Skip to main content
SpringerLink
Log in

Analysis of the Relationship Between Strategic Networking and Performance Among Croatian Service Sector SMEs

  • Conference paper
  • First Online:
Eurasian Business and Economics Perspectives

Part of the book series: Eurasian Studies in Business and Economics ((EBES,volume 22))

  • 227 Accesses

Abstract

The aim of this study is to analyze the impact of strategic networking on SMEs’ performance in the Croatian service sector. Data were collected from 136 SMEs using an e-mail questionnaire. Multiple linear regression was used as an analytical method to test the proposed hypothesis and sub-hypothesis. The results indicated that strategic networking has a significantly positive effect on financial and non-financial business performance. The external environment has a positive impact on service SMEs’ strategic networking. Moreover, the results revealed that the interaction with the external environment positively affects strategic networking—performance relationship. It is recommended that SMEs operating in the service sector need to strive to embrace strategic networking because it provides them with higher performance results and a more competitive position in the external environment. Finally, the study contributes to the existing knowledge and theory on the impact of strategic networking on business performance of SMEs, primarily by focusing on the service sector context in a small and open economy such as Croatia.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 149.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 199.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 199.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Allen, N. J., & Meyer, J. P. (1990). The measurement and antecedents of affective, continuance, and normative commitment to the organization. Journal of Occupational Psychology, 63(1), 1–18.

    Article  Google Scholar 

  • Antoldi, F., Cerrato, D., & Depperu, D. (2011). Strategic networks, trust and competitive advantage of SMEs in export consortia in developing countries. Springer.

    Google Scholar 

  • Asad, M., Chethiyar, S., & Ali, A. (2020). Total quality management, entrepreneurial orientation, and market orientation: Moderating effect of environment on performance of SMEs. Paradigms, 14(1), 102–108.

    Google Scholar 

  • Balaeva, O., Burnatseva, E., Predvoditeleva, M., Sheresheva, M., & Tretyak, O. (2012). Network strategies of hospitality companies in emerging and transitory economies: Evidence from Russia. In N. Delener (Ed.), Service science research, strategy and innovation: Dynamic knowledge management methods (pp. 519–546). Arcadia University.

    Chapter  Google Scholar 

  • Batjargal, B. (2010). The effects of network’s structural holes: Polycentric institution, product portfolio, and new venture growth in China and Russia. Strategic Entrepreneurship Journal, 4(2), 146–163.

    Article  Google Scholar 

  • Batjargal, B., Hitt, M. A., Tsui, A. S., Arregle, J., Webb, J. W., & Miller, T. L. (2013). The effects of network’s structural holes: Polycentric institutions, product portfolio, and new venture growth in China and Russia. Academy of Management Journal, 56(4), 1024–1049.

    Article  Google Scholar 

  • Carson, D., Gilmore, A., & Rocks, S. (2004). SMEs marketing networking: A strategic approach. Strategic Change, 13(7), 369–382.

    Article  Google Scholar 

  • CEPOR—Centar za politiku razvoja malih i srednjih poduzeća i poduzetništva. (2020). “Izvješće o malim i srednjim poduzećima u Hrvatskoj—2019 uključujući rezultate GEM-Global Entrepreneurship Monitor istraživanja za Hrvatsku”, [SMEs and Entrepreneurship Policy Center (2020) “Report on Small and Medium Enterprises in Croatia—2019. Including results GEM-Global Entrepreneurship Monitor research for Croatia”], Zagreb, [online]. Retrieved March 11, 2021, from http://www.cepor.hr/wp-content/uploads/2021/01/Izvjesce-2020-HR-web.pdf

  • Covin, J. G., & Slevin, D. P. (2006). Strategic management of small firms in hostile and benign environments. Strategic Management Journal, 10(1), 75–87.

    Article  Google Scholar 

  • Donckels, R., & Lambrecht, J. (1995). Networks and small business growth: An explanatory model. Small Business Economics, 7(4), 273–289.

    Article  Google Scholar 

  • Eckenhofer, E. M. (2011). Outlining the benefits of strategic networking. Journal of Systems Integration, 2(4), 70–86.

    Article  Google Scholar 

  • Ehsan, F. S., Oswald, T. E., Hazman, F. H., & Ismail, A. W. (2017). Recognising the importance of strategic business network on business performance of SME manufacturing firms in Malaysia: Analysing the moderating influence of Human capital and business environment. International Journal of Arts & Sciences, 9(4), 31–44.

    Google Scholar 

  • Eriksson, P. E., & Pesamaa, O. (2007). Modelling procurement effects on cooperation. Construction Management and Economics, 25(8), 893–901.

    Article  Google Scholar 

  • Garbarino, E., & Johnson, M. S. (1999). The different roles of satisfaction, trust, and commitment in customer relationships. The Journal of Marketing, 63(2), 70–87.

    Article  Google Scholar 

  • Gomes-Casseres, B. (1994). Group versus group: How alliance networks compete. Harvard Business Review, 72(4), 62–66.

