Industry Peer Networks (IPNs): Cooperative and competitive interorganizational learning and network outcomes

PurposeThis paper aims to examine a type of interorganizational learning called Industry Peer Networks (IPNs), in which a network of non-competing small businesses cooperates to improve their skills and to stay abreast of the industry trends, so that the firms remain competitive in the local and regional markets. The key characteristic of an IPN is the regular gathering of peers in small groups (typically 20 or fewer carefully selected members) in an atmosphere of significant trust, guided by a facilitator, to participate in a series of formal and informal activities through established guidelines, to share knowledge about management and marketing, exchange information about industry trends beyond their core markets, discuss issues related to company performance and provide constructive criticism about peer companies.Design/methodology/approachThe qualitative research on the context included visits to 13 peer meetings, three workshops for peer members, seven semi-structured interviews with members and many communications with the founder, chairman, committee chairpersons and several facilitators of peer meetings that spanned across five years. Data collection and analysis followed grounded theory building techniques.FindingsThe authors identified both cooperative and competitive learning practices that a small business could carry out to grow from a novice to an expert IPN peer member. The cooperative elements such as peer discussions, disclosure of financial data and exposure to various business models allow member firms to learn vicariously through the successes and/or failure of their peers. At the same time, the competitive elements such as service delivery critiques, business performance benchmarking and firm ranking also prompt the members to focus on execution, to emphasize accountability and to strive for status in the network. The IPN in this research has also built network legitimacy over time, and it has sustained a viable administrative entity that has a recognizable form and structure, whose functions are to strategically manage network activities and network growth to attract like-minded new members.Research limitations/implicationsFirst, because this research focused on fleshing out the transformative practices engaged by IPN peers, it necessarily neglected other types of network relationships that affect the small businesses, including local competitors, vendors and customers. Second, the small employment size of these firms and the persona