Developing a relational capability construct for SME network marketing using cases and evidence from Irish and Finnish SMEs

SME relational marketing and SME networks have been widely prescribed in the literature. Defined as a series of interactions between interconnected parties in a relationship, the network approach is a philosophy which relies on mutual cooperation, collaboration and the process of building trusting relationships. However, this thesis argues that the process through which individual actors interact and are connected in networks remains under-explored. With the evolution of relationship marketing and networks as a basis for SME marketing the researcher contends that a need exists to define the capabilities necessary to conduct relationship marketing successfully in a network context. This process and such capabilities are termed ‘relational capability’ and address a gap in the literature. This thesis identifies the relational capability construct inclusive of its six dimensions; realisation dimension, assessment dimension, access to knowledge dimension, access to opportunity dimension, co-adaptation dimension and co-innovation dimension. The dimensions are defined and structured through the application of the Actor-Activity-Resource (AAR) model of networks as depicted by the International Marketing and Purchasing (IMP) group of researchers. The applicability of the AAR model in the structuring of the six dimensions of relational capability is justified due to its role as a descriptive tool designed to detail the three substance layers of an industrial relationship. Additionally, based on a comparison of alternatives, the theoretical lens selected to view this research is social exchange theory due to its focus on embeddedness, reciprocity, and its ability to embrace the social elements of relationships and networks. Therefore, the utilisation of the theoretical lens of social exchange theory enables the researcher to better understand the behaviour of individuals within a network setting. Eight small to medium sized enterprises (SMEs) were selected and analysed from both an Irish and Finnish context for the purpose of this study. The empirical research, from an Irish perspective, entailed an intervention case study approach to action the relational capability dimensions to assess theory fit to practice. Semi-structured interviews were employed in both an Irish and Finnish context. The research is interpretive, placing more concern with gaining an in-depth understanding of the participants in a network setting with the assumption that the view will be context and time specific (Wainwright, 1997). Through the power of the interpretive paradigm, the aim of this research is to illuminate new perspectives on established concepts such as SME relationship marketing and networks. Overall findings support the appropriateness, applicability and potential of the conceptualisation, inclusive of its six dimensions, as a vehicle to enhance SME marketing. From an Irish perspective, realisation and assessment were low highlighting that misconceptions existed amongst the SMEs regarding the nature and dynamics of networks whereby they were viewed as a predominantly social structure. Conversely, the Finnish participants viewed networks as interconnected business relationships continually operating in close collaboration with other stakeholders within their business. Regarding the access to knowledge and access to opportunity dimensions of the conceptualisation, findings highlighted that both the Finnish and Irish SMEs had accessed valuable knowledge and opportunities through their networks of relationships. Consequently, as the study progressed, it was clear that the Irish participants were starting to appreciate the value of operating through networks, and as such, their attitudes towards the network process improved. The disparities were significantly lower between the two contexts in terms of co-adaptation and coinnovation as all of the participants relied on relationships to facilitate such processes. However, one of the major differences remaining between the Irish and Finnish participants is in their attitude towards their competitors. The Irish SMEs seemed to have very strong firm boundaries in place, an individualistic culture, whereby relationships with the outside world were limited by necessity in terms of sales and supplies. The relational capability construct and its six dimensions represent the theoretical contribution to knowledge for this research. The relational capability construct identifies the process of SME network activity, research which has not previously been undertaken. From a managerial perspective, findings from the study support the view that the relational capability construct is one way of addressing the resource/time pressure on SME marketing practitioners through providing them with marketing route-ways through their existing and potential networks. In terms of SME network policy, key implications and recommendations are offered. The researcher recommends that ensuring a full understanding of industrial networks and its dimensions be at the core of any Irish network/entrepreneurship programme to guarantee the maximum derivation of benefits. Additionally, the researcher recommends that academic institute employ a collaborative style model in Ireland to enable the academic institutes to play a more active role in the operations of the Irish SME and create a more positive attitude towards partnership/collaboration