterprises network, interorganisational relationship, clusters, development of region.

Introduction

Tendencies of postindustrial society development change the character of economics. The longprevailed solution of regional problems, when the establishment of new economic objects and improvement of infrastructure conditions were considered the greatest contribu-tion into region's development, becomes insufficient. The development of a region can be defined by the conditions of both life quality improvement, and economy growth. The level of the development of enterprises network in a region becomes of great importance from this viewpoint. The development of enterprises network, stressing its role in a postindustrial society, growth of productivity and competitiveness, makes influence upon the economic development of different levels of regions (district, city, etc.). The network of enterprises as a new form of enterprises interaction and organisation of economic activity is the reply to globalisation tendencies, orientation to knowledge economy, development of services, and fast changes of the environment in the processes of regional development. In some territories the development of enterprises network is affected by favourable (stimulating), and in the others - by opponent (suppressive) environments; thus the conditions for development in various regions can be unequal.

From the standpoint of interorganisational relationship, the network of enterprises is treated not only as the system of enterprises. It forms on the basis of longterm relationship of partnership, cooperation among separate but related and influencing enterprises (suppliers, agents, competitors, etc.). Studies of scientific literature showed that the development of enterprises network is not theoretically and empirically analysed enough in the context of regional development; it involves wide complex of theoretical premises of interorganisational relationship.

The research goal - to distinguish basic theoretical premises, which enable the substan-tiation of the features of formation, functioning and development of enterprises network in the region from the standpoint of interorgani-sational intercourse.

Conceptual conditions of the formation and development of enterprises network, which determine peculiarities of interaction and enable answering the following research aims:

1. the networks of enterprises based formation on interorganisational relationship form;

2. differences between the networks of enterprises based on interorganisational relations and other forms of organisation of economic activity;

3. the importance of the networks of enterprises based on interorganisational relations for economical and social development of regions;

4. the definition of the network of enterprises formulation, referring to the conception of interorganisational relation network.

The research method: system, logic and comparative literature analysis of scientific conceptions.

The Networks Based formation on Interorganisational Relationship Form

Z. Simsek, M.H. Lubatkin, S.W. Floyd (2003), B.R. Barringer, J.S.Harrison (2000), O. J. Sorrensen (1996); K.G. Provan (1993), G. Thompson, J. Frances, R. Levacic, J. Mitchell (1993), E. M. Bergman, G. Maier, F. Todling (1993), H. Hakansson, J. Johanson (1989) analysed the interaction of participants of network of interorganisational relationship as well as their behaviour reasons in detail. According to them, the network of enterprises interorganisational relationship is based on the system of related enterprises of production, supply, distribution, use of goods and services. In this network the activity distribution determines interdependence of enterprises. The activity in the network is not coordinated according to the common plan formed in the hierarchy of an organisation or it is conditioned by price mechanism as in the models of free market, and it refers to partnership of enterprises.

In formation of the network of interorganisational relationship, every enterprise chooses partners in the market freely, but, wishing to find external sources of resources and possibilities for realisation of goods, it has to cooperate with other enterprises, i.e. to make contacts. In order to consolidate the relationship and to develop them, a lot of time, efforts and resources is necessary, and this does not allow simple and rapid change of partners (transactional costs). Thus every enterprise of the network directly communicates with clients, suppliers, partners, and sometimes competitors. It is evident that the position of the enterprise in the network is characterised by intensity of cooperation relationship (interaction) and the level of resource control, what determines its possibilities in the network as well as the ability to use them.

In answering the question how the networks of enterprises based on interorganisational relations form, it is necessary to single out the aspects of interadaptation of enterprises and formation of position in the network. In fact, intercourse of enterprises is reciprocal orientation of two enterprises. It means that one company is ready to cooperate with another and it believes that this party will do the same. Intercourse of cooperation forms in the process of resource exchange taking place between the partners. Partners interests are an important part of the exchange process. Lasting interrelationship can appear when the partners perceive certain complexity and heterogeneity of the exchange (G. Thompson, J. Frances, R. Levacic, J. Mitchell (1993)).

Figure. Formation of intergonisational relationship network (O.J. Sorrensen, 1996) Onetime exchange is a constituent of the formation of the interorganisational relation network of enterprise, when partners gradually develop mutual confidence. Business exchange between a supplier and a client involves the notion of social exchange too. Social exchange means that a human element is important for longterm cooperation relationship, though technical, logistics, administrative and time elements are not devalued. Exchange process is the process not only of learning but also of adaptation. The exchange usually causes a lot of problems, when partners do not fit each other, or a part of efforts are wasted for eliminating incongruities. The adaptation takes place in most levels. Enterprises can adjust to each other technically, modifying the processes of product or service providing. They can adjust in logistics, correcting the level of stock or developing common systems of delivery. Some enterprises adapt administratively, changing systems of planning or timetables. They can also adapt financially, doing payments in special ways. Finally, some enterprises adapt in the field of knowledge and information. Eventually interaction processes induce the adaptation of partners' knowledge and attitudes in respect of each other, i.e. interorientation forms. The main feature of reciprocal orientation is confidence and mutual cognition, which can involve resources, strategies and needs of partners as well as form the possibilities of the enterprise that determine the position in the network. The position defines relations of the enterprise with other enterprises; it is the result of earlier activity of the enterprise (as well as of other enterprises) and creates the basis for further development possibilities of the enterprise in the network. Referring to F. Janszen (2000), it is possible to state that position of a company depends on how the enterprise controls internal and external resources as well as it is able to turn them into products successfully. Resource control is closely related to the position of a company in the network. This means that resource control and ability to turn them into products of higher value (to give them surplus value) determines enterprise's power and position in the network, what, in its turn, influences the possibility to control resources. As time and efforts are neces-sary for consolidation of the position, and the position determines possibilities and limitations of strategic development of the enterprise in the future, it is possible to treat the position of the enterprise as partly controlled nonmaterial assets (resources) of the market.

It is possible to state that enterprises are the parts of the networks based on interorganisational relationship, which allows transforming resources into service products more effectively. The relative position that an enterprise takes in the network can provide certain advantage in respect of other interacting enterprises due to more operative access to new information or knowledge, new materials, services or better financing sources. However the network can limit the mobility of an enterprise, as network partners anticipate certain behaviour. The space of manoeuvres, which the enterprise possesses, depends on its power or influence upon the network partners. Therefore the analysis of interorganisational relationship network would involve not only the identification of partners, determination of critical parameters of their interrelationship (e.g., resource exchange, cooperation duration), but also the research of participants trust, power in respect of other participants or influence upon them.

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