Self- and collective-interests: Using formal network activities for developing firms' business

Many inter-firm network initiatives supported by government funds are based upon the idea that benefits rise incrementally as more actors connect with each other. This paper takes the stand that self-interest and collective-interest are evident in how firms participate in network activities, and how these activities are related to the development of the network. A time-flow model is presented of firms' participation and activities in a network according to specific blends and understandings of self- and/or collective-interest. The way the network is formed also shapes managerial understanding of why firms participate in activities and how self- and collective-interests coincide. A qualitative study in the Danish food industry establishes that every firm views business network activities as important, but each engages differently in these activities. The results of this study reveal interesting patterns between self- and collective-interests for those participating in network activities and the resulting network development. A key finding of this study is the importance of a firm's ability to convert the collective-interest of joint network activities into self-interest gains for the firm. This ability is proposed as an additional network competence to those already present in the literature.