Network Relationships and Firm Performance An Empirical Study of Kenyan Manufacturing Firms

Abstract

Today, most organizations have limitations in terms of resources they possess internally. The tendency therefore has been to develop some external linkages that act as conduits through which they can gain access to those resources possessed by others. Networking can be viewed as the process of building long te rm contacts with the motive to have access towards information and resources (George et al., 2001). Chetty & Wilson (2003) argue that inter - firm network provide firms access to a variety of important resources and complementary skills which leads to the b uilding of specialized knowledge and achievement of economies of scale in operations and collaboration to acquire greater knowledge and capabilities. Though there are accrued benefits in regard to networking, SMEs are not motivated to seize the opportuniti es to networking (OECD 2004) There is evidence from literature that network relationships play a role in the SMEs performance. Distinct characteristics in network relationships such as structure, content and governance significantly affect the performance of small and medium enterprises.