What do young international ventures need to know about their networks?
This study examines how networks change over time for new ventures serving international markets. It draws on case research to develop propositions regarding the:
- types of change the network will experience,
- characteristics of these changes, and
- their impact on the young firm.
What you need to know:
Young technology firms serving international markets will see many changes to their network as their firm grows. These firms should seek to become more influential within their networks to increase their power base. They should actively grow their network in terms of size and diversity, and proactively identify which new connections are best suited to expand business opportunities.
What did the researchers do?
Nicole Coviello, a business professor with the Lazaridis School of Business & Economics, asked: During the conception, commercialization and growth phases of an international new venture, how does the firm͛s network change in terms of its structure and interactions? To answer this, Coviello conducted in-depth case research on three technology start-ups serving international markets. Network characteristics were identified over each life cycle stage and assessed for how the changes impacted the firm.
What did the researchers find?
Based on this research, Coviello suggests that in the early stages of growth, a new firm͛s network will grow in size and range. It will also ͚loosen͛ in terms of density and constraints. Although the firm is likely to maintain close relationships with early connections it will also become more central within the network. This means it can act as a bridge, connecting other people and organizations.
A key outcome of this research is that network relationships are intangible resources that can be managed for firm growth. They are relevant as early as conception. Predicting what a network will do or how it will grow is difficult because it is built on unique relationships. However, proactive network management together with tapping into existing contacts can help overcome a new firm͛s lack of reputation. This also provides better access to resources and other international opportunities.
How can you use this research?
Young international firms can use this research to focus on expanding the variety and diversity of their network relationships rather than the quality of any individual connection. They can focus marketing efforts on collaborative events to build their network, facilitate new connections, and identify where to connect others.
Want to know more?
Contact Nicole Coviello
Article citation: Coviello, Nicole E., (2006) The network dynamics of international new ventures. Journal of International Business Studies, 37, pp. 713-731.