The document discusses challenges in managing networks, partnerships, and clusters. It presents a research model examining how different combinations of elements like purpose, sector, and life cycle stage affect suitable management approaches. The author argues management must adapt to trends like increased complexity, virtual communication, and shared knowledge sources. New questions are raised about transferring management practices between different partnership forms and whether governmental initiatives support necessary future management methods and tools. Overall, the document examines how to best guide companies on suitable networking/partnering strategies and manage networks through different development phases.

1. Development Challenges
in
Networking/Partnering/Clustering
Management
Author:
Irena Rezec, M.Sc., MBA
WOTRA, Ltd.
November 25, 2010
Paper written for the 13th
TCI Annual Global
Conference,
held in New Delhi, India from 29 Nov – 3 Dec 2010

2. My path through university and career has brought me to the
development of information systems and related organisational as-
pects, the development of business support services at national or
governmental, European and international level, international and
business support network’s management, all the way to the consult-
ing services in my own company where I am
interconnecting all the skills and knowledge I have received so far. I
soon, realised that the networking/partnering/clustering
approach is of extreme importance for competitiveness, however
only with a duly selected form or type of networking/partnering/
clustering in relation to a specific problem or vision of a company,
and at the same time with the right management which considers
both the different aspects of networking/partnering/clustering as
well as the trends in the environment, and together with this also
introduces suitable methods and tools used among individuals in a
selected connection. In practice, numerous combinations are of
course established, and the influence alone of these combinations
on management or even development of suitable tools has not yet
been systematically researched. My experience as well as the
interim results of research work, shows that different
combinations of the elements evident in the graph presented
below (Figure 1) substantially affect the selection of suitable
management, and all together affect the final success of any
networking/partnering/clustering forms.
1

3. These and other questions are hiding in the research model you can
see in Figure 1, where I am trying to systematically deal with the
topic of networking/partnering/clustering management, and most of
all confirm or negate some basic hypotheses, among others:
• every problem in a company can be solved with a suitable
model of networking/partnering/clustering and corresponding
management approach;
• governmental initiatives do not meet the trends;
• an exchange of experience, knowledge, tools, good practices,
training programmes among individual different types of net-
working/partnering/clustering is necessary to better understand
the advantages and weaknesses of individual types, and to im-
prove the existent tools, training programmes and manage-
ment approaches.
2

4. I will use the following graph (Figure 1) as the basis:
3
Figure 1: Research Model – Dynamics of Networking/Partnering/Clustering Management

5. Companies face the issue or search for suitable ways to reach their
goals, strategies and visions on a daily basis. Networking/
partnering/clustering is without a doubt one of the strategies that
can be used in various cases for various purposes. However,
a company usually does not possess such knowledge on the
appropriate networking/partnering/clustering form or later the
implementation. Governmental support usually refers either to
clusters or technological platforms, while the other forms are
practically not promoted. This is appropriate in certain cases, but
from the viewpoint of consultants and companies, this is at the
same time also a “trap”, as especially small and medium-sized
companies do not decide at the same time or only also for other
types of networking/partnering/clustering, which might be even
more appropriate for their own cases. I believe that the appropriate
form or perhaps more forms of networking/partnering/clustering at
the same time, as well as management adapted to this has a truly
important influence on the development or even competitiveness of
an individual company or a group of connected companies.
I tried to summarize a few types of problems or strategies of
companies, and different types of networking/partnering/clustering
approaches, which in my opinion significantly contribute to solving
evident problems in the left side of the Figure 2.
4

6. Problems and/or visions and dreams and related reasons &
expectations vs. Networking/Partnering/Clustering approach
and management & leadership practice
strategic partnership
strategic alliance
cluster
industrial district
knowledge district
technology platform
consortium
joint venture
cooperative
value chain
public : private partnership
extended enterprise
business network
knowledge network
learning network
network of excellence
subcontracting
association
economic interest group
on-line communities
megacommunities
capital
new markets
new jobs
sustainable development
profit
research, production or
knowledge capacities
economy of scale
innovativeness
diversification of products
and services
access to knowledge
new communication and
marketing channels
business growth
user demands
time pressure
social responsibility
green
complexity
company
BSO
government
consultant
crowdsourcing networlding
collaborative leadership and management
collaborative working space open leadership
open innovation flat world borderless business
interclustering inter-organisational collaboration
Figure 2
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7. We also meet terms or perhaps modern strategies connected with
networking/partnering/clustering trends, such as crowdsourcing,
collaborative leadership and management, flat world, borderless
business, open innovation relationship, open leadership, etc. All
these terms would not exist if networking/partnering/clustering
approaches of different kinds would not have become so essential.
The question for us – consultants, the business support
organisations or government is whether we support or train
companies appropriately; or whether individual governments offer
suitable initiatives for cooperation without too many limitations and
beyond known borders. I am convinced not enough. Already the
first analysis of governmental initiatives shows that there are many
limitations among individual calls for proposals criteria. If I mention
only structure and type of partnership, which is usually required, it
seems that companies are very limited as regards the possible
structure of partnerships. Therefore, my belief is that companies
with »innovative« partnerships would gain competitive advantage,
does not work here, as partnership’s innovativeness is simply not
possible in most cases.
6