    Google Scholar 

  • Gupta, A. K., & Govindarajan, V. (1984). Business unit strategy, managerial characteristics, and business unit effectiveness at strategy implementation. Academy of Management Journal, 27(1), 25–41.

    Google Scholar 

  • Gupta, A. K., & Govindarajan, V. (1994). Organising for knowledge flows within MNCs. International Business Review, 3(4), 443–457.

    Article  Google Scholar 

  • Hallberg, K. (1999). Small and medium scale enterprises: A framework for intervention, small Enterprise unit. Private Sector Development Department, The World Bank.

    Google Scholar 

  • Hansen, H., Samuelsen, B. M., & Silseth, P. R. (2008). Customer perceived value in B-t-B service relationships. Investigating the importance of corporate reputation. Industrial Marketing Management, 37(2), 206–217.

    Article  Google Scholar 

  • Human, S. E., & Provan, K. G. (1997). An emergent theory of structure and outcomes in small firm strategic manufacturing networks. The Academy of Management Journal, 40(2), 368–403.

    Google Scholar 

  • Jarillo, J. C., & Martinez, J. I. (1990). Different roles for subsidiaries: The case of multinational corporations in Spain. Strategic Management Journal, 11(7), 501–512.

    Article  Google Scholar 

  • Johannison, B. (1987). Beyond process and structure: Social exchange networks. International Studies of Management and Organization, 17(1), 3–23.

    Article  Google Scholar 

  • Johannisson, B. (1986). Network strategies: Management technologies for entrepreneurship and change. International Small Business Journal, 5(1), 19–30.

    Article  Google Scholar 

  • Jonsson, P., & Zineldin, M. (2003). Achieving high satisfaction in supplier-dealer working relationships. Supply Chain Management: An International Journal, 8(3), 224–240.

    Article  Google Scholar 

  • Krželj-Čolović, Z. (2016b). Oblici poslovnog povezivanja malih I srednjih hotelskih poduzeća. [Forms of business links between small and medium hospitality enterprises]. Economic Review, 67(3), 227–240.

    Google Scholar 

  • Krželj-Čolović, Z., Vrdoljak Raguž, I., & Milić Beran, I. (2016a). Strategic networking in hospitality industry. In I. Vrdoljak Raguž et al. (Eds.), Neostrategic management: An international perspective on trends and challenges (pp. 27–43). Springer.

    Chapter  Google Scholar 

  • Kusumawardhani, A., McCarthy, G., & Perera, N. (2009). Framework of entrepreneurial orientation and networking: A study of SMEs performance in a developing country. Retrieved February 23, 2021, from https://ro.uow.edu.au/gsbpaper/23

  • Lama, A. K., & Shrestha, A. K. (2011). Factors influencing in networking activities in SMEs: An exploratory study of factors that initiate networking activities in case of SMEs. Master Thesis, Umea: Umea School of Business.

    Google Scholar 

  • Larsson, E., Hedelin, L., & Garling, T. (2003). Influence of expert advice on expansion goals of small businesses in rural Sweden. Journal of Small Business Management, 41(2), 205–212.

    Article  Google Scholar 

  • Lee, C., Lee, K., & Pennings, J. (2001). Internal capabilities, external networks, and performance: A study on technology-based ventures. Strategic Management Journal, 22(6/7), 615–640.

    Article  Google Scholar 

  • Mason, R. B. (2006). Coping with complexity and turbulence—An entrepreneurial solution. Journal of Enterprising Culture, 14(4), 241–266.

    Article  Google Scholar 

  • McCosh, A. M., Smart, A. U., Barrar, P., & Lloyd, A. D. (1998). Proven methods for innovation management: An executive wish list. Journal of Creativity and Innovation Management, 7(4), 175–192.

    Article  Google Scholar 

  • Morgan, R. M., & Hunt, S. (1994). The commitment-trust theory of relationship marketing. Journal of Marketing, 58(3), 20–38.

    Article  Google Scholar 

  • Morić Milovanović, B., Jelen, J., & Mikić, M. (2014). Multidimensional analysis of the external environment in the strategic networking process among service SMEs in a lagging economic context. The International Journal of Engineering and Science, 3(10), 26–35.

    Google Scholar 

  • Morić Milovanović, B., Primorac, D., & Kozina, G. (2020). The impact of strategic networking on business performance of manufacturing SMEs operating in a predominantly service based economy. Interdisciplinary Description of Complex Systems: INDECS, 18(2-B), 194–206.

    Article  Google Scholar 

  • Naman, J. J., & Slevin, D. P. (1993). Entrepreneurship and the concept of fit: A model and empirical tests. Strategic Management Journal, 14(2), 137–153.

    Article  Google Scholar 

  • Omwono, G., Odoyo, S., & Jane Sang, F. (2016). Relationship between strategic networking on financial performance in small medium Enterprise in Eldoret Town Uasin Gishu County, Kenya. International Journal of Humanities and Social Science, 1(1), 1–19.

