Firm’s Network Position and Business Performance

Abstract

The theory of business networks has attracted increasing attention in recent years. It assumes that the competitive advantage of a firm depends on its business relationships with various entities. The quality and number of business relationships a firm maintains shape its network position, which influences the firm’s performance. The aim of this paper is to propose a framework for analysing the development of the firm’s position in the business network in the context of the firm’s performance. A literature review method was used in the paper. Based on a literature analysis and the authors’ earlier research, the proposed framework suggests that a firm’s network position changes constantly due to continuous changes in the determinants of its network position and continuous changes in the firm’s behaviour as it develops its network position. In turn, changes in the network position impact the firm’s performance.