The role of business associations in promoting networking. The Italian case of the “network...

The role of business associations in promoting networking. The Italian case

of the “network contracts”

Abstract This paper investigates the role of business associations (BAs) in promoting inter-firm

collaboration, in particular through the use of the network contract (NC) – a particular type of

formal collaboration recently introduced in Italy.

The analysis reveals that BAs can favor and promote inter-firm collaboration in two ways:

directly, being formally involved in a NC and indirectly, through a number of initiatives (eg.

matching meetings, workshops and so on), acting as facilitators of forms of inter-firm

collaboration and, specifically, of NCs.

Moreover, analysis shows that the presence of a BA can influence the network contract’s

effects and improve local entrepreneurs’ attitude towards collaboration and networking.

Key words: institutions, business associations, inter-firm collaboration, network contract,

small and medium-sized enterprises (SMEs)

The role of business associations in promoting networking. The Italian case

of the “network contracts”1

by Aureli, S., Cesaroni, F.M, Ciambotti, M. and Del Baldo, M.

Aureli, Selena

Department of Business studies

University of Bologna

Rimini Campus, Via Angherà, 22 – Rimini (RN) – ITALY

e-mail: selena.aureli@unibo.it

Cesaroni, Francesca Maria

Department of Economics, Society, Politics (DESP)

University of Urbino “Carlo Bo”

Via Saffi 42 – 61029 URBINO (PU) – ITALY

e-mail: francesca.cesaroni@uniurb.it

Ciambotti, Massimo

e-mail: massimo.ciambotti@uniurb.it

Del Baldo, Mara

e-mail: mara.delbaldo@uniurb.it

1 This paper is the product of a joint research project, however, M. Del Baldo has written sections 1 and 2, S.

Aureli has written sections 3 and 4.2., F. Cesaroni has written section 4.1. and M. Ciambotti has written section

1. Introduction In Italy, in addition to traditional forms of formalized inter-firm collaboration (i.e. consortia,

temporary associations among enterprises, joint ventures, franchising contracts), a new

juridical instrument, named “network contract” (hereafter NC), has been recently introduced.

It records a steady increase in usage among enterprises (Iamiceli, 2009; Cafaggi, 2010, 2011;

Cuffaro, 2010): from its introduction in 2009, now there are almost 700 contracts involving

about 3500 organisations (Unioncamere, 2013).

Designed by the Italian Government to favor networks among small and medium-sized

enterprises and increase their level of innovation and competitiveness, this contract has also

attracted different types of organisations and additional goals have been attributed to it in

practice (Aureli et al., 2011; Rapporto Unicredit, 2011; Cafaggi et al., 2012a-b). For example,

it may involve no-profit organisations, universities and other type of institutional entities such

as charitable bank foundations, cooperatives, consortia and business associations representing

specific categories of enterprises, in addition to traditional for profit enterprises. Moreover, in

some cases NCs have been assigned to pursue environmental protection, improve the work

culture of a territory, create new job opportunities, besides promoting network members’

development and profitability.

With these premises, authors aim to investigate the presence of institutional organisations

among network’s participants with a special attention to associations that represent

businesses. Business associations (hereafter BAs) are important as they do not only provide

services for their members, they are also actively involved in creating the best legal and

political conditions to support entrepreneurial activity and economic development in general.

Thus, it is possible to suppose that BAs are actively involved in promoting collaboration

among businesses through the implementation of NCs. These contracts may involve only

internal affiliated businesses, or both affiliated and non-affiliated businesses. In some cases,

BAs may prefer to limit their activity to promote collaboration between businesses and favour

the diffusion of an entrepreneurial culture in their local area through the organisation of

seminars and meetings. However, BAs may also directly participate to NCs as active

members, working together with other businesses.

Mainstream research on entrepreneurship and strategy analyses the capabilities of individuals

or single enterprises to recognise and exploit opportunities deriving from collaborations with

other entities (Zahra et al., 2005; Kontinen and Ojala, 2011; Ellis, 2000; Singh, 2000).

Authors’ attention is directed towards the business environment and the entrepreneurial culture

created by BAs that help generate opportunities to collaborate with other enterprises (Baumol,

1993; Aidis et al., 2007; Acs et al., 2008; Hwang and Powell, 2005; Butera and Alberti, 2013).

