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-enterprise networks have many similarities totheir European counterparts but are conceptually distinct from other types ofinterorganizational arrangements commonly found in the United States, likejoint ventures, federations, and trade associations. SME networks generallydiffer from these forms along three identifiable dimensions: purpose, interdependence,
and membership criteria. First, these networks are generally
This research was funded by a grant (number 95-215) from the Ewing Marion KauffmanFoundation Center for Entrepreneurial Leadership and by grants from the University of KentuckySmall Business Development Center and the European Science Foundation. We thank theanonymous reviewers for their insightful and constructive comments.368
1997 Human and Provan 369
created to provide a forum for direct, even joint, business activities amongmultiple network members, in addition to indirect member services. Forinstance, Florida's TeCMEN network has linked over 30 firms for joint productdevelopment, many of which were competitors in that state's electronicsindustry. The members remain independent yet work directly together for
mutual objectives. In contrast, the primary purpose of trade associations and
federations is most often to provide indirect services for their participating
firms (e.g., lobbying, promotion). Joint ventures typically pursue the objectives
of two organizations through creation of a separately managed venture,
but SME networks pursue organizational objectives through coordinated interactions
of perhaps 10, 20, or more individual firms, collectively comprising
an interorganizational network.
Second, recent U.S. small-to-medium-sized-enterprise networks promote
complex, reciprocal interdependencies (Thompson, 1967) in which
members provide inputs and receive outputs from each other. Interdependencies
are usually coordinated by the network firms themselves and a
network-level coordinator or administrative organization. A major goal of
this coordinating structure is to facilitate interaction among network member
firms. Practitioners have identified network firm interdependencies
ranging from "jointly developing solutions to common problems" to "jointly
manufacturing components, assemblies, or finished goods" (Bosworth,
1995: 2). In contrast, federations and joint ventures typically engage in
pooled interdependencies (Thompson, 1967) coordinated through administrative
structures designed to manage, in standardized ways, the pooled
activities of member firms. One network promoter differentiated networks
from trade associations, stating that the latter should change their mission
and "develop real services and do more to facilitate interactions among
members" (Coffey, 1995: 1).
Third, SME network membership criteria emphasize geographically
proximate core competencies among member firms that combine to allow
the firms to accomplish specific organizational objectives that no one member
could have accomplished individually. Members of the Kentucky Wood
Manufacturers' Network are required to have "production facilities located
in the state" so that members can work on joint production projects (Lichtenstein,
1992: 32). In contrast, joint ventures often combine core competencies
in large-firm dyadic linkages that are not necessarily geographically
proximate. Trade associations commonly focus on industry participation
rather t