8. The next question arising in the process of networking/partnering/
clustering is connected to various aspects of networking/
partnering/clustering, which I classify in general managerial
aspects (e.g. legal-formal, financial, HR, etc.), and numerous other
aspects, among which are regional, sector-based aspects and the
aspects connected with the basic purpose of networking/partnering/
clustering, i.e. the interest or economic aspect, innovation aspect,
knowledge-sharing aspect, perhaps the aspect of
internationalisation, etc. This is actually the central element of
connecting, which originates from the purpose of networking/
partnering/clustering, also substantially affects the selected
networking/partnering/clustering form, networking/partnering/
clustering management, the selection of methods and tools, and
others.
From the management viewpoint, it is primarily important whether
the core purpose of networking/clustering/partnering is an exchange
of information only, or also joint product development and
marketing. In the first case, the activities attached to a network's
coordinator or manager are more similar to the activities of
non-profit and/or public business information centres, and
consequently one form of non-profit organisations is perfectly
suitable for management of the network; while in the other case, a
professional business management and profitable type of network
form is required.
7

9. If we also analyse the needs for the appropriate management style
and the necessary types and levels of management and their
profession or the necessary methods and tools with regard to the
current phase of the life cycle of networking/partnering/
clustering development, or if we also analyse the trends in the
environment for all previous elements of the model or trends in
relation to the selected combination, we perhaps get the
recommended business, organisational and managerial model and
the recommended methods and tools.
Especially in the initial phase or the critical development phases, or
during the introduction of new projects, facilitating, moderating,
strategic thinking, and foresighting, for example, are key values of
management team. However, under stable circumstances of the
functioning of a network, other characteristics come to the fore.
When speaking about network/partnership/cluster management
dynamics, a manager with multifunctional skills or even better a
multidisciplinary team, where roles of individuals and their
importance alternate in the dependence of an individual combination
of circumstances attached to an individual period of time, should be
sought.
Let me indicate some of the trends which I believe have an
important influence on the types of networking/partnering/
clustering as well as the management of companies and the
management of an individual network/partnership/cluster.
8

10. I have used the symbol of pyramid to present the trends, which
perfectly symbolizes the natural or universal law of evolution. For
the initial basis of reflection, I used the so-called knowledge
pyramid “From Data to Wisdom” (left-sided pyramid of the Figure 3
and 4), which is often used in connection with intellectual services,
especially with information and knowledge management sciences1
additionally upgraded and supported with the specific new pyramid
models (right-sided inverted pyramids of the Figure 3 and 4) to be
in line with the today and future trends. At a basic elementary level,
we process data, and immediately after adding some knowledge and
experience to this data, we can transform this into a piece of
information. Through the process of learning, and experience over
time, we transfer from the information society to the knowledge and
intelligent society all the way to the society of wisdom. Thus, the
natural law of evolution leads us through the phase of learning to
wisdom.
———
1
Left sided pyramid is in small varieties found in literature since 1989 or even earlier since
1934 based on David Weinberger review written in the recent blog of Harward Business
Review - Weinberger, David. URL: http://blogs.hbr.org/cs/2010/02/
data_is_to_info_as_info_is_not.html, (2010). [24.11.2010]. For the purpose of the topic
described in the paper some additional inputs to the basic model of knowledge pyramid
have been added as well as additional right-sided new pyramid models (see Figure 3 and
Figure 4) by the author of this paper to be in line with the today and future trends as well
as with the specific topic of this paper discussion.
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11. Complexity & InterDependency vs. Knowledge Source,
and from Physical to Virtual presence and communication
TRENDS
Figure 3
10

12. What about the complexity and what about our understanding or
seeing the dependence or interdependence compared to the source
of knowledge (right-sided inverted pyramid of the Figure 3)? We see
that in the basic elementary phase, the individual knowledge has
provided us with enough competitive advantages for development,
but the more our problems become complex and the more we want
to approach wisdom, the more we need global knowledge. When
accessing such knowledge, we have strong technological support
which also helps us transfer from the physical presence into the
virtual presence and ICT infrastructure enables us not only to
become a society of wisdom but also a virtual society at the same
time. In the virtual society, every person is a source of knowledge
and ideas, and together we form a global knowledge base which
might lead us to a type of wisdom, which we currently have not yet
experienced.
How should management adapt to the indicated trends, and do we
dispose of the suitable tools supporting the changes in managerial
approaches (right-sided inverted pyramid of the Figure 4)?
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13. Management Trends
TRENDS
Figure 4
12

