Based on the theory of habitual domain, the purpose of this paper is to explore inter‐firm networks' mechanisms for coping with environmental change and for assisting firms to adapt to their collaborative networks. Business globalization is driving more and more individual firms to form inter‐firm collaborative networks. These networks need to develop new types of strategic capability in order not only to adopt a robust business process that will achieve high efficiency, but also to develop a network system for responding to external environmental changes.
With insights gained from the case study, the paper develops an analytical framework for deconstructing the network behavioral changes based on the network habitual domain concept and discusses the dual roles of the network‐based habitual domain in network behavioral changes.
This paper demonstrates how a Chinese telecommunications service company and its inter‐firm network became the market leader in one of the provincial capital cities in China within six years.
From an endogenous perspective, this paper contributes some useful concepts that may assist both academia and managers to identify network‐based habitual domains, improve the domains continuously, enhance their response capabilities, and formulate appropriate strategies according to the competition's requirements.