Through an empirical analysis performed in April-July 2013 on all Italian NCs subscribed at

February, 2013, the present study aims to answer to the following research question: do BAs

promote networking through the use of the NC? In order to answer this question, authors: a)

classify the different type of BAs involved in NCs; b) evaluate the presence of this type of

organisations compared to for profit organisations; c) analyze NCs involving BAs, focusing

on formal networks’ objectives and the role BAs play in the network; d) evaluate how BAs

promote collaboration among members.

The analysis reveals that BAs can favour and promote inter-firm collaboration in two ways: 1)

directly, being formally involved in a NC, as a “node” of the network, and 2) indirectly,

through a number of initiatives (e.g. matching meetings, workshops), acting as facilitators or

promoters of forms of inter-firm collaboration and, specifically, of NCs.

It’s interesting to observe that, contrary to what expected, when BAs are involved in a NC,

promoting networking is not the main formal objective of the contract. Nevertheless BAs can

play an important role in favouring networking. In fact BAs contribute to service development

and promote information sharing among their members, and so produce indirect and positive

effects outside the networks’ boundaries, intended as positive impacts on the economic and

social conditions of the local area (e.g. development of new business initiatives, creating

relational, informative and/or technological infrastructures).

Consequently, the concluding reflections emphasise how the presence of a BA in a NC can

influence the nature of contract’s real effects and improve local entrepreneurs’ attitude

towards collaboration and networking.

The paper proceeds as follows. In section 2 a literature review is presented in order to draw

the interpretative framework (focused on institutions and networks, networking strategies and

SMEs, and on the role of BAs in promoting networks); section 3 outlines the research

methodology, whereas the findings of the analysis are presented in section 4. Finally

discussions and conclusions follow in section 5.

2. Literature Framework 2.1 Institutions and networks

The term “institutions” encompasses a complex concept, which is the focus of studies

belonging to various disciplines (organisation, economics, sociology and managerial studies).

In a first approximation it is possible to state that there are two prevailing interpretations. On

the one hand, institutions are systems of established and embedded social rules (socially

embedded systems of rules) that structure social interactions among single individuals or

agents. Thus, past economic literature has usually kept separate institutions from individuals

acting in the institutional environment. On the other hand, an institution is intended as

established organisation or foundation, usually committed to education, public service, or

culture.

However, when agents are grouped into organisations bounded together by some common

purpose to achieve certain objectives (like political parties, trade unions, BAs, and so on) and

structured around specific rules, it is possible to define organisations as a type of institution: a

social system with boundaries and rules (Hodgson, 2006).

At the same time, organisations can act to modify the larger institutional environment, as in the

case of NGOs interacting with national governments and multinational corporations to create

the conditions for foreign direct investments (Doh and Teegen, 2002). Their activity defines

these organisations as institutional entities. They try to establish institutional stability, fairness,

and predictability that are key to economic growth (North, 1990, 2005). In other words,

institutions are conceived as organisations that aim to become more integrated into the

institutional environment and play a role in defining the components (legal, societal and

economic elements) of the institutional setting. This second conception and interpretation is

also the one adopted in the present work. Therefore it is used to refer to institutional entities,

including BAs, which have a relevant role in the development of inter-firm forms of

collaboration or networks and networking strategies.

Although research on institutions and networks has proceeded on largely separate trajectories

over the past decades, a number of linkages exist between these subfields, whereas the former

is prevalently associated with works in organisational and political sociology, and the latter

rooted in economic sociology literature (see Owen-Smith and Powell, 2008: 594). Putting these

two perspectives in dialogue, different contributions address attention on the relationships

between networks and institutions (Pratt, 1997) focusing on the role of institutions in

promoting learning regions (Morgan, 1995) and on the social context of industrial development

(Grabher, 1993; Amin and Thrift, 1994). Entrepreneurial support services (developed through

actions and projects promoted by BAs), as well as research universities and research centres,

are the conditions that facilitate the successful establishment of an entrepreneurial culture

(Feldman, 2001).

In the context of institutional theory, DiMaggio and Powell (1983) stressed the role of

professional networks (like BAs) in the rapid spread of various models of organising social

and economic activities through increasing interactions among participants, information

sharing, mutual awareness and responsiveness. Networks are carriers of institutional effects

(Scott et al., 2000). Numerous scholars identify networks as the channels through which

institutional effects flow; networks and institutions mutually shape one another and this co-

evolutionary process creates and transforms the social (and economic) world (Owen-Smith

and Powell, 2008). Institutions are critical determinants of economic behaviour (North, 1990)

and economic transactions (Williamson, 1998) in general. The examination of institutional

and environmental conditions is especially useful for public policy planning, since the

dynamics of entrepreneurship can be vastly different depending on the institutional context

and the level of economic development (see Zoltan et al., 2008: 219 and 232).

