Managing ‘collisions’ between entrepreneurial networks and industrial supply chains: a modified Penrosian perspective

Abstract

One of the most perplexing management challenges concerns the relationships between larger and smaller organisations, a typical example being the ties between a long-established corporation and a newly-established supplier firm. The paper explores contrasting ways in which the ‘focal firm’ network most commonly associated with smaller, entrepreneurial ventures engages with the characteristically vertical network morphology associated with established industrial supply chains. The central argument, which builds on the extensive literature relating to inter-organisational networks, is that empirical research in this area lacks appropriate conceptual tools to address the complex and dynamic interactions that arise from ‘collisions’ between these contrasting network types. A simple explanatory framework is introduced, which is based around an extension of the Penrosian concept of ‘productive opportunity’ (Penrose 1959, Best 2001). The framework indicates four generic interaction patterns (‘classical’ ‘centrifugal’, ‘centripetal’ and ‘collateral’), derived when the different forms of productive opportunity are coupled with the relative stability of the relevant inter-organisational relationships. The principal features of each pattern are outlined, and their dynamics are depicted in four brief, case-based cameos. The concluding section indicates possible refinements and assesses the implications for future research and practice.