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The study this chapter reports focuses on how network theory contributes to the understanding of the internationalization process of SMEs and measures the effect of network capability on performance in international trade and has three research objectives.

The first objective of the study relates to providing new insights into the international market development activities through the application of a network perspective. The chapter reviews the international business literature to ascertain the development of thought, the research gaps, and the shortcomings. This review shows that the network perspective is a useful and popular theoretical domain that researchers can use to understand international activities, particularly of small, high technology, resource-constrained firms.

The second research objective is to gain a deeper understanding of network capability. This chapter presents a model for the impact of network capability on international performance by building on the emerging literature on the dynamic capabilities view of the firm. The model conceptualizes network capability in terms of network characteristics, network operation, and network resources. Network characteristics comprise strong and weak ties (operationalized as foreign-market entry modes), relational capability, and the level of trust between partners. Network operation focuses on network initiation, network coordination, and network learning capabilities. Network resources comprise network human-capital resources, synergy-sensitive resources (resource combinations within the network), and information sharing within the network.

The third research objective is to determine the impact of networking capability on the international performance of SMEs. The study analyzes 11 hypotheses through structural equations modeling using LISREL. The hypotheses relate to strong and weak ties, the relative strength of strong ties over weak ties, and each of the eight remaining constructs of networking capability in the study. The research conducts a cross-sectional study by using a sample of SMEs drawn from the telecommunications industry in Ireland.

The study supports the hypothesis that strong ties are more influential on international performance than weak ties. Similarly, network coordination and human-capital resources have a positive and significant association with international performance. Strong ties, weak ties, trust, network initiation, synergy-sensitive resources, relational capability, network learning, and information sharing do not have a significant association with international performance. The results of this study are strong (R2=0.63 for performance as the outcome) and provide a number of interesting insights into the relations between collaboration or networking capability and performance.

This study provides managers and policy makers with an improved understanding of the contingent effects of networks to highlight situations where networks might have limited, zero, or even negative effects on business outcomes. The study cautions against the tendency to interpret networks as universally beneficial to business development and performance outcomes.

This chapter examines three kinds of relational bonds (trust-based commitments, forbearance-based commitments, and apprehension-based commitments) on which parties rely in the processes employed in negotiating, committing, and executing their cooperative inter-organizational relationships (CIORs). It also considers three different societal contexts with strong, moderately strong, and weak exogenous governance safeguards in which these relational bonds are employed. The authors propose a process theory of relational bonds that fit different contexts. Specifically, our central proposition is that parties to CIORs are more likely to achieve their goals when they rely on relational bonds that fit their societal contexts in which they engage in economic exchanges.

Middle leaders are educators whose practices of building relational trust are critical for generating the kind of strong and sustainable professional learning communities necessary for leading productive site-based education development in their school. This chapter specifically focuses how building an ethic of relational trust, experienced in five interrelated dimensions, aligns with establishing core foundational conditions for building community. Building trust and communities of professional learners are not mutually exclusive – in fact, each reciprocally facilitates, progresses, supports, and sustains the development of the other. The foundations for community building, described as cornerstones, form over time and progressively involve, and achieve, contextuality, commitment, communication, collaboration, criticality, and collegiality. Reflection questions are provided throughout; these are designed to directly focus the attention of middle leaders towards understanding and developing their own trust practices, that with time, create conditions for generating strong viable communities of professional practice.

Purpose – This study attempts to explore further the relation between performance information and trust as the main control levers in inter-firm transactional relationships.

Design/methodology/approach – After discussing the interaction between information and trust from different theoretical perspectives, the study examines the case of a multinational company working in the pharmaceutical industry. Material has been collected through interviews with managers and documental analyses, focusing on the relations between the company and its partner suppliers.

Findings – A theoretical systematisation is provided, distinguishing three main perspectives: (1) the transactional perspective, strictly derived from transaction cost economics assumptions, which denies any role to trust; (2) the relational perspective, which, in examining inter-firm trust, assumes similarities with inter-personal trust; (3) the institutional perspective, which, based on the sociological distinction of “trust in abstract systems” and “trust in persons”, is intended to identify institutional factors explaining management accounting changes. Case discussion shows that the institutional propositions fit the empirical evidence better, for both trust in persons and in systems are important as control levers, but their relevance differs along the value chain: while trust in persons is more relevant in the less-programmable phases, trust in systems is more developed in the more programmable one.

Research implications – The paper contributes to the literature on inter-organisational control by providing more insights into the interaction between information and trust as control levers.

Originality/value – The focus on value chain phases enables us to analyse how different control patterns or archetypes can be co-present in a given relationship.

