The Formation Process of SME Networks

Cooperation concepts can be considered as an opportunity for small and medium-sized enterprises (SMEs) to overcome arising problems due to their size. Although the advantages of cooperations, such as cost sharing, access to new markets and increased flexibility, are well-known and discussed in literature, the realization of the concept remains challenging.

Marita Haas claims that social processes are decisive for the success of SME networks and creates a phase concept based on group theory that describes how owners of small enterprises enter into a cooperation. The framework is applied to three network formation cases in Austria, Belgium and Turkey. The author shows that group theory is a useful tool to understand and anticipate processes in networked organizations and indicates that the group formation process must be accomplished before a network will be able to create benefits.