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2014 | Global Business Towards New Paradigm in Time of Crisis | 227--240
Tytuł artykułu

Generating Innovation Through Smart Industry Network Positioning

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Networks are built on bilateral firm relationships, which are essential for the economic performance of the companies. Business relationship connections tie firms into a form of structure, where different players such as suppliers, customers, and competitors become involved and finally develop business networks (Blankenburg and Johanson, 1992; Hakansson and Snehota, eds., 1995). Therefore it is assumed that everything happens within the context of relationships, and a firm that is well established in a relevant network takes advantage of an 'insider' position, which comes along with a privileged access to market information. A firm that does not have a position in relevant networks is an "outsider", which makes it impossible to develop a competitive advantage within the network (Johanson and Mattsson, 1992; Johanson and Vahlne, 2009). Network activities, based on the firm's individual perspective of its value-added activities, are divided into vertical, horizontal, and conglomerate relationships between the firm and other entities. A network can be defined as an industrial system of organizational-interdependent relationships composed of firms indirectly and directly engaged in supply (vertical, backward-directed relationships), operations with partners but also competitors (horizontal relationships), logistics and sales (vertical, forward-directed relationships), and relationships with stakeholders such as the government (conglomerate diversification) (Gulati et al., 2000; Sydow, 2010). Firms embedded in these industrial networks are linked to each other, directly or indirectly, normally through long-lasting engagements that develop complex inter-firm information, both financial and managerial, and material procurement and distribution channels. The result is mutual interdependencies for the involved participants (Mathews, 2002; Ritter, 2000; Ritter and Gemtinden, 2003; Ritter et al., 2004). (fragment of text)
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