Networks: A Route to Improving Performance in Manufacturing SMEs

Abstract

Perceived as important contributors to economic growth, network and cluster groups are currently receiving much attention. The same may be said of SM Es. But practical and theoretical perspectives indicate that SMEs, and particularly the owner-managers, place little value on networks and have only limited networking resources. Consequently, they do not access networks that could help their development and growth. This paper presents some of the current theoretical concepts and practitioner findings on networks. The implications are that, to be effective, networks need to be thoughtfully managed by a neutral third party, and that clear distinctions need to be drawn between learning networks, commercial alliances and social networks, but that all three types yield considerable competitive advantage to those businesses willing to engage. Empirical evidence suggests that with careful, yet intensive network management measurable organizational innovation and development are attainable by those SMEs willing to participate in network groups.