Through an exploratory data analysis process appropriate for new phenomena (Eisenhardt, 1989) we examined both qualitative and quantitative data. Quoted material in this section comes from respondent interviews.

Network and Market Resource Exchanges

Qualitative analysis of interview data from network respondents uncovered four primary types of resources exchanged among network member firms: friendship, information, competency and business. For instance, one H-net respondent explained, "My dealing with members has not been so much for business dealings...I have had much more business with outside firms than with network members, but I can call one of the folks I’ve met through [H-net] and ask them questions I couldn’t ask anybody else." A second respondent stated, "It was just an immediate click of good ideas, and sharing information, and people saying ‘How do you do that?’ when they have a problem." In addition V-net members indicated that they "don’t sit down and relate pricing information...but as far as manufacturing products and processes...and how we differ and have different skills...we do." Another V-net member described, "There’s a certain amount of common ground [among network members], a certain amount of easy going friendship as opposed to ‘do I want to do this or are you going to cut my throat’ kind of attitude." Consequently, qualitative data indicated that network participation created a forum for members to exchange friendship, information, business and competency with other members.

We asked market firms about their exchanges with other firms in their industry. Most respondents indicated indirect interactions (e.g., referrals to other companies) but few direct resource exchanges (e.g., friendship, business, information, competency); particularly with competitors. For instance, one market respondent explained, "I am friendly with all my customers...I like to pick their brains and get ideas on new sources of materials or ideas...but I’m not friendly with competitors." A second market respondent stated, "No, I never use competitors as resources...For one thing, you can’t make any money with the mark up you have to add to their product....Also it’s a matter of quality, since their quality may be different from yours." In addition, market firms indicated they often accessed information on new technologies, for example, through traditional value chain linkages or trade publications rather than through linkages with similar firms: "We read product magazines to give us ideas...and word of mouth through salesmen....who work the whole state, so they get to know what others are doing and pass it on, so we get information on new technologies that way." Thus, qualitative data indicated that the market firms in our study had few direct resource exchanges with other firms, particularly competitors.

Following the qualitative data analysis in which we identified the four major types of resources exchanged in network arrangements, we administered a survey to the full sample of network firms. Responses across all four types of exchanges were summed to indicate the overall level of resource exchange among networks firms. Table 2 presents frequencies for resource exchanges across each of the two networks. Overall, H-net sample firms had few resource exchanges with each other prior to network involvement (total = 35; mean = 1.842 dyadic linkages per firm) and considerably more linkages after network participation (total = 136; mean = 7.158 dyadic exchanges per firm). V-net sample firms appeared to have a greater number of linkages with each other both before and since network participation than H-net, and had a smaller increase in the number of linkages resulting from network membership than H-net (totals = 79 before and 110 after; means = 3.435 before and 4.783 after).

Table 2
Resource Exchanges Among Sample Firms Before & After Network Involvement




Resource Exchanges

Before 1


































1 Counted as dyadic linkages (i.e., linkages between two firms counted as one dyadic linkage).


Network Organization Awareness

Exploratory interviews with network firms indicated that network participation had, in some cases expanded members’ awareness of their competitors. For instance, one network member explained, "I can know of competitors and know if their capabilities are good through network activities....Let’s say I have a customer that I can’t service right now...I ask myself, ‘Who could help me with this project?’ and the answer is my toughest competitor...but I only know that through my involvement with him in [the network]." A second network respondent stated, "It is interesting how you can end up forming a relationship with someone you originally thought you’d least likely hook up with. With one company--a competitor--we differed so much on how we approached things but it was differences that made it possible to work so well together...because even though we competed we also could complement each other...I worried about one thing and he worried about another." In addition, network respondents indicated that they had limited awareness of what other firms, particularly non-network firms, do as the following comment illustrates, "I’ve become more familiar with members so its easier to communicate...we seem to have the same goals and a commonality of interest that I don’t have with non-network firms, or don’t know that I have." Consequently, qualitative data indicated that network participation heightened members’ awareness of other firms in their industry.

Further, qualitative analysis indicated that the ongoing exchanges among network members also expanded members’ understanding of their own capabilities. As one network respondent explained, "It’s easy to go through your career looking through your own vision....If you can experience other people doing the same is a dose of reality and it broadens your knowledge base about yourself and others." Another network member described, "Spending time in other peoples’ shops and looking at how they do things and how I do things really helped me learn a lot about my own strengths and weaknesses." Overall, network respondents indicated that their network participation appeared to expand awareness of their own firms’ abilities and of the abilities of other similar firms in their industry.

Market respondents indicated little interest in or need for expanding their knowledge of firms in their organization field through inter-firm arrangements such as networks as this representative comment illustrates: "No, I do not belong to any trade associations....We keep getting fliers on joining some local organization for the wood industry but we have found no need to meet other firms in our industry....I may see one [competitor] at a supplier’s shop, but I don’t actively seek relationships with them." Consequently, market firms appear to use few ongoing inter-firm relationships to meet or use other similar firms in their industry.

After the qualitative interviews, the full sample of network respondents were asked questions regarding their perceptions of the other network firms both prior to and since joining the network. For instance, since qualitative analysis had suggested that firms might heighten their awareness of their competitors through network participation, we believed that obtaining an indication of respondent competitor awareness both before and since network participation would allow us to draw conclusions regarding network influence on competitor awareness versus pre-existing competitor awareness. Thus, survey respondents were asked to indicate the extent (five point scale from "no extent" to "great extent") that they perceived sample firms as competitors both before and since joining their respective networks. Figures 1 and 2 illustrate network respondents’ perceptions of competition regarding sample firms before and after network participation. Overall, H-net sample firms appeared to perceive more firms as competition after network participation than before they joined the network. V-net firms perceived little competition from sample firms before network membership and even less after network participation.

Since qualitative interviews had suggested that network firms had expanded their understanding of their own firms’ capabilities, survey respondents were also asked to indicate whether their network participation had "clarified my understanding of my own firm’s competitive capabilities" (dichotomous scale, "yes" or "no"). H-net respondents appeared to have clarified their own competitive capabilities through network participation to a greater extent than V-net firms: 74% of the H-net sample replied positively to the survey question while 39% of the V-net sample replied positively that they had clarified their own competitive capabilities as a result of network participation.

Finally, our qualitative analysis suggested that network participation had, for at least some members, changed their perceptions regarding the use of competitors as resources for their own firms. Consequently, the survey asked respondents to indicate whether (dichotomous variable) network participation had caused them to "view competitors as resources for their firm." 86% of H-net respondents indicated that their network involvement had resulted in viewing competitors as resources, while 43% of V-net respondents replied positively to that question. Thus, while firms in both networks changed their views of competition, a greater proportion of H-net members than V-net firms appeared to change their perceptions of the usefulness of competitors due to network participation.

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1997 Babson College All Rights Reserved
Last Updated 1/15/97 by Geoff Goldman & Dennis Valencia

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