The Formation Process of SME Networks

Virtual Organizations (VOs) and other forms of cooperation among firms are gaining popularity in particular among SMEs as a way to strengthen their position in an era of global competition. Consequently, public institutions at the regional, national and supranational level like the European Union are actively promoting and supporting the formation of networks and virtual organizations. But despite all the efforts spent on promoting cooperation and the numerous projects aimed at supporting the development of virtual organizations, our understanding of the success factors for the development of VOs is still rather limited. While the ultimate goal of virtual organizations is to improve economic performance, economic factors alone are not sufficient to explain success or failure in establishing a VO. In her thesis, Marita Haas has introduced a new perspective on the formation process of virtual organizations by interpreting the formation of a virtual organization as a group development process between the key actors in each participating company. This person-centered approach is particularly valid when considering SMEs, which in many cases are strongly influenced by the personality of the founder. Applying phase models from small group research enables Marita Haas to identify critical phases and transitions in the formation process and develop adequate intervention strategies to support the VO members in their efforts.