Different contributions highlighted the relationship between the institutional environment and

entrepreneurship development both under the theoretical (Baumol, 1990, 1993; North, 1990,

2005) and empirical perspective (Aidis et al., 2007).

According to North (1990), entrepreneurs are the main agents of change. Organisations such

as firms set up by entrepreneurs will adapt their activities and strategies modelled to fit the

opportunities and limitations provided through the formal and informal institutional

framework. Baumol (1993) provides greater analysis of the types of entrepreneurship that

may emerge under different institutional environments. Institutions are important as they

represent structures that provide incentives for different types of economic activity.

Entrepreneurs will weigh the incentives present in the environment both in the form of regulations (formal rules) as well as in terms of the prevailing cultural values and norms

(informal rules according to North).

Also Pratt (1997) stresses the importance of a concern with network and institution

(considered as a sort of a meso-level intermediary) in relation to the development of the social

and economic context and in promoting innovation through the realisation of conditions and

contexts in which entrepreneurship and inter-firm collaboration can develop (i.e. science

parks, the formation and grow of knowledge-based business, the transfer of technology and

business skills). The network builders are predominantly represented by universities, local

authorities, and agents of the central government (this author does not explicitly cite BAs).

Similarly, Hwang and Powell (2005) underline how only recently scholars have attended to

the legal and political conditions that support entrepreneurial behaviour, focusing on

institutional aspects of entrepreneurship. Specifically, authors address their attention on the

role of various institutional entities and processes in fostering entrepreneurial behaviour. They

also take into consideration the relevance of shifts in the institutional environment and the

role of institutions in creating new combinations that generate social, political, or economic

change. Among the different key forces in the redefinition of organisational practices and

structures (processes of institutional changes) that act as institutional entrepreneurs, they

focus on professional knowledge and rule making. Particularly, professionals (professional

groups, personnel experts, and lawyers) reshape the landscape, with respect to definitions of

the law or though the creation of standards.

Finally, among several contributions that analyse the reciprocal dependence between

businesses and territories (i.e. the territorialised innovation or the knowledge network strands;

see Moulaert and Sekia, 2003; Cedrola et al., 2011), another interesting stream of research

identifies knowledge assets as those critical and strategic knowledge resources affecting the

performance and the value creation dynamics and the competitiveness and sustainable growth

of a specific territorial system (Marr and Schiuma, 2001; Lerro and Schiuma 2009)2. Authors

provide a knowledge-based interpretation of regional development, identifying three main

knowledge assets categories affecting regional development dynamics: human capital,

relational capital and networking capabilities, and structural capital. With reference to a

regional context, human capital3 essentially comprises the know-how characterizing the

entities operating within a region. Relational capital and networking capabilities emerge from

the set of formal and informal relationships among the different regional stakeholders to

activate and sustain value creation dynamics (Becattini, 1989, 1990; Brusco, 1982, 1986;

Piore and Sabel, 1984; Storper, 1997; Cappellin, 2003).

Thirdly, structural capital includes all those assets that are not tangible in nature but play a

fundamental role in the acquisition, management and diffusion of knowledge at regional level

(i.e. technological infrastructures, digital communications systems and networks). Social

capital is a special component of structural regional capital (Schiuma et al., 2005; Schiuma

and Lerro, 2008) that comprises the knowledge assets related to the soft infrastructures of a

region, which are the result of the dynamic interdependencies linking in networks regional

entities. Among these, particular attention should be paid toward the role of local firms as

knowledge repositories, as well as to universities and research centres. Authors do not

expressly mention BAs.

2.2. Networks, networking strategies and SMEs

“Network” is a broad concept that can describe many types of interconnected relationships

occurring among firms, economic entities and/or individual subjects. Networks may be

interpersonal or organisational; they may be limited to bilateral (or dyadic) relations, or they

might assume the form of a combination of multiple sub-systems of links. They range from

informal relationships to formal agreements, strategic alliances, constellations, consortia,

industrial districts and groups (Lorenzoni, 1992; Ferrero, 2001).

