SMEs’ Network-based Growth, Relational Embeddedness And Structural Change

With the development of high-tech information and no-boundary competition, the model changed from single corporation competition to inter-firm network competition, the "low cost, low income, low profit" model could not maintain SMEs’ survival. SMEs were in the situation where they don’t have enough basic resources and strong competitiveness for existence, then network-based growth through cooperation with other organizations became the only way for SMEs to survive and even develop. However, as a new entrant of the network, SMEs were always on the edge, which make SMEs could not survive or develop through networking. This had formed a paradox.Based on the analysis of network-based growth theory, relational embeddedness theory and structural change theory, this paper formed three propositions where the relationships between these three theories worked as the main content. On the research of SMEs’ networking survival in the reality, this paper believed SMEs could move from the edge position through relational embeddedness and structural change to realize network-based growth, this paper also formed ten separated propositions of "relational embeddedness-- structural change--network-based growth" path,then it built a conceptual model. Through the analysis of ten SMEs from the North, this paper got the similarities and differences of network-based growth path. The main propositions were verified ’pass’, with two of the separated propositions not verified.The exploration of network-based growth path which based on the network-based growth theory, relational embeddedness theory and structural change theory, gave the network theory a new angle where SMEs worked as the main character, simultaneously it gave SMEs that faced with different dangers and difficulties a new path and also strategy to survive and develop. This paper believed that first SMEs needed to know its stations and location, then on the base of environment analysis and competitors’analysis, SMEs had to weigh the costs and earnings to finally decide if it would step on the network-based grow path.