14. In the basic elementary phase of development, we met the
autocratic management, and later information and knowledge
management. Nowadays, managerial approaches place social skills
to the fore, first of all in the sense of establishing and developing
different types of partnerships and cooperation. Many companies
have already introduced spirituality as an individual's value, and
social responsibility as well. This will be followed by strategies which
will recognise an individual's value in the sense of their contribution
to knowledge as well as development of a company and society. So,
will we in a certain phase be mature enough to also share ownership
of a product or service with clients or perhaps communities? And
will we be mature enough not only to exchange information and
knowledge with everyone but also to admit that the goods around
us are owned by all of us? Is this connected with the wisdom, which
we must reach? And, then will management be necessary at all?
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15. Researching combinations which originate from the research model
bring numerous new questions to light, as well as new development
challenges of the networking/partnering/clustering management, for
example:
• Can we similarly to technology transfers, where we can
successfully transfer technology even from one sector into a
completely new, seemingly non-complementary sector, develop
also a business, organisational or managerial model of
networking/partnering/clustering and related methods and
tools, which is transferred from one networking/partnering/
clustering form into a completely different networking/
partnering/clustering form even for a different purpose? So,
can we learn something from good or bad management and
other practices, good or bad training programmes, or applied
methods and tools introduced in strategic alliances, and
transfer part or all these experiences, good practices, methods
and tools to clusters or perhaps technology platforms,
cooperatives, etc. If YES, in which cases and in what way?
• In what way and which trends should be monitored, or which
are the trends that most affect the management and methods
and tools in a network?
14

16. • Which methods and tools will be necessary for successful
networking/partnering/clustering of companies or networking/
partnering/clustering management in the future, and do
potential governmental initiatives for the development of these
methods and tools meet the trends?
• In what way should companies, consultants and also those
offering governmental or other support to companies be taught
that the issue of networking/partnering/clustering is complex,
and that it therefore should also be treated this way, and that
professional management correspondingly qualified for
networking/partnering/clustering management is necessary
especially for some individual networking/partnering/clustering
forms or perhaps according to an individual combination of
elements evident in the Figure 1?
There are many other questions and development challenges
arising, yet all probably demand more managerial dynamics than
what we are used to.
15

17. Final thoughts to emphasize SMEs dilemmas
Are we aware of the large amount of expressions, connected with
networking/partnering/clustering, SMEs encounter on daily basis?
Are they clear on the differences between individual forms and
concepts, and are we clear on them to such extent that we can
undoubtedly advise them on which types of partnering/networking/
clustering approaches are the most suitable for them in a certain
moment? How to guide them as a business support organisation or
consulting company, and what kind of instruments or initiatives
should be introduced by the governments and with what purpose?
The media, authors of specialised publications, seminar and event
speakers as well as governmental representatives and others
guarantee benefits and also competitive advantages to the
companies from one or another form of partnering/networking/
clustering. During this, we constantly invent new concepts and
expressions, although we have not even assimilated the old ones
enough.
16

18. Based on discussions with companies and solving their daily
problems, it is evident that partnering, networking and clustering
are individual domains of an individual company. It is difficult to
expect from every company that it will gain advantage by
connecting into cluster or technology platform. We can recommend
to the companies one or the other or even more forms of
partnering/networking/clustering depending on their development
level and circumstances, their strategy and vision, their
management, and in certain cases even the sector and the
connected product or service. But we can do much more by training
them to:
• self-analyse their own company and environment;
• distinguish between the advantages and weaknesses of one or
the other form of partnering/networking/clustering; and
• manage networks in different life cycles of partnering/
networking/clustering.
In any case, we must allow them the creativity and innovativeness
in their process of partnering/networking/clustering. After all, are
not properly the “innovative” partnering/networking/clustering
models the ones that have brought advantages to certain individual
companies at the most?
17

19. The word about the Author
Irena Rezec has vast experience in delivering expertise and implementing complex technical assistance and
other assignments which focus on:
• SME development and related business support services;
• SME competitiveness through strategic management and organisation, internationalisation and networking/
partnering/clustering approach;
• Local and Regional Economic Development;
• ICT, information, knowledge and intelligence based services and tools for all the above mentioned domains;
• the monitoring of future trends for all the above mentioned domains.
After obtaining a university degree in organizational sciences with a specialisation in information systems, she
took up an MBA-master’s degree in international management. Her next formal level of education will be a
doctor’s degree in networking/partnering/clustering in the sense of managerial or strategic instrument of
companies to achieve higher competitiveness.
She began her career in the private sector – in software development companies and IT departments. She
joined the Ministry of Economic Affairs – Small Business Department (in 1993) and later on the Small Business
Development Centre as the Euro Info Centre’s Manager where she became familiar with SME development and
business support offered either on a local, regional, national or EU level. Since 2002 she is the managing director
of WOTRA, a private company, and has been continuously involved in the EU and other projects worldwide in her
areas of expertise in the role of senior expert, project manager, team leader, trainer, evaluator, and reviewer.
18

20. According to her extensive knowledge in various fields, as well as being involved in development programmes
and projects in different countries in the world, her plan is to become more actively engaged also in the
futurology in addition to efficient networking, partnering and cooperation models. At the same time, she plans to
examine closely, new management models and successful business practices, as it is more than obvious that the
existing management models should be substantially changed both in the private and public sector.
She is a member of:
• Enterprise Policy Group – Business Chamber at the European Commission – DG Enterprise and Industry;
• The Competitiveness Institute;
• Association of Management Consulting at the Slovenian Chamber of Economy;
• World Future Society.
More details on LinkedIn: http://www.linkedin.com/in/irenarezec
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