In general, networks assist entrepreneurs in accessing the resources needed for business

formation (Aldrich et al 1987; Johanisson, 2000), to obtain tangible and intangible resources

(such as information, finance and labour) and to enhance the entrepreneur’s opportunity

recognition capabilities (Hills et al, 1997).

Such inter-organisational relationships seem to be more important for SMEs than for their

larger counterparts (Golden and Dollinger, 1993): by collaborating, small firms can share and

reduce costs; obtain complementary resources, knowledge and capital; improve learning; start

or increase international expansion and, consequently, enhance their competitiveness and

profitability (Welch, 1992; BarNir and Smith, 2002; Coviello, 2006; Wright et al., 2007).

Kontinen and Ojala, 2011).

The main theories that have interpreted businesses collaboration can be synthesized into two

approaches: the cost argument (that suggests that networks help individual firms overcome

their financial and personnel constraints, which hinder internationalisation, while also

providing the best alternative to both transaction costs and coordination costs) (Williamson,

1991) and the resource-based explanation (Grant, 1991). However, most recent studies refer

to the network theory perspective (Johanson & Mattsson, 1988) affirming that a firm’s

strategy is influenced by a variety of network relationships (with customers, suppliers,

distributors, regulatory and public agencies as well as other market actors).

Drawing from the afore mentioned theoretical lenses (transaction cost theory, resource-based

view and strategy management approach), literature has mainly focused on enterprise motives

for collaboration (Glaister and Buckley, 1996), types of relationships, coordination and

2 This approach is strongly based on the concept of a ‘‘learning region’’, which considers the ability of a local

system to evolve strictly related to its capacity to sustain a continuous learning process (Morgan, 1995). 3 Human capital refers to skills, knowledge and expertise owned by individuals or collectively.

governance problems (Lorenzoni, 1992) and possible effect of inter-firm network structure to

performance outcomes such as growth (e.g., Powell et al., 1996).

Other scholars emphasise the importance of the entrepreneur’s contacts with other people

(Ellis, 2000; Singh, 2000; Crick & Spence, 2005), suggesting that opportunity recognition is

positively related to an entrepreneur’s social network.

Networking strategies represent a valuable approach for companies and particularly for SMEs

to fill their shortage of capabilities and financial resources and foster innovation and growth.

(Birley, 1985; Golden & Dollinger, 1993; Hara & Kanai, 1994; Håkansson and Snehota, 1995;

BarNir & Smith, 2002).

NCs are contextualised within the vast theme of business networks, and, more generally, of

inter-firm collaboration. NCs are a new and formal tool aimed at enhancing cooperation among

firms. It has been recently introduced by the Italian government to support company innovation

and competitiveness. Previous researches (Aureli et al., 2011; Aureli and Del Baldo, 2012;

Cafaggi et al., 2012a-b) show that NCs are widespread among SMEs (Rapporto Unicredit,

2011). NCs have been used for different purposes (to implement long-term projects, as well as

to assist a small group of enterprises in promoting their products and services), as it is very

flexible. Moreover NCs may aggregate businesses from different sectors and geographic areas

– differently from collaborations in classical industrial districts (Becattini, 1990). Their

flexibility, together with the preservation of firms’ independence, seems to represent the most

important aspect that fosters contract’s use among organisations.

2.3. Business associations as institutional entities promoting networks

In international literature there are few contributions that specifically address the role of BAs

in promoting collaboration between companies, and almost none focused on the role of BAs

in developing NCs. Therefore, in this section results from empirical research are briefly

presented. They provide some insights about the role of BAs in promoting entrepreneurship

and collaboration between businesses.

Haug and Sommer (2008) show that, in the formation of networks among entrepreneurs,

external partners or third person parties - such as economic development agencies - play an

important role in helping define realistic goals, set up stable cooperative arrangements, and

carefully assess the motivations of the entrepreneurs involved in the project (allowing the

search of partners with similar interests).

A survey on the diffusion of NCs in Italy – which covered a sample of 304 firms involved in

159 NCs (Solaro, 2013) shows that a significant percentage of the companies became aware

of the existence of the NC through other entrepreneurs or professional consultants (45.1%)

and BAs (43.1%). Only a minority was informed by local Chambers of Commerce and the

Ministry of Economic Development. This result highlights the relevance of the informative-

channel role played by BAs, in comparison to other institutional entities, such as local public

authorities, government bodies and media. This result is also confirmed in term of the role

played by BAs in providing technical assistance during the implementation and development

phases of a NC. Among the improvements to the NC suggested by the firms interviewed,

entrepreneurs suggest the dissemination of information on the NC and the possibility of

extending the contract to universities, research centres, and foreign companies. In summary,

the NC needs to be more advertised and supported by public entities and BAs.

