Managerial implications

As industry rapidly moves toward a networked economy, cooperation among individual firms involved in overlapping network relationships is critical for success (Achrol and Kotler, 1999). Managing these diverse relationships allows networked firms to respond to environmental opportunities with a minimum of stress (Wilkinson and Young, 1994). Unfortunately, the literature on this topic is under-developed. Firms used to the competitive paradigm need guidance on the incorporation of cooperative strategies into their internal operating procedures, as well as their external relationships. The model developed in this study is an important step in this direction by clearly delineating the principal factors that may influence the decision to adopt innovations across a broad range of variables.

The study draws the manager's attention to inter-organizational influence factors as well as relational factors under their direct control. In addition, strategies for dealing with structural factors, over which they have little control, are presented. Importantly, the effect of these variables on adoption has been modified from the perspective of an individual firm or dyad, to the more complex situation encountered in networks. Further, the study focuses on "soft side" or social variables that appear to be critical in encouraging cooperation in the absence of bureaucratic governance mechanisms, since these are fundamentally absent from network relationships. These variables feature open communication prominently as a means of building trust and allowing participation. Open communication also builds social ties and generates social capital to facilitate cooperation and empower champions.

In dealing with these factors, it appears that firms must first establish a supporting organizational culture, since it seems implausible that firms can act cooperatively in their inter-organizational encounters and bureaucratically in their intra-organizational relationships. Specifically, firms must establish good internal lines of communication that rely on encouraging employees to work cooperatively toward mutually beneficial goals and build strong internal relationships among departments and their employees.

The model also suggests some context specific factors affecting the network adoption process, specifically size of firms.

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