Standards or incompatability
In technology industries many firms compete on the basis of establishing their product as the industry standard and, hence, highlight the importance of early mover advantage. However, this is not the only strategy possible. Competitive strategies that seek to develop a level of co-operation may sometimes be more suitable. If compatibility is overwhelmingly important, requiring vendors to agree on a standard, then it might not be preferable to spend potential profits on a standards battle. Low-cost licensing to permit use of each party’s technology or the development of a hybrid standard that combines the different technologies are two options. 

When one firm is powerful, such as having a large customer or installed base, a particularly good technology or a powerful reputation for setting standards, it is more likely to prefer incompatibility than its smaller rivals. It can resist compatibility and imitation by asserting intellectual property rights or by changing technologies frequently. Although these approaches to competitive dynamics appear to be in conflict, the clash is more apparent than real.

• It is a matter of timing. At any one time, firms will be attempting to secure longer-term value-generating relationships with some market participants, while simultaneously pursuing short-term gains against others.
• It is also a matter of industry structure. Some industries offer considerable scope for value generation through co-operative relationships and partnerships, others offer little.

The complexity of modern networks
The lack of clarity about who are partners or collaborators is often compounded by the complexity of collaborative arrangements in practice. The sheer scale of networking activities is one aspect of this. Many organisations are involved in multiple alliances. One major electronics manufacturer, for example, is said to be involved in around 400 strategic alliances. Clearly, even with the most coherent alliance management practices, no individual manager is likely to know which partner organisations are involved. Obviously, multiple alliances must pull the organisation in a variety of different directions. As one senior manager in a division of a multinational computer hardware manufacturer put it:

"We have separate alliances with two companies (worldwide operating system providers) that are in direct competition with each other ... there is a lot of conflict within the company over these alliances ... the people involved try to raise the importance of theirs."

In addition to the volume of relationships, there is frequently complexity in the networks of relationships between organisations. For example, the complexity of interacting supply chain networks – in which every supplier has multiple customers, every customer has multiple suppliers, and suppliers have suppliers and customers have customers – is potentially infinite. Many networks of collaborations are, in addition, hierarchical in the sense that collaborations are members of other collaborations.

What is clear is that in the twenty first century, networks are a fact of life for many organisations. The successful ones use them as leverage to the achievement of organisational goals.

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