Another study (Carnazza, 2008) reveals that among the industrial policy measures that could

facilitate the development of partnerships and push entrepreneurs to create alliances and

networks, more emphasis should be attributed to public institutions, BAs and banks, which

represent the leading actors in favouring the processes of cultural and managerial growth of

the companies belonging to local networks. The design and implementation of projects of

“strong” aggregation (formalized and structured, as in the case of NCs) depend on strategic

and trustees factors. About the 60% of the interviewed entrepreneurs stress the need for the

participation of a third party which should operate in a non-partisan way, reinforce trust

among participants, and ensure positive results to everyone.

The importance of relationships among companies and other institutional entities is shown in

an Italian survey (Unioncamere-Istituto Tagliacarne, 2007) which demonstrates how SMEs

with stable relationships with other companies, consortia, and BAs record better performances

compared to "not related” SMEs. These results suggest the usefulness of facilitations

especially designed at rewarding collaboration agreements involving a large number of

companies and other institutions and the relevance of third party entities (particularly BAs) in

developing aggregation processes and supporting micro and small businesses.

Similarly, another Italian study (Oliva, 2006) shows that cultural change (strengthening of the

aggregation propensity and culture) can derive from a commitment of BAs, and their role as

“third parties” to help businesses in the early stages of networks design, and implementation.

The presence of a “third” entity is desired by more than half of the entrepreneurs. It should

sustain the project’s proposal, help in the choice of partners, and in the management and

governance of the different phases. Its contribution also regards possibilities of learning from

positive experiences that already exist, increasing the degree of trust in collaborative forms,

and making companies aware of the direct and indirect benefits of the networking strategy.

Only a minority of entrepreneurs, however, believes that the third party should simply

propose the project or act as a legal entity that realizes the initiative in the name and on behalf

the companies adhering to the network.

Finally, insights from a recent study (Butera and Alberti, 2013) on networks’ governance

show that: 1) the development of networks is not always tied to the pre-existence of dense

systems of relationships. If networks do not emerge spontaneously, they can be developed by

various institutional entities through training and information initiatives that trigger

relationships and facilitate the contamination; 2) the role of BAs is essential to help

businesses formalise collaboration and networks objectives, strengthen the relational context

and bring out the structure best suited to the objectives of the network and ensure consistency

of motivations, democratic balance and transparency; 3) different institutional entities emerge:

municipal and provincial administrations, BAs, trade unions, local banks, banking

foundations, schools, universities and research centres, Chambers of Commerce and service

centres. These entities are able to generate positive externalities for local areas providing

“industrial commons” (Pisano and Shih, 2009) such as agglomeration of skills, infrastructure

and services that support the competitive advantage of networks and territories.

The active role of the different institutional entities leads to revise the current

policies directed to support the firms’ competitiveness and change the focus of managerial

models and industrial policies, taking into consideration both the geographical boundaries

typical of traditional networks (i.e. the districts), the cognitive proximity (the structure of

shared values, beliefs, knowledge, skills and visions) and the relational proximity of the

network’s nodes. The policy maker can then encourage the creation of synergies in the

relational structure of a network. This has occurred, for example, in the case of the first NC

(named RaceBo) signed in Bologna: the local BA supported the creation of the NC, as it

provided important organisational and legal services.

The protagonists of the network governance can then be organisations and associations that

meet a variety of purposes and they assume profoundly different structural characteristics:

operating centres, development agencies, business innovation centres (BIC)4, banks and BAs.

Especially BAs, during the years, have changed several times their own role, triggering

processes of strategic and organisational areas. Some are being proposing as centres of high

BIC have been commissioned by the European Union in 1984, and defined in the Document XVI/C3/354/1988

the European Commission.

value-added, allowing particularly for associated small businesses with developing projects

that individually they would not be able to do. Consequently, they can be conceived as

"system agents” or "network operators" capable of providing advanced services to business

networks. In this perspective, institutional entities (and among these BAs) can also have a role

of a network meta-manager, in order to: a) provide and address the local system toward a

strategic goal; b) govern the internal political processes of the network, managing the power

and distributing resources; c) create the cultural, strategic and organisational background

favourable to the network development. Thus, it is possible to affirm that BAs can stimulate

the socio-economic progress through the support of aggregative processes and networks

development, playing four different roles and acting as: a controller and supervisor; a

propeller and envisioner; a catalyst; and as a informer and educator (administrator of the

knowledge). When switching from the first role (which it traditionally deputed to public

institutions) to the next ones there is a gradual orientation toward the improvement of the

general well-being of the society, collaborating with other private and public entities and

giving form to hybrid and synergistic networks (Niccolini, 2008).

