Network partner diversity, which is the extent to which a firm possesses diverse network partners, could be beneficial to firms. Increased levels of network diversity, however, may result in declining sales growth. The study proposes that network capability can help manage the scope of diverse relationships effectively and by doing moderate inverted U-shaped relationship between network partner diversity and sales growth. Building on survey data and prospective five year sales growth data from archival sources, the study finds that an increased level of network diversity has a negative effect on sales growth, but network capability moderates the relationship.
- 512 Business and Management
- Alliance management capability
- Inter-organizational relationships
- Nonlinear relationship
- Small firms