Communication Flows In An Sme Network: The Cisi Consortium Case

Networks have been hailed as a third organizational form, between markets and hierarchies. One of the main characteristics of networks is the coexistence of personal and professional relationships. This coexistence modifies the development of economic activities; strategic decisions are largely influenced by the presence of trust between network members. This chapter investigates the role played by personal relationships in enabling the diffusion of innovation within networks. We address the following research questions: How do the different types of relationships in a network of SMEs enable the diffusion and adoption of innovations? Furthermore, do personal relationships play a central role in supporting innovative activities? Based on interviews with managers of SMEs in a consortium of Italian firms, we conclude that interaction between personal and professional relationships shapes a unique context that alters the usual dynamics of innovation diffusion.