3. Methodology

Authors have opted for a mixed method of research that combines qualitative and quantitative

approaches. The use of mixed methods has been already found fruitful in several disciplines

(Wolfram and Hassard, 2005; Model, 2009). In particular two methods have been used:

document analysis and a self-administrated questionnaire. Document analysis is functional to

identify and classify the different type of BAs involved in NCs; verify whether they represent

a minority in networks because networks are composed mainly by enterprises or they

predominate compared to traditional for profit organisations; classify formal networks’

objectives and their programs to evaluate their role in promoting collaboration.

Collection of above mentioned information is possible as the NC is a formal agreement

regulated by the law (introduced through law no. 33 on 9 April 2009 and subsequently

modified) that have to contain all the following information: the network’s strategic

objectives; the network program, that is activities needed to reach the objective; the common

entity (like a Board) entrusted with the execution of the contract; members’ obligations; the

mutual fund (desirable but not compulsory) for the realization of the network’s projects.

With respect to typical contractual networks, which are formed through interconnected

bilateral or multilateral contracts (a network of connected contracts), and differing from

traditional forms of collaboration undertaken through consortia, joint ventures, franchising

contracts, etc., this new juridical instrument is characterized by mandatory outcomes (the

parties must agree on a common scope that is they must work together on one or more

activities) and a predetermined content (the law indicates that the contract has to build the

parties’ innovative capacities and to improve their competitiveness) (Cuffaro, 2010).

Existing NCs and members’ names have been obtained by the information system of the

Italian Chambers of Commerce, which provided the authors with a list of 678 NC, involving a

total of 3,659 enterprises. The list refers to all Italian NCs subscribed up to February 2013.

Then, after having selected the networks relevant for this research (networks which entail at

least one BAs), their written contracts have been analyzed. The selection process and the

document analysis have been performed in the period of April-July 2013.

In addition, an exploratory survey was carried out by administering a structured questionnaire

to a group of Italian enterprises. Questionnaires have been used to catch entrepreneurs and

managers’ beliefs about the role of BAs in promoting collaboration among enterprises. A total

of 112 completed questionnaires returned, which helped understand the efficacy of such

initiatives sponsored by BAs to promote inter-firm collaboration.

4. Findings

4.1. Business associations’ active participation in networks: minority

partners or incubators? In Italy as well as in other countries BAs’ activities mainly refer to the provision of services to

their members (informative, legal, administrative, fiscal, etc.) and the establishment of a

continuous dialogue with national and local entities (i.e. the Government, local municipalities,

universities, job agencies) that regulate or influence market and business conditions. In fact,

past research has suggested that BA’s membership is driven either by the logic of service or

the logic of collective influence (associations lobby on behalf of businesses’ interests when

the Government examines issues about industrial policy, environmental regulations,

international relations and transport). Nevertheless, BAs can also provide unique

opportunities for businesses to engage in collaboration with other businesses (Perry, 2007).

Among the different ways that BAs can use to favour inter-firm collaborations (i.e. meetings,

seminars), a special attention is here devoted to their direct participation in business networks.

So authors analyse BAs that actually become an active network’s member.

In order to identify networks involving BAs, the database of Italian Chambers of Commerce

has been searched, where a specific form of formal networks is recorded: the NC. Considering

all 678 NCs signed up to February, 2013, only 20 of them (about 3%) are characterized by the

presence of at least one formal association, representing a structured group of manufacturing

and/or service companies, with national relevance. In fact, looking at networks members, only

in minority of cases it has been possible to detect the presence of a BA with national

relevance (usually its local unit or a branch specialized in providing some services).

BAs involved in NCs represent businesses of a specific geographical area. They operate at the

local level but are guided by a national body - called confederation - that coordinates all local

units5. Their aim is to support the economic activity of members, provide value-added

services to them, but also to dialogue with local and national political and administrative

institutions to favour economic, social and cultural growth of the enterprises.

