Approaches to relationship development processes in inter‐firm networks

This paper examines the dynamics of business networks, that is, how these inter‐organisational networks grow and decline. Three rival theories are investigated: predetermined sequence of stages, evolution of unpredictable states and joinings theory which focus on positioning, repositioning and exit. A case study methodology was used for data collection and analysis. Data were collected from in‐depth interviews with network managers/owners of firms networking with other overseas firms entering into Australian and Asian markets. The findings revealed that inter‐firm network development is an evolution of unpredictable states rather than a predetermined sequence of irreversible stages. In turn, a six “states” model of inter‐firm network development was formulated from data. Implications for managerial practices and further research are advanced.