INTRODUCTION

Background and objectives of the study

In the 1990's, a great number of business firms in many industries have entered into a variety of cooperative interfirm relationships to conduct their business deals. Due to increasing empirical examples, a fair amount of research has also been carried out concerning interfirm cooperation, but the emphasis has been on the relationships between large and small firms, and fairly little evidence is available concerning the relationships between SMEs. It is, however, very misleading to forget the special characteristics of small firms and to apply the same procedures to both large and small firms (see e.g., Volery, 1995; Fletcher, 1993; Van Gils & Zwart, 1992). One clear drawback is also the lack of longitudinal studies in this field (see e.g. Borch & Arthur, 1995; Pettersen, 1993; Bronder & Pritzi, 1992; Ring & Van de Ven, 1992; Hamel, 1991; Niederkofler, 1991; Parkhe, 1991). Cross-sectional studies, that have been favoured, ignore the significance of a definite time point, and assume that interfirm cooperation can be measured at any chosen point of time without causing any bias to the results. There has also been a great deal of general theorizing about the motives, benefits and problems of interfirm cooperation, but we know relatively little about how interfirm cooperation in SMEs develops as a holistic process (see e.g., Pettersen, 1993).

Research has also been done before concerning the development phases of interfirm cooperation, but in such studies the development process has mostly been divided into four or five different phases, which are visible outside a net as well (see e.g. Bronder & Pritzi, 1992; Lorange & Roos, 1992; Butler & Hansen, 1991; Devlin & Bleackley, 1988). The present study on the other hand strives to clarify the internal processes or adaptation processes of a net that have to be gone through before the net can proceed in its development (see Johanson & Mattsson, 1987). Moreover, most of the other development studies have focused on the initiation phases and they have paid less attention to the implementation and mature phases of interfirm cooperation (see also Hovi, 1995; Ring & Van de Ven, 1994; Parkhe, 1991). The assumption has been that the development process will end after the partners have signed a contract or that no changes will occur in the implementation phase. This is a paradox, because a great deal of empirical evidence proves that the real test of cooperation will be experienced in the implementation phase. All in all, this study for its own part tries to fill these above-mentioned gaps by adopting a longitudinal and holistic approach to studying the internal processes of SME cooperation by focusing particularly on the phases after signing an agreement.

The main objective of this study is to create propositions about typical paths of the development process of interfirm cooperation based on empirical evidence. The purpose of the theoretical part is to clarify those different dimensions that have to be analysed in order to achieve a holistic view of interfirm cooperation. In the empirical part the aim is to find out what role these different dimensions play in the development process, what obstacles partners have to overcome to proceed in development, and what are the reasons for possible failures in intensifying the cooperation. One secondary objective is also to compare the development process between 'more successful' and 'less successful' nets. This is because there is so little understanding concerning successful processes (see e.g., Mohr & Spekman, 1994).

Definitions

It is a very well known fact that the definitions of concepts in the field of interfirm cooperation vary a great deal. In this study the term interfirm cooperation is used as a kind of superordinate concept of formal, long-term activity between independent firms, which is based on some agreement or on the formation of a separate joint venture. Thus, interfirm cooperation means more than just personal relationships between entrepreneurs, and normal buyer-seller relationships are excluded. Correspondingly, nets are certain cooperative groups, i.e., parts of a wider network which may consist of firms with vertical and/or horizontal relationships (see Hagg & Johanson, 1983) and whose member firms have a common interest and together seek some means to achieve a higher level of performance by using a multilateral group design.

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Last Updated 5/1/97 by Jo Ann Mathieu

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