Although also consortia can be defined as a form association which groups enterprises with

similar characteristics and common goals, these have not been considered in this study. First,

because consortia are not easy to identify (their name does not always reveal the presence of a

networked group of enterprises). Second, consortia are small associations that do not belong

to a national system (they do not have a national organisation representing them). Their main

objective is to create shared services for their members, favour members’ collaboration and

establish external relationships. Compared to local BAs and their confederations, consortia are

less involved in defending the general interests of the industry towards public administration,

fiscal authority and trade unions.

Empirical data indicate that organisations belonging to the Confederation of Italian Industries

are the most involved in NCs. 12 of them directly participate to one or more NCs. Also

organisations belonging to the Confederation of Small Enterprises are quite active: 4 of them

are members of different NCs. Probably this result reflects the large number of local units

belonging to these two confederations but it may also be related to the type of businesses

associated. In fact, self-employed people or very small businesses may prefer informal

cooperation and perceive too costly participating to a formal agreement that requires

professional assistance (usually a solicitor and a notary) like the NC.

5 In Italy the most famous confederations are: the Confederation of Italian Industries (Confindustria), the

Confederation of Small Enterprises (Confapi), the Confederation of Craftsmen (Confartigianato), the

Confederation of Trade enterprises and Self-employed (Confcommercio) and the Confederation of Cooperatives

(Confcooperative).

A brief description of the 20 NCs is provided in the Appendix. The table reported indicates

that the first NC involving a BA has been signed in July 2011, two years after the enactment

of the law. This may suggest that business organisations have not immediately interpreted the

NC as useful or that it was initially designed only for traditional for profit enterprises.

Looking at the number and geographical location of networks’ nodes, it is possible to find

both very small networks (with only two members) and groups with ten nodes. A higher

number of nodes is not associated to a geographically wider network. Moreover, in the

majority of cases (in 13 NCs out of 20) the size of the network is limited to one single region.

Another interesting information refers to the number of BAs involved in each contract. Data

indicate that these 20 NCs can be classified as:

- business networks (5 contracts), mainly composed by industrial or trade companies.

- institutional networks (15 NCs in total), composed only by BAs.

In the first group, the presence of one or two Bas - analysed together with the governance

rules that administer these networks - suggests that associations have a residual role.

Considering that each node of the network has usually a representative in the network’s

common body and the Head or President of the common body is the deputy of an enterprise, it

is probable that the involved BA plays the role of the facilitator or it provides advices to all

other network’s members. In other terms, information derived from NCs indicates that the BA

represents only one minority partner of the network, eventually providing some administrative

or other types of services.

Networks of the second group represent aggregations among local BAs. Most of them are

associations belonging to the same confederation. Thus, the aggregation is mainly made to

create synergies and reduce costs, balancing advantages and disadvantages of

decentralization. In only two cases, networks nodes belong to different confederations.

Reported network’s strategic objectives denote that BAs or their branches essentially create

formal networks to increase internal efficiency and develop the business of selling services to

members and non members. The most recurrent objective is commercial expansion of

network’s nodes (e.g. expansion in the field of training, internationalisation, finance

counselling) by exchanging customers’ information, developing new services in common and

promoting the network to enterprises not affiliated to any BA.

In addition, BAs organised in networks aim to increase knowledge and capabilities of their

internal staff (e.g. through the exchange of information and best practices among nodes) and

improve their ability to access to public funds. Only in three cases, it has been possible to

detect the formal goal and/or the program of favouring aggregations and creation of consortia

and NCs among businesses located in the geographical area of relevance.

Thus, it is possible to argue that BAs grouped into networks do not seem to be strongly

committed to play the role of ‘network incubators’, which means favouring the creation of

networks among their members. They have the opportunity to increase the diffusion of new

organisational models of collaboration that change the direction and flow of organisational

activity of enterprises. However, objectives (at least formal ones inserted in the contract) do

not emphasize this direction.

4.2. Firms’ attitudes toward collaborations and the role of business

associations as facilitators to networks creation In order to understand the role of BAs in encouraging collaboration and NCs among firms, a

questionnaire survey was carried out involving a group of Italian businesses. The

questionnaire was distributed during a meeting to set up matches (from here on MM will be

used for matching meeting), held in Pesaro (Marche Region, in central-eastern Italy) in May

2013. An Italian BA with several local offices organised the meeting. The purpose of the

meeting was to offer businesses an opportunity to meet and know each other, to find new

partners to develop new projects or possible customers. A total of 158 enterprises, mostly

located in Pesaro province, attended the meeting. The questionnaire consisted of 14 questions,

mainly closed-ended questions, intended to obtain information about: 1) Business profile:

size, industry, etc. (5 questions); 2) Role of BAs in promoting and favoring collaboration

between firms (8 questions); 3) Firms attitudes and involvement in NCs (9 questions).

