The influence of network governance mechanisms on the performance of small firms Online publication date: Mon, 29-Feb-2016
by Douglas Wegner; Clara Koetz
International Journal of Entrepreneurship and Small Business (IJESB), Vol. 27, No. 4, 2016
Abstract: The study examines the influence of network governance on the performance of small firms, taking into consideration the effect of the network size (small, medium or large) in this relationship. To do this, a survey was carried out on 212 firms belonging to Brazilian small-firm networks (SFNs). The results indicate that network governance influences the performance of the participating members, and that the size of the network is relevant to the choice of the most appropriate governance. In large-sized networks, the centralisation of decisions and the adoption of sanctions have negative influences on performance, whereas the adoption of incentives positively influences the performance. The theoretical contribution of this paper is the identification of a dilemma inherent to increase in the number of SFN members. The SFN should be able to define governance mechanisms that ensure the efficiency and speed of decision-making processes without neglecting the individual interests of member firms.
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