Influence of SMEs’ Network Competencies on Tourism Industry Performance

Abstract

The chapter explores the role that network competencies has on the performance of SMEs working in the tourism industry in Tanzania. This chapter incorporates network compete as one among the factors that influence SMEs’ performance with a particular focus on tourism industry. This is geared from the role network play on enterprises’ competitiveness which has long been of interest in performance literatures. The debate raised by the transformation process from network dynamics in literatures has been reviewed by extant authors to be a model that many SMEs adopt in order to increase their competitiveness in a business networked environment. While networking is viewed as a supporting tool for enterprises’ success in Sub-Saharan Africa, the sustainability of enterprises is revealed by literatures to be low which provides a room to consider network competence as a new approach in illustrating why certain SMEs perform better than others with a particular focus on SMEs working in tourism industry. Network competencies as a firm-specific ability to handle and exploit inter-firm relationship, is grounded on the reality that there are substantial differences on firm’s ability to deal with network relationships a patterns which motivates a need for considering the significance of network competence in an emerging market context such as tourism industry. For that matter, SMEs have not been effective in implementing network relationships particularly in tourist although some literatures indicate the existence of relationships between network and firms’ competitiveness. Using quantitative approach findings indicate that, SMEs’ cooperation with agencies, competitors’ relationships with SMEs, SMEs’ networking with governmental institutions and on time feedback from customers have a significant influence on tourism industry performance. However, this research provides that, not all networked SMEs equally do well, others do not. To some extent, this is attributed to the context where SME operates that normally describes the extent to which inter-firm relationships are gratifying toward firms’ performance.