The Networking Company

Abstract

Past research has consistently shown that companies have business and nonbusiness, formal and informal relationships with other actors. With focus on product and process development activities, empirical studies have shown the importance of collaboration with, for example, customers, suppliers, research institutions, and competitors. Research also has highlighted that a company's various relationships are interconnected with each other. But why and how are these firms able to build up and use networks of relationships that give them a competitive advantage? I postulate that a particular skill can be identified and described that allows companies to handle, use, and exploit single relationships and whole networks. The new construct “network competence” is measured by assessing a company's degree of network management qualifications and execution of network management tasks. Drawing upon a sample of 308 German mechanical and electrical engineering companies, I show in the analysis that the four organizational antecedents: availability of resources, network orientation of human resource management, integration of intraorganizational communication, and openness of corporate culture account for the development and establishment of network competence within the networking company.