Managing Networks: A Refection of Corporate Strategy

Logically it seems that companies pursuing different business strategies would also manage their relationships with other firms accordingly. Nevertheless, due to the lack of research in the field of network strategies, this link still remains inadequately examined. Based on the well-known framework of organisational behaviour developed by Miles and Snow (1978), this paper argues that the patterns of network behaviour practiced by firms greatly depend on the business typology of the company. That is, a company's business typology will to a certain degree dictate the network identity of the company. In this paper evidence is provided, that the relation between a company's strategy, structure and processes in fact have a considerable influence on its pattern of network behaviour. Three case studies from the Danish biotech industry exemplify and illustrate how a company's strategy is directly correlated with how it manages its strategic network relations, which consequently affects its network identity (Eisenhardt1999). It is argued in this paper that the level of relational embeddedness, incentives for establishing strategic relations and the relation between the number of non-redundant and redundant relations are the most dominant elements distinguishing the types of network behaviour in relation to the business typology.The paper thus strives to argue how different business typologies develop a network identity on the basis of their network behaviour. Due to the correlation between a company's strategy, structure and processes and its pattern of network behaviour, knowing how to manage this relation becomes essential, especially during the development of new strategies.