This strategy is not only focused on achieving high profits through banking with foreign customers, but also to enable all customers have equal access to the benefits of international network conveyed by banks (Lindstrand 2003). Function and value of international business networks International business networks acts as formations through which firms learn in form of social exchange to co-operate and co-ordinate their activities globally. The capability of firms to interact increases their accessibility to, transfer as well as integration of knowledge that reside both inside and outside such firms.
Research indicates that through the use of experience to run a business in a given market creates new opportunities which result in extended international activities as well as new and practical experiences. Therefore, resource commitments facilitate a deeper understanding of a market and the foreign customers of specific firms. This clearly indicates that a firm’s sustained international business operation depends on its previous business and market experiences. The gained experience can as well be applied in the continued business internationalization (Richards & Carson 2006).
According to Chetty, Eriksson and Lindbergh (2006) knowledge on foreign countries is achieved easily than experience about a particular business relationship. It is apparent that gained experience serves as a model for continued business expansion. Thus, experiential knowledge is a critical resource when firms, particularly Small Medium Enterprises (SMEs) consider internalizing their businesses. Lindstrand (2003) examined that the relationships created with the business network are vital assets for the firms involved since they reflect the daily interactions such firms make with their network partners.
As a result, individuals in such firms learn how to manage their business operations within the international markets. By interacting as well as operating business within the foreign market networks, firms in particular SMEs learn where to obtain, commit resources and determine which firms to connect with. Therefore, business networks provide experiences that are not only used to minimize uncertainties and risks, but also create opportunities for business expansion. It is important to note that knowledge generation within business networks is a requirement for and positively affects the performance of firms and their sustained international expansion (Blomstermo et al., 2004). The Tourism Virtual Business Network Model With the introduction of the internet, information technologies and developments within the field of e-commerce, a concern is no longer given on the existing traditional limitations and barriers.
As a result, small or medium sized businesses are competing nowadays within global markets. Such businesses develop into groups known as the business networks so as to further advance both their internal and external capabilities and reach. “Through business network, actors become autonomous and connected to each other in form of flexible relationships that may change in accordance with the fast changes within the business environment” (Micela, et.al. 2002, p.89). Today, organizations are moving, or forced to shift from the relatively stable as well as slow-moving business networks, to more open digital platforms.
This enables most of the business to be conducted across the rapidly formed networks accessible worldwide despite different complexities associated with the various business processes and computer systems. Much of the work on tourism development is forecasted on the successful implementation of organizational alignment through business partnerships or networks. Tourism networks, however, have been comparatively neglected as a field of academic study (Morrison, Lynch & Johns 2004). Davenport-Hines discovered that “The Nathan Brothers preferred to operate their international trading in form of ‘kissing kin’, and thus had a bewildering network that comprised of cousins as well as connections through marriage where they related to some loosely-defined agencies that carried generous commissions” (pg.141-2).
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