The role of network organizational model for SMEs development

International Journal of Research and Innovation in Applied Science (IJRIAS) | Volume V, Issue XII, December 2020 | ISSN 2454–6186

The role of network organizational model for SMEs development 

Assoc. Prof. Dr. Le Nguyen Doan Khoi
Department of Scientific Research Affairs, Can Tho University

Abstract

This paper aimed to analyse the evolutionary courses taken by small and medium enterprises (SMEs) in response to environmental changes still ongoing. The survey was carried out by administering a semi-structured questionnaire. Various aspects related to firm management and organisation were investigated and special attention was paid to the management of inter-organisational relations and knowledge. Our preliminary results showed a scenario of intense relations between firms but scarce pooling and exchange of knowledge and expertise. This is also reflected in the low level of endowment encountered in Information and Communication Technology (ICT) systems and applications.

Key words: networking, SMEs, ICT

1. Introduction

The radical changes that have occurred in the competitive in recent years have driven firms to seek new development pathways able to cope with the growing complexity of the business environment and ensure access to new sources of competitive advantage. The survival and development of enterprises, regardless of size, is possible only if they are able to recognise changes under way, predict those that will be produced and respond appropriately.

The recent literature and business practice have shown that firms have developed new organisational models with a high degree of operational and decisional flexibility and considerable organisational disintegration. The organisational models emerging fall into three main categories: Virtual Enterprise (VE), Extended Enterprise (EE) and Cluster (CL). Despite the differences characterising such models, they represent a possible response to the greater complexity and instability of the business environment.
This paper is part of a broader research project which aims to analyse the evolutionary courses taken by small and medium enterprises (SMEs) in response to environmental changes still ongoing. Various aspects related to firm management and organisation were investigated and special attention was paid to the management of inter-organisational relations and knowledge. Our preliminary results showed a scenario of intense relations between firms but scarce pooling and exchange of knowledge and expertise. This is also reflected in the low level of endowment encountered in Information and Communication Technology (ICT) systems and applications.

2. Literature review

Faced with this scenario, firms have had to implement far-reaching renewal processes based chiefly on two elements: on the one hand, the need to acquire a flexible and elastic organisational structure able to adapt swiftly to changes under way; on the other, to acquire tools to manage and transfer knowledge such as ICT. The Internet and technology generally termed e-business technologies offer firms new possibilities for collaboration, access to and sharing of information and knowledge, but above all allow firms to manage relations along the supply-chain effectively and efficiently.

All this has been translated into the emergence of new organisational paradigms which go beyond the confines of the traditional firm and that adapt better to the new competitive scenario. The technical debate on the development pathways of firms has shown two emerging organisational models known as VE and EE. The recent literature has also reappraised the conceptual category of the CL.

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