MANAGING INNOVATION NETWORKS IN THE INDUSTRIAL GOODS SECTOR

Inter-firm networking can facilitate new product development but "[…] it is not a panacea for success" (Harris et al., 2000:229). This article is not concerned with the potential of in-house innovations but tries to reinforce network innovation as a worthy alternative, if managed appropriately. Our research includes the spread of the interaction oriented network approach to innovation literature. Relying on this literature, we hypothesize that balanced network management enhances network retention by facilitating partner selection, resource allocation, regulation, and network evaluation. Balanced network management thereby increases the network retention of the innovation network participants. Our empirical results support our hypotheses. These findings imply that balanced network management affects innovation network retention. For this reason, innovation literature should include a detailed investigation of the four network management functions' effects on innovation network success figures, such as network retention. Assessing network stability and social interaction within innovation networks might allow a better understanding of underlying retention mechanisms in the innovation network context.