Based on the empirical findings there seem to be two different paths through which successful interfirm cooperation can be reached: through the socio-psychological dimension or through the strategic dimension. The first route can be called the trust-path. In this model a net is formed between firms which have earlier cooperated at some level and whose owner-managers knew each other beforehand very well. This kind of point of departure brings about a positive 'snow-ball effect', i.e., trust and commitment are very high right from the beginning, partners are ready for remarkable investments and high intensity of cooperative efforts, and this in turn makes them more and more committed to a cooperative venture. Naturally these aspects of socio-psychological dimensions do not alone guarantee success, there has to be a demand for the business idea. But usually great familiarity between partner firms, considerable inputs and high intensity of joint efforts do contribute to developing a workable business concept. If the outcomes are promising, commitment will increase all the time and partners are eager to invest more and more and make adaptations for cooperation, e.g., by buying new special machinery - in this way the 'snow-ball effect' continues. Formality is usually a consequence of the intensity of cooperative efforts in this path. The other path of success is more strategic in its original character. In this strategically oriented path, cooperative partners do not necessarily have prior relationships, but their resources and skills are highly complementary and by combining their skills they are quite easily able to create a new product. In this path the functioning business-idea is from the very beginning more important than in the former or trust-path, i.e., results have to be achieved much faster in this path. Compared to the trust-path this path is, however, more vulnerable, because the socio-psychological dimension has not developed in the same degree. This means that the latter path does not stand declines in results so well.

In unsuccessful nets the development process proceeds in the 'wrong' direction, i.e., the enthusiasm is at its highest in the beginning when expectations are still high. The negative path proceeds like a negative 'snow-ball phenomenon'. It originates from partners not knowing each other well or then in their prior relationships there have been some conflicts, and due to these the partners do not trust each other and are not ready for big investments and high commitment. The intensity of cooperative efforts remain low, and probably also the internal division of work is unsatisfactory because of poor familiarity with the partners, their resources and skills. It is typical of this kind of development path that the partners are maybe eager in the beginning (although in the first case the attitude towards the cooperation in question was quite skeptical almost from the very beginning) but when outcomes are long in coming or are not shared equally, the enthusiasm dies gradually down, and after that partners are prone to invest less and less, and this in turn commits partners more and more weakly to cooperation; they stop communicating, and after that it is impossible to bring anything about. In this path the reason for starting cooperation is usually an external factor, e.g., public support. All in all, it seems that prior relationships of partners have an enormous impact on later cooperation. Quite often the development process also proceeds either along a negative or positive 'snow-ball effect' path, i.e. some positive factor confirms also other positive factors, while some negative factor confirms other negative factors.

To summarize, the following propositions can be formulated on the basis of the empirical findings of the present study.

1. The successful development path proceeds like a positive 'snow-ball phenomenon' while the unsuccessful development path proceeds like a negative 'snow-ball phenomenon', i.e. a certain decisive incident or factor brings about a series of other consequences (either positive or negative). For instance, after stumbling into a negative path it is quite difficult to get out and change to a positive one.

2. It is quite easy to proceed in the formation and configuration phase due to early enthusiasm, but the real test of cooperation will be experienced in the implementation phase.

3. Intensifying interfirm cooperation in regard to three dimensions and their variables after starting cooperation is extremely difficult; surprisingly often the development process gets on the wrong track.

4. Those cooperative groups that have originated from an external push require more early results to maintain commitment and enthusiasm than those groups that have originated from the entrepreneurs themselves; moreover those originated from an external push are not very easily ready for any repairing investments.

5. Especially the socio-psychological dimension but also the strategic dimension play very important roles in the development process, while the network management dimension does not by any means play an equally important role.

6. The nature of prior relationships of partners plays an important role in regard to the subsequent development path.

Implications for practitioners

This study proves that the advantages of interfirm cooperation are not always so indisputable. On the contrary, the results may also be quite weak. For entrepreneurs themselves, who usually are the actors in different nets, this study provides many implications. Firstly, they should understand that interfirm cooperation, like normal business, also requires a lot of effort to succeed. Without investment and commitment, no results can be achieved. In order to preserve their enthusiasm the entrepreneurs should constantly move on even if only by little steps so that they will notice that something tangible is happening all the time. Too much delay is sure to kill eagerness. To the promoters/authorities this study is not very flattering either; they have very little opportunity to influence the development process after the cooperation has started. On the basis of this study the nets that originated from outsiders have a much weaker foundation than those that originated from the entrepreneurs themselves. The promoters should be extremely well aware of different factors that can affect the development process, before they can contribute to cooperation of certain groups. Public promoters can mainly contribute by finding and evaluating suitable partners and clarifying the economic conditions of single partner candidates, because the promoters' chances for subsequent influence are quite minimal.

The clear implication of the present study is that the most desirable but also the most demanding task for promoters in the future is attitude training of entrepreneurs in order to increase entrepreneurs' readiness for networking as a natural way of operating. Entrepreneurs should be made to understand the value and benefits of networking by themselves so that they will 'voluntarily' create different cooperative structures which do not always have to be such formal. At least in Finland entrepreneurs still prefer go-it-alone actions to networking and they want to avoid networking as far as possible. Attitude training is, however, a demanding, long process; it takes years to bring anything about.

FIGURE 1 (Not available)

Research setting

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Last Updated 5/1/97 by Jo Ann Mathieu

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