Purpose – This study focuses on the relationship between local governments and public sector joint ventures (JVs). Public sector JVs are separate administrative entities that undertake public service activities on behalf of local governments. The aim of this study is to examine the vertical management control packages that are used by local governments to control the relationship with their public sector JVs.

Design/methodology/approach – Two case studies have been conducted in two public sector JVs, owned jointly by more than 20 local governments. The analysis of the two cases is informed by an integrated conceptual framework describing how transactional and relational factors influence control, trust, and risk in the context of public sector JVs.

Findings – The case studies provide a nuanced understanding of the interplay between the vertical management control packages, trust between the parents and the public sector JVs, and risks as perceived by the local governments. The case findings not only reveal how local governments struggle with adequate outcome control but also highlight how and why they rely on behavioral control. A related finding is that while the probability of poor business performance does not have a significant impact on the design of the vertical control packages, the social impact of failure has the potential to create a sense of urgency with regard to changes in the design of vertical management control packages.

Originality/value – This study adds to the literature on interorganizational relationships by providing insight into the use of vertical management control packages in the specific, but relevant, setting of public sector JVs.

The emphasis on inter-organizational systems gave rise to concerns about inter-organizational relationships as trading partners became aware of the socio-political factors and trust that affect their relationships. This paper examines the importance of inter-organizational-trust in business-to-business E-commerce organizations. It examines how inter-organizational relationships impact trading partner trust, perceived benefits, perceived risks, and technology trust mechanisms in E-commerce that can in turn influence outcomes of business-to-business E-commerce. This paper develops a conceptual model and tests the model using a case study research methodology. The aim is to solicit qualitative in depth understanding of inter-organizational-trust in business-to-business E-commerce. Eight organizations from a cross section of industries that formed four bi-directional dyads participated in the third stage of this study. The first two stages include exploratory case studies in three organizations in the automotive industry that applied EDI via Value-Added-Networks in 1997, and a nationwide survey of organizations that examined the extent of E-commerce adoption in Australia and New Zealand in 1998. The findings identify the need for trustworthy business relationships in an E-commerce environment.

The purpose of this chapter is to develop the idea of enhancing collaboration within a public context. It does so by exploring the challenge of working with others across organisational boundaries, when addressing complex issues. It discusses research findings from a Scotland based public service study concerned with collaborative practice and presents an empirical analysis of what it means to work in a relational way. The existing literature is reviewed alongside the study findings, connecting with contemporary theories and debates in the fields of collaboration, leadership and public administration.

The empirical work detailed in this chapter drew from collective and relational leadership theories which influenced the study design and methodological approach. The data collection method took the form of semi-structured interviews and data were analysed using thematic analysis supported by data mapping exercises. Data were obtained through interviews of 20 participants from multiple public service roles and organisations who were involved in similar activities linked to collaboration.

This chapter promotes an approach where disrupting traditional collaborative practice offers new insights in terms of (1) understanding the group process and (2) recognising what processual and behavioural adjustments can be made to enrich collaborative work. This approach was found to offer a number of benefits linked to building trust, promoting meaningful dialogue and altered the conversations that people chose to have.

The reconceptualisation of collaboration specifically illustrates what it means to ‘work in a more relational way’ and how it is understood by those attempting to build collaborative capacity, sustain public services and improve outcomes for citizens and communities. As such, it is this focus on relationships that is considered innovative and important to creating the open collaborative culture required for addressing complex issues and working across organisational boundaries.

Purpose – This chapter explores the determinants of trust, a manifestation of the relational dimension of social capital, between interaction partners in multinational corporations at interpersonal and inter-unit levels of analysis.

Methodology – The study is based on two quantitative data sets from the Finnish subsidiaries of foreign MNCs, one at the individual level and another at the unit level (n= 265/102).

Findings – Our results indicate that the drivers of trust exhibit similar patterns across both levels of analysis, but are stronger at the interpersonal level. Trust was significantly and positively related to the length of the relationship between the two individuals or units, and to the frequency of the communication between them whereas it was found to be unrelated with cultural distance.

Limitations – The key limitations of the study were as follows. First, the samples at both levels were relatively small, a factor that may partly explain why some of the statistical relationships were relatively weak. Second, the study was carried out in one location only, and our findings need to be corroborated in other cultural settings. Third, we only examined the level of trust from one side of the relationship, as a dyadic analysis was not possible with the present data.

Practical implications – For practicing managers, the main message from our research is that communication frequency and the length of the relationship matter for the relational social capital that exists within MNCs – both at the interpersonal and unit levels.