A total of 146 questionnaires were distributed and 112 questionnaires were returned and duly

completed. The response rate was very high, 77%, mainly thanks to the fact that two authors

of this study distributed the questionnaire and attended the meeting throughout the day.

Results from the questionnaire survey are outlined below.

Enterprises responding to the questionnaire have been classified according to the European

Union dimensional parameters6. They are mainly micro-enterprises (53,35) and small-sized

enterprises (30,8%). Mid- and large-sized enterprises are less present (respectively 7,5% and

8m,4%) consistent with the characteristics of Marche Region’s economic system.

Businesses are mainly (70%) independent. Only 30% of them are part of corporate groups.

Enterprises operate in very different business sectors. The most represented sector is manufacturing

(29,5%), followed by professional consulting (18,8%) and by information and communication

businesses (15,2%) (Fig. 1).

Fig. 1 – Business sectors

The central part of the questionnaire has been devoted to the role of BAs in promoting

cooperation between firms. To do this, respondents were first asked to express on a 5-point

Likert scale their opinion about BA’s ability to carry out this role. Answers reveal that about

50% of the respondents express a strong belief about the possibility that BAs can foster

cooperation between firms. There are however many respondents that are less convinced

(26.7%). Around 16% of respondents express a very negative opinion.

In the respondents opinion the most effective initiatives to foster collaborative relationships

between firms are organisation of meetings between associate entrepreneurs, cited by more

than half of respondents (54%), and technical workshops (46%). The former are “generic”

meetings among entrepreneurs, open to any association members to discuss various issues

related to their business and the association. Technical workshops, in contrast, are organised

to address specific issues that are controversial, critical, relevant and urgent. Technical

workshops often involve external experts. In the opinion of respondents, therefore, workshops

6 Recommendation of the European Commission 2003/361/CE of May, 6 2003.

specifically devoted to inter-firm collaboration issues – e.g. technical solutions to create

partnerships – are considered particularly useful and effective. Other useful initiatives are

training courses (44%) and MMs (40%) (Fig. 2).

Fig. 2 – Business associations’ initiatives to promote inter-firm collaboration

It is interesting to note that MMs are only fourth in the list of activities to promote

collaboration between businesses, even if they are events primarily aimed at encouraging the

meeting, exchange and collaboration among the participants. During these events, in fact,

entrepreneurs, professionals, consultants, etc. have the opportunity of one to one meetings

with other participants in order to exchange experiences, share projects and find partners to

create joint initiatives. The views expressed through the questionnaire suggest that these

events are not very common and not very well known by the entrepreneurs, who do not have

sufficient information to assess their actual effectiveness. Another possible explanation is

negative feedback from previous MM.

Indeed a significant percentage of entrepreneurs (42%) did not participate in previous MMs.

And not everyone who has already participated in other MMs expressed a positive opinion

about their usefulness. In fact, only just over a third of respondents think that these meetings

have been useful in facilitating the creation of partnerships between businesses. 45% of

respondents are more doubtful and the remaining 20% have a negative opinion.

Those who have benefited from participation in previous MMs have succeeded in starting

joint projects with other enterprises, mainly:

- marketing and commercial projects (42% of respondents);

- innovation and R&S projects (28% of respondents);

- internationalization projects (19% of respondents).

The entrepreneurs’ opinion about the MMs changes radically when you ask them to evaluate

the usefulness of the specific initiative in which they are involved at the moment of the

survey. More than 72% of the respondents, in fact, believe that the meeting in which they are

participating is helpful to promote collaboration between companies. Only 7 out of 100

respondents express scepticism (Fig. 3).

Fig. 3 – Do you believe that this kind of events is helpful in fostering inter-firm collaboration?

(1= Absolutely NO; 5 = Absolutely YES)

These contrasting opinions may arise from businesses’ confidence towards "their" BA, while

they show a greater scepticism about similar events organised by other entities. However, it is

possible that their positive response has been conditioned by the belief that their BA

organised the survey. The respondents, however, were clearly informed that the research was

The role of business associations in promoting networking. The Italian case of the “network...

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