Miles and Snow (1986) show that the division of
labor allows network members to specialize in the valuecreation
activity based on a comparative advantage.
Along this line, Park (1996) argues that networks are
useful as they are “used as a connecting and transferring
mechanism of complementary and interdependent competence”
among members. This is possible as networks
benefit from specialization based on the relative strength
of each member and from the economies of scope.
Grandori and Soda (1995) also stipulate that the “efficiency
properties of firm networks... (derive) from
economies of scale, scope, and specialization and experience”
are important assets for networks. For instance, in
the case of networks prevailing in policy circles, it is the
economies of specialization and experience that provide
important justifications for existence. Moreover, networks
reduce uncertainty by establishing more meaningful
and interdependent relationships among constituents.