NETWORKS AND PARTNERSHIPS: MANAGING CHANGE AND COMPETITION

INTRODUCTION Companies operating in international markets have been told that innovation lies at the heart of success and that they should establish early warning systems to help them see the signals of change (Porter, 1990). At the global level, technological developments and competitive conditions have been seen as ‘increasing pressure on firms to co‐operate along and between value‐added chains’ (Dunning, 1993). However, does this apply only to multinational enterprises competing in world markets? In the early 1990s many small firms in London were also under pressure; they were often in industries characterized by significant technical changes, to which managers had responded by introducing technical developments into their own firms. They had often been severely constrained in their attempts to achieve their business objectives by difficult competitive conditions, notably the poor growth of market demand and the increasing intensity of competition. Of course, businesses everywhere have always faced changes in their competitive environments and it is the responsibility of management to make appropriate responses to these changes. However, firms vary in their ability to identify and understand the competitive environment and in their ability to mobilize and manage the resources needed for a successful response (Pettigrew and Whipp, 1993).