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INTERFIRM NETWORKS AND ORGANIZATIONAL PERFORMANCE: A THEORITICAL REVIEW

Volume: 67  ,  Issue: 1 , December    Published Date: 08 January 2021
Publisher Name: IJRP
Views: 54  ,  Download: 32
DOI: 10.47119/IJRP1006711220201620

Authors

# Author Name
1 Mogaka, Douglas M
2 Dr. Muchemi, Anne W

Abstract

The performance of firms globally is threatened by the dynamic business environment thus shifting competition from individual firms to networks of different firms. Recently, there is increased interest in the concept of inter-firm network as a viable strategy for survival and enhancing performance of organizations in such a competitive environment. In this strategy, different organizations cooperate in terms of research and development, business collaborations, virtual cooperation, knowledge base and social networking. Inter-firm collaboration is undertaken for a number of reasons which include sharing of know-how, joint action, building technological capacities, taking advantage of local marketing skills, decentralizing to be closer to local markets, building user-supplier networks, and taking advantage of knowledge spillovers from location-based proximity. It has been proposed that the adoption of this strategy by different organizations enables them gain competitive advantage because it has a positive impact on their market share and organizations also leverage on technology; thus producing a positive effect on their performance. However, extant theoretical and empirical literature is inconclusive on how to conceptualize interfirm networks, its dimensionality and measurement. Few studies, if any, have examined the role played by competitive advantage and legal framework in mediating and moderating the relationship between interfirm networks and organizational performance, respectively. Consequently, this study was conducted with the objectives of reviewing, conceptualizing and examining conceptual, empirical and theoretical literature; identifying theoretical and methodological gaps, and finally, proposing a conceptual model that would demonstrate the relationship between interfirm networks and organizational performance. Relevant theories underpinning the study were analyzed, various constructs and their operational indicators identified and compared against existing empirical work. The paper finally proposed that there is need to conduct an empirical study based on the proposed theoretical model to contribute to the advancement of knowledge in this area.