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Keywords Relationship marketing, Development, International marketing, Channel members
Abstract This paper examines the dynamics of business networks, that is, how these inter-organisational networks grow and decline. Three rival theories are investigated: predetermined sequence of stages, evolution of unpredictable states and joinings theory which focus on positioning, repositioning and exit. A case study methodology was used for data collection and analysis. Data were collected from in-depth interviews with network managers/owners of firms networking with other overseas firms entering into Australian and Asian markets. The findings revealed that inter-firm network development is an evolution of unpredictable states rather than a predetermined sequence of irreversible stages. In turn, a six "states" model of inter-firm network development was formulated from data. Implications for managerial practices and further research are advanced.
Introduction
Ongoing inter-firm network relationships are increasing in importance among suppliers and their customers and have become an integral part of business-to-business operating strategies. Furthermore, academics have developed reasonably well-supported models that define many relevant variables that influence the success or failure in a relationship (Anderson and Narus, 1984, 1990; Granovetter, 1985; Morgan and Hunt, 1994; Fontenot and Wilson, 1997; Lewin and Johnston, 1997; Vlosky and Wilson, 1997). However, no generally acceptable theory of how international networks develop, has yet been presented (Anderson et al., 1994; Hakansson and Snehota, 1995) for there are several different schools of thought about inter-firm network development processes.
These major schools of thought about development change processes can be broadly classified into three categories: stages theory, states theory and joinings theory. The stages theory focuses on a progression of change processes in inter-firm network development through stages. It regards network development as an evolution and sequential progression through increases of resource commitments and interdependence (Ford, 1980; Dwyer et al., 1987). In contrast, the states theory focus on strategic moves of exchange actors which occurs in an unstructured and unpredictable manner at any point in time (Ford and Rosson, 1982; Ford et al., 1996). Finally, the joinings theory focuses on entry processes of positioning, repositioning and exit within networks (Thorelli, 1986).
The purpose of this paper is to determine which of these three approaches to change processes within a network is most appropriate and then develop a conceptual framework to examine the network...