Network Partner Selection and Acquisition Process

The partner acquisition and evolution process in this network is “initiated through the top management” (US1) and informed by competitor intelligence (Section 4.2.1). The awareness and acknowledgement of the benefits of cooperation were the original gateway for forming the network: “Thereby, you knew each other and some day we just said, yes, we should work together, because it makes sense” (TK1); “the idea came up that one partner by itself would of course not be as powerful as all of us together” (NV1). The directors and strategic personnel (e.g., head of marketing) carried out informal networking activities over a period of two years prior to formal network formation (TK1, JW1, HG1, and NV1). This study suggests that the initial weak ties among the competitors facilitated information sharing about various opportunities, which in turn enabled cooperation. Following this, informal networking activities among the active networkers—who valued the potential cooperation opportunities that could be gained through common perspectives and needs—enabled the development of personal relationships between the top management (directors) of organisations. The network formation in this case supports the assumption that entrepreneurial networks are embedded in personal relationships (Kilduff and Tsai 2003), albeit these personal relationships in this study were developed rather than

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existed for exploitation. Subsequently, the preliminary and informal cooperative networking activities developed into a formal structure:

“In the beginning, we displayed their flyers and they displayed ours. This was

sort of an extension of what we did anyway; we just said ‘we will simply use this larger region’. Yeah, so that developed itself more and more, and this has already been in place for two years now” (TK1).

This kind of pre-network activity is not sufficiently discussed or conceptualised in the literature according to Kilduff and Tsai (2003). Huggins (2000) argues that the most successful form of formal business network is facilitated by an initially informal structure. Similarly, Möller and Svahn (2003) find unintentional networking to be a precondition for network development activities. These serendipitous network processes and interactions enable network members to find common ground, from which goal-directed processes and a shared identity can be developed (Kilduff and Tsai, 2003; Provan and Kenis, 2008; Salancik, 1995), which lessens the network internal cooperation-competition tension proposed by Das and Teng (2000). Whereas Salancik (1995) considers these serendipitous and formal interactions independently, Kilduff and Tsai (2003) argue that these processes exist in parallel in networks. This study provides evidence of a process of development from serendipitous to formal network processes. In our case, this informal period enabled the development of personal relationships and common perspectives that led to relational and cognitive social capital bonds (Bolino et al., 2002; Nahapiet and Ghoshal, 1998) and facilitated the progression of formal networking.

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In particular, TK1, NV1 and HG1 indicated that the WTN network was formed from the bottom up and that members approached each other to pursue individual strategic marketing goals: “This means, we [all four edutainment centres] founded the marketing network WTN” (NV1). Moreover, these network members demonstrated a need for intellectual benefits through the sharing of market knowledge and similar competencies with respect to environmental education and edutainment, as identified in Section 4.2.1. That suggests an ‘inside-out legitimacy building’ among members who value network membership and provide resources for network activities (Human and Provan, 2000), and it also provides evidence of a certain ability to recognise the value of competitive business networks. However, some outside-in legitimacy building was indicated, as will be discussed next.

4.3.1.1 Policy Intervention

In contrast to the previous finding, JO1 and US1 considered the network formation to be politically desirable (“well, it was targeted in the state’s politics” (US1)):

“[Edutainment centre O] was pushed extremely hard, too hard, which is good

though, it was the big project in the leisure market for this area. But the other large establishments asked themselves, ‘actually, why only push one of the edutainment centres?’ So they asked and then the Ministry of Economic Affairs said, ‘work together and cooperate then the cake will be bigger and you will be stronger, instead of [us having to] support each organisation separately’. [...] the state didn’t want to support each single organisation to the same extent they did with the launch of [edutainment centre O] . Instead they argued that we [the destination] needed a new quality and this new quality would be

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our [WTN] cooperation and promoting this cooperation as one voice inter-

regionally, and promoting this country as a ‘country of experiences’.” (US1) “The edutainment centre O, I mean, I cannot just pursue my own interests,

there are expectations associated with [...] it’s also a simple political desirability that we do networking, and we can achieve a lot for our networks and gain more attention for the whole network we’re in [if we do so]. So, there is definitely something we’re giving back to the country, in getting involved with things. It’s not always a thought about gaining our own benefits from something in the short term, but also about playing a role in the country, thus playing a politically desired role.” (JO1)

This version of the policy-initiated and funded network (cf. Huggins, 2000) implies ‘outside-in legitimacy building’ (Human and Provan, 2000) rather than the ‘inside-out legitimacy building’ suggested above. The insight from these statements suggests that the unidirectional financial support for competitors granted by the state’s government was an additional and concomitant driver, causing the partners to gravitate together. According to US1, their relationship with the Department of Trade and Industry provided access to policy-relevant knowledge: “They [government] provide incentives, offer funding opportunities, and when funding opportunities are offered

then of course many initiatives spring up” (US1). JO1 stated, “it is good for the

organisation to have a direct connection to the big voices of tourism”, and TK1 added, “one day the chief executive officer from the DMO was at our meeting and

mentioned it [network support] during the conversation”. The members successfully

raised funding for network management (the coordinator) and the development of a network structure over the period of three years, from the ministry promoting

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economic development through ‘business and regional networks’ (Ministerium für Wirtschaft, 2008). This direct approach and communication with governmental bodies suggests that knowledge was accessed in order to introduce this innovative WTN network through the infrastructure of public bodies, as a knowledge transfer channel corresponding to Hjalager (2002). This provides evidence of policy-related knowledge usually rarely accessed by tourism SMEs (Scherl and Cooper, 2013). From this discussion, it may be assumed that the power and size of each individual organisation provided reasons for the development of this innovative network, which is explored further in the following section.