Sharing of resources, communication, and knowledge and information transfer

Networks are especially good for circumstances requiring efficient and reliable information transfer as they enhance the ability to learn new skills and knowledge (Dyer & Nobeoka, 2000; Powell, 1990). Reliable information and knowledge transfer is facilitated by the effective management of communication between actors and clients. Effective communication enables value-added business developments by developing connectedness, and this facilitates learning through knowledge and information transfer (Lindberg-Repo & Grönroos, 2004). Learning between actors is critical for developing a network’s competitive advantage (Dyer & Nobeoka, 2000; Dyer & Singh, 1998). For this to occur there must be both actor self-interest and collective interest; this is not surprising given that competition and cooperation may coexist between the same actors (Bengtsson & Kock, 1999; Medlin, 2006; Young & Wilkinson, 1997).

Informational advantages for an actor accrue from the network, which creates opportunities for access to information about potential partners and their trustworthiness. This results in the structure for a relationship, having the right information at the right time in order to seek an attractive partner and/or being referred to a suitable partner by other partner organisations. These informational advantages arise because network ties are able to transmit trusted information and speed up the diffusion of it (Brass et al., 2004; Powell, 1990). Gulati (1998) notes that “… networks of prior ties not only influenced the creation

of new ties but also effected their design, their evolutionary path, and their ultimate success” (p. 294). The findings of Bell and Zaheer (2007) reveal institutional or industry ties are more beneficial for knowledge transfer and innovativeness when there is close geographical proximity with actors as the tie does not convey the required level of trust when distances are greater. In contrast, organisational ties are not affected by close or distant geographical proximity; rather, knowledge flows are greater when actors are geographically distant and friendship ties exist within the actors.

Informational benefits may be provided via structural embeddedness through the position that an actor holds in the overall network structure, or by relational embeddedness through the closeness of ties between actors that is likely to occur at similar levels across the network. This can indicate the types of patterns of behaviours of others at similar levels within the network (Gulati, 1998). An implication of social embeddedness for actors within the network is the generation of increased trust between other actors (Gulati, 1998; Gulati et al., 2000). However, the informational role can also be used as a source of power within the network. For example, if the actor is situated between two other actors they can play one actor off against the other to create greater tension and so create an advantage to generate favourable terms. Alternatively, it may be that the two other actors create a source of conflicting demands (Gulati, 1998).

Networks with superior knowledge transfer are more effective and innovative; they are able to out-innovate other networks with less-than-superior knowledge-sharing routines because superior knowledge transfer provides the most important source of new ideas and information. Superior knowledge transfer is based on the extent to which actors have overlapping knowledge bases and the extent to which they regularly interact. Knowing where this knowledge resides in another actor is important; so too is the design of interorganisation routines that facilitate sharing between actors. The greater the absorption of information by partners in the relationship, the greater the potential for higher returns through knowledge sharing (Dyer & Nobeoka, 2000; Dyer & Singh, 1998).

Knowledge sharing is also dependent on the incentives to motivate partners in a relationship to do so, because knowledge sharing is costly and a return needs to be received. Knowledge sharing costs in terms of resources deployed by that actor to ensure that it happens effectively; in contrast, the costs are less for the receiving actor. Knowledge sharing should be a transparent process based on trust and willingness not to engage in opportunistic behaviour and ‘free ride’ on the other. To facilitate knowledge sharing, the coordination mechanism needs to create an environment in which regular knowledge- sharing routines occur and may, for example, include formal financial incentives or informal reciprocal behaviour. The greater the partner alignment of incentives, the greater will be the return through knowledge sharing. The effect of knowledge sharing is the creation of dense ties between actors which, in turn, increase both the rate of knowledge absorption and the understanding of where and what knowledge is useful (Dyer & Nobeoka, 2000; Dyer & Singh, 1998).

Within the process of knowledge and information sharing there is contention over the effects of strong and weak ties. Weak ties facilitate information gathering when there is much to collect, and in a dynamic industry setting these increase effectiveness as they give access to new opportunities. In contrast, strong ties are valuable and increase effectiveness when organisations seek to reduce competitiveness in stable industries (Ahuja, 2000; Brass et al., 2004; Burkhardt & Brass, 1990). Focal actors also gain in the accrual of innovativeness to their firm through knowledge and informational flows derived from their network position (Bell, 2005).

Knowledge within networks may also be created which implies actors need to learn how to learn together. This is dependent on actors learning to reciprocate, interdependently specialise, and then co-experiment and discover with each other. Given the increasing competitiveness in business markets, reciprocal learning alliances for the creation of new knowledge are becoming more crucial (Lubatkin, Florin, & Lane, 2001). Although the findings presented by Lubatkin et al. (2001) are based on a conceptual model for alliance between two firms, they still provide insights into why firms may engage in reciprocal learning alliances in a network environment.

The constructs of sharing of resources, communication, and knowledge and information transfer are important to understand for the present research study. These constructs are thought to facilitate value-added business developments and lead to the development of competitive advantage. By examining each of these constructs, differences in each of the three embedded NZAS networks may be explained. The next section examines adaptations by actors within the network.