    Google Scholar 

  • Park, S. H., Chen, R., & Gallagher, S. (2002). Firm resources as moderators of the relationship between market growth and strategic alliances in semiconductor start-ups. Academy of Management Journal, 45(3), 527–545.

    Google Scholar 

  • Porras, S. T., Clegg, S., & Crawford, J. (2004). Trust as networking knowledge: Precedents from Australia. Asia Pacific Journal of Management, 21(3), 345–363.

    Article  Google Scholar 

  • Saleh, A. S., & Ndubisi, N. O. (2006). An evaluation of SME development in Malaysia. International Review of Business Research Papers, 2(1), 1–14.

    Google Scholar 

  • Sedmak, G., Planinc, T., & Planinc, S. (2011). Unexploited potentials of networking in the hospitality business—Slovenia’s case. Tourism and Hospitality Management, 17(2), 187–200.

    Article  Google Scholar 

  • Sengupta, A. (2011). Network strategy and access to business finance: Indian entrepreneurs in the information and communication technology industry. Journal of Entrepreneurship, 20(1), 103–126.

    Article  Google Scholar 

  • Sivadas, E., & Dwyer, F. R. (2000). An examination of organisational factors influencing new product success in internal and alliance based processes. Journal of Marketing, 64(1), 31–49.

    Article  Google Scholar 

  • Song, M., Van der Bij, H., & Weggeman, M. (2006). Factors for improving the level of knowledge generation in new product development. R&D Management, 36(2), 173–187.

    Article  Google Scholar 

  • Stam, W., Arzlanian, S., & Elfring, T. (2013). Social capital of entrepreneurs and small firm performance: A metanalysis of contextual and methodological moderators. Journal of Business Venturing, 29(1), 152–173.

    Article  Google Scholar 

  • Stanko, M. A., Bonner, J. M., & Calantone, R. J. (2007). Building commitment in buyer–seller relationships: A tie strength perspective. Industrial Marketing Management, 36(8), 1094–1103.

    Article  Google Scholar 

  • Van der Stede, W. A., & Chow, C. W. (2006). The use and usefulness of non-financial performance measure. Management Accounting Quarterly, 7(3), 1–8.

    Google Scholar 

  • Vasilska, M., Kereziev, I., & Ivanova, Y. (2014). Strategic networking behavior of SMEs: Practical considerations from Bulgaria. In K. Todorov (Ed.), Handbook of research on strategic Management in Small and Medium Enterprises (pp. 372–397). IGI Global.

    Chapter  Google Scholar 

  • Weigelt, K., & Carnerer, C. (1988). Reputation and corporate strategy: A review of recent theory and applications. Strategic Management Journal, 9(5), 443–454.

    Article  Google Scholar 

  • Wiklund, J., & Shepherd, D. (2005). Entrepreneurial orientation and small business performance: A configurational approach. Journal of Business Venturing, 20(1), 71–91.

    Article  Google Scholar 

  • Wincent, J. (2005). Does size matter?: A study of firm behavior and outcomes in strategic SME networks. Journal of Small Business and Enterprise Development, 12(3), 437–453.

    Article  Google Scholar 

  • World Bank. (2019). [online] Retrieved March 24, 2021, from https://data.worldbank.org/indicator/NV.SRV.TOTL.ZS

Download references

Author information

Authors and Affiliations

  1. Institute of Public Finance, Zagreb, Croatia

    Bojan Morić Milovanović

  2. Department of Economics and Business Economics, University of Dubrovnik, Dubrovnik, Croatia

    Zorica Krželj-Čolović

  3. Institute of Public Finance, Zagreb, Croatia

    Zoran Bubaš

Authors
  1. Bojan Morić Milovanović
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Zorica Krželj-Čolović
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Zoran Bubaš
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Bojan Morić Milovanović .

Editor information

Editors and Affiliations

  1. Istanbul Medeniyet University, Fatih, Istanbul, Turkey

    Mehmet Huseyin Bilgin

  2. MUFG Union Bank, San Francisco, CA, USA

    Hakan Danis

  3. Department of Business Administration, School of Social Sciences, Reykjavik University, Reykjavik, Iceland

    Ender Demir

  4. Department of International Business, Norwegian University of Science and Technology, Trondheim, Norway

    Ghulam Mustafa

Rights and permissions

Reprints and permissions

Copyright information

© 2022 The Author(s), under exclusive license to Springer Nature Switzerland AG

About this paper

Check for updates. Verify currency and authenticity via CrossMark

Cite this paper

Milovanović, B.M., Krželj-Čolović, Z., Bubaš, Z. (2022). Analysis of the Relationship Between Strategic Networking and Performance Among Croatian Service Sector SMEs. In: Bilgin, M.H., Danis, H., Demir, E., Mustafa, G. (eds) Eurasian Business and Economics Perspectives. Eurasian Studies in Business and Economics, vol 22. Springer, Cham. https://doi.org/10.1007/978-3-030-94672-2_10

Download citation

Publish with us

Policies and ethics

Search

Navigation