362 ENTREPRENEURSHIP
rials (for a fee) and report back to the supplier how the material holds up under various
real world operating conditions (an advantage for the supplier). Like the confederate
form, the conjugate form is a task-oriented, tightly coupled, and voluntary relationship
in a weak-tie network.
By working together, conjugate networks can do things they could not accomplish
alone. For example, in Indiana a network called the FlexCell Group connects makers of
metalworking patterns and tools with mechanical engineers, producers of plastic injec-
tion molding, a prototype machine shop, and a contract machine shop. All the members
are independent companies with annual sales of less than $10 million each. The result is
a vertically integrated, virtual single-source supplier. Tom Brummett, owner of the
Columbus, Indiana, firm that supplies the network with marketing and management
services, says that FlexCell “can offer its existing customer base more capabilities and
quicker turnaround time, usually with more cost effectiveness. This is a way for small
and medium-size companies to leverage their resources to compete in a global econo-
my.” Recently, FlexCell beat out two large multinational corporations from Europe and
South America in its bid to produce engine components for a U.S. customer.^63
An agglomerate network, or agglomeration, is a set of indirect relationships
between competing firms. It provides the firms with information about the capabilities
and competencies that are regarded as necessary but not sufficient for success. Control
of the network is maintained by dues and membership rules. Trade associations, for
example, are agglomerate networks. They usually exist in highly fragmented and geo-
graphically dispersed environments populated by very small, homogeneous ventures,
such as retailing and small farms. These networks are loosely coupled, voluntary, and
have a low-task structure: No single member of the agglomeration can influence another
member to do anything.
An organic network is an indirect relationship (indirect in terms of the business, not
the individual entrepreneur who represents the firm) between non-competing organiza-
tions. These relationships are not task-oriented and may consist of strong-tie linkages,
such as friendships and close business connections, or weak-tie links such as chamber of
commerce or professional association membership.
The four types of networks are defined by the way they integrate the two dimen-
sions—compete/cooperate and direct/indirect—to produce the two-by-two matrix
shown in Table 9.1.Partner Selection Criteria
Choosing a partner for a joint venture, for an alliance, or even for one of the shorter-term
relationships just discussed is crucial for the entrepreneur.^64 A poor choice can doom not
only the joint venture but the entire enterprise. Three primary criteria must be met:
1. The potential partner must have a strong commitment to the joint venture.
2. The top managements of the firms must be compatible.
3. The people involved must have had previous positive experience in the trenches.
The first criterion must be met if the firms are to have a mutual sense of responsibil-
ity and project ownership. If one side believes the venture is unimportant, it will allot it