Are inter-firm networks really worth it?

Abstract

Company networks represent the coordinating organisational form between the hierarchical structure of the conventional enterprise and the market. Company networks are to be understood as an answer to the development trends of the environment of the enterprise, particularly to increasing competition on the relevant dynamic markets. The goal of this paper is to supply evidence of their efficiency on the basis of an analysis of regional networks in the field of tourism, as shown by the mountain cable car companies in the region of Oberengadin/St. Moritz in Switzerland. The positive impact of this network cooperation is more evident amongst the group of small and medium enterprises (SME) operating cable/railways in the region than in larger enterprises. The SME which cooperated in networks generated an advantage of 15-20 % as regards revenues and approximately 20 % as regards long-term fixed assets. For the group of companies with revenues exceeding five million CHF, however, the cooperation did not bring about the benefits expected.