Firm Network Based On Core Competence

Enterprise theory is one of the current economics focuses, while firm network theory is the newest theoretical concept. Many unknowns on the concept still exist. But up to now, firm network theory is not mature. Only a small sum of researchers engage in this field who seem only to be interested in the description of the phenomena of firm network and have not applied the current enterprise theories to the explanation of the profound problems, such as the nature of firm network. The study on the nature and the operation mode of firm network will enrich the enterprise theory today. There are three sections in this paper. Chapter one includes three parts. Firstly it introduces the notion and analysis of core competence; secondly it analyses firm network and correlational theories; lastly the concept that firm network based on core competence is put forward. In chapter two the nature of firm network is put into light combined with transaction cost theory: it is an efficiency harmonization of core competence. Chapter three discusses the operation mode of firm network and analyses the Silicon Valley which provides demonstration of our study on firm network.