Network as a business environment: experiences from software industry

Abstract

Purpose

The aim of the paper is to describe the differences between networked and non‐networked firms' methods intended to increase profitability, methods for intended growth, implemented and intended openness development, and experiences of networking.

Design/methodology/approach

The research approach is empirical and descriptive. Data were gathered by mail survey from Finnish software producers.

Findings

Networked firms intended to improve profitability by boosting resource efficiency, while non‐networked firms concentrated on price increases. No difference occurred in firms' perceptions of their profitability. Networked firms intended to grow by mergers and acquisitions and by cooperation with partners. Non‐networked firms were eager to grow by developing new software products. Networked firms intended to increase information sharing more and were more open in sharing information concerning firms' technical competencies, cost, and commitments to other organizations. Lack of marketing resources was the most important reason for firms to join a network.

Research limitations/implications

The research setting (how the firms are classified in groups, for example) could benefit from deeper analysis of how network characteristics are connected and which variables best estimate and describe the degree of networking of a firm. A larger sample of firms should be covered to achieve generalizable results. Systematic comparison of industries would also provide essential information on network dynamics.

Originality/value

Networked firms had grown more than non‐networked firms but no connection between profitability perceptions and networking was obtained. In software industry, growth may produce networks but networking seems to support growth.

Citation

Kulmala, H.I. and Uusi‐Rauva, E. (2005), "Network as a business environment: experiences from software industry", Supply Chain Management, Vol. 10 No. 3, pp. 169-178. https://doi.org/10.1108/13598540510606223