Managing SMEs' Collaboration Across Organizational Boundaries Within a Regional Business Ecosystem

Abstract

Small and medium sized enterprises (SMEs) often engage in relationships with external partners that complement their activities in improving their products and services in order to maintain their market share in a competitive landscape. In this chapter, we present a case that focuses on SMEs’ perspective on managing and organizing inter-company collaboration within a regional business. We explore how purposefully managed mutual knowledge flows across organizational boundaries applied by SMEs contribute to the development of the ecosystem they are immersed in. Our key findings include insights into the advantages offered by being embedded within regional ecosystem boundaries, such as low transaction costs and reduced risks of opportunistic behaviors, environmental opportunities for external knowledge sourcing or increase of the sphere of influence. We also highlight accompanied challenges, such as low autonomy and control over the partners and indicate shared issues and responsibilities crucial for further ecosystem development. As a conclusion, we offer a set of recommendations both for managers and policymakers concerning general organizational requirements and governing structures.