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Managing Cooperation in Supply Network Structures and Small- or Medium-sized Enterprises outlines different approaches to the analysis of the organisation of small- or medium-sized enterprises (SMEs). Owing to the increased competition in the worldwide market, several SMEs operating in the same industrial sectors have agreed collaborative market strategies, both for raw material procurement and for final product delivery. The resulting networks, however, have a tendency to suffer from a lack of organization, which minimizes their impact on the product and labour markets, and causes a weak negotiation capacity within their supply chain.

Managing Cooperation in Supply Network Structures and Small- or Medium-sized Enterprises aims to give managers of SMEs a simple methodology that helps them to understand when and why becoming a partner in an SME network can be profitable for their enterprise. It discusses the most critical organizational problems and identifies which procedures must be known to become a collaborative member of the network.

Policy-makers, as well as managers and executives, will be able to appreciate the key issues in creating and managing healthy networks that serve global market requirements in the major industrial sectors. Managing Cooperation in Supply Network Structures and Small- or Medium-sized Enterprises enables them to evaluate the efficiency of their organization, and to estimate both the network performance and the opportunity for further development.



Chapter 1. Organization in SME Networks

Sustainable economic development is based on a foundation of innovative activity (development of new products and processes), entrepreneurship (converting innovation into economic activity), and industry clusters (networks of supporting markets, services, and skilled labor). The purpose of this chapter is to demonstrate how network organizations of small and medium sized enterprises (SME) can contribute to economic growth. It is concluded that network organizations are a very suitable form to sustain continuous business growth without losing the advantages of the high adaptability of a typical SME. A special focus will be given to a new concept, which proposes sustainable business growth in networks based on so called ‘core competence cells’. It allows an organization to flexibly adapt to changing environmental conditions, and thus promote sustainable business growth within an organizational network.
Dominik T. Matt, Peter Ohlhausen

Chapter 2. Cooperative Agreements for SME Network Organization

Present chapter provides a practical overview about the most common types of SME groupings in a number of European countries, and about the agreements established among the network’s participants, to the aim of highlighting which main cooperation aspects have to be approached in designing a new cluster, and which collaboration rules have to be stated in order to build robust collaboration and avoid conflicts. Indeed, internal conflicts developing inside a SME cluster just formed to appear as the most dangerous of the problems which could affect these organizations: they could even lead to the cluster explosion.
Agostino Villa, Teresa Taurino

Chapter 3. Collaboration Analysis for SME Networks

This chapter presents two complementary points of view on collaboration analysis, applied to SME networks. The overall objective is to help managers in detecting interesting collaboration opportunities. The analysis is made further more complex because the source of data is by necessity, indirect (it is not possible to ask the enterprises if they actually cooperate or only fake cooperation). Despite the difficulty, many techniques were found to indirectly assess the presence and the amount of collaboration in a network. A first analysis, at a strategic level (based on criteria of competence similarities and activity complementarity) it is complemented by a more operative point of view (analysis of production links among potential partners).
D. Antonelli, X. Boucher, P. Burlat

Chapter 4. SME Networks and Clusters: An Approach for Their Performance Evaluation

By analyzing public data on more than 120 SME clusters from 11 different countries of Europe, the CODESNET project got some interesting information, sometime unexpected and sometime foreseeable. Among them, about 50% of the analyzed clusters show a clear division of labor among the partners but only one-third can afford a dedicated ICT support; another 50% show a high improvement potential and can be found in the middle success category; there can be found different categories of clusters: on the one hand a network can be agglomerated in a relatively narrow area (rural district, county); on the other hand a network can consist of firms with a dilatation over a whole nation or (but rarely) over Europe. These types of information revealed to be of real utility for managers of SME clusters and supply chains. So, in developing the project, it was necessary to introduce a standardized format for describing the main characters of the analyzed industrial bodies, by using public data. This chapter aims to give a description of that standard format for data collection and storage, and the conceptual model of SME cluster by which said format has been derived. Any data repository, indeed, cannot be really used for any evaluation if a clear model of the systems from which data are extracted, has clearly stated in advance.
Agostino Villa, Teresa Taurino

Chapter 5. Supply Network Structures and SMEs: Evidence from the International Clothing Industry

Many different types of supply networks have been discussed in the literature. However, their relevance for SMEs has not been discussed in detail. This chapter briefly reviews supply network typologies and their relevance for SMEs. Analysis is presented of supply networks in the international clothing industry that has emerged over the last three decades to supply garments to global markets. Such networks include highly powerful entities such as major retailers as well as many smaller players. They operate with different structures and different operational strategies, and practices. The chapter considers the operation of these networks and their implication for SMEs. Sri Lankan clothing manufacturers operating within retail-driven international supply networks are described. The role of SMEs and how they collaborate with larger players in these dynamic networks are discussed. The chapter concludes with policy implications for government authorities and the business community. Important research directions are highlighted for the academic community.
B. L. MacCarthy, P. G. S. A. Jayarathne


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