Adapted Management Techniques for Innovative Networks

The paper defines the typical features of the notion with the help of theoretical propositions concerning business network. These features should be taken into account while building horizontally integrated systems. The paper notes innovative networks as the next phase of Russia’s economic development after innovative clusters. Besides, the paper ascertains the organizational aspects for the formation of innovative networks based on the classification of economic entities and their strategic roles by the principle of mutual complementation. The authors use classical analysis techniques and planning methods adapted for the group of economic entities.


Topicality
In today's Europe, one can see that knowledge-intensive industries develop, information technologies spread and penetrate into in all spheres of social life and the global competition intensifies.In this situation, one of the main goals is to create an economy of knowledge which makes it possible, in authors' opinion, to achieve a sustainable development of society (Kulapina & Markova, 2006).The inputs become depleted during production in industrial economy, while information and knowledge as the main source of knowledge economy are not depleted but spread among all economic actors.Such phenomena as containment, isolation and limited area are significantly reduced in the economy of knowledge.So, the economy of post-industrial society is the network economy which is focused on the creation and dissemination of knowledge for innovative development (Markova, 2012).Hence, first it is necessary to analyze the scientific base of network economy and name its main features.

The Scientific Basis of Network Economy
Table 1 shows seven theories which form a scientific basis for network as an economic category.Each of them evolutionarily put its features into the definition.The exchange of social and material resources is a fundamental form of human interaction (Tretyak & Rumyantseva, 2003) George Homans-American sociologist and the representative of neobehaviorism 4 Institutional theory Economic entities adopted institutionalized social norms and values which influenced the formation of networks between enterprises (Boisot, 1986) M. Boisot 5 French agreement economy Individuals fulfill the requirements of norms not because it is an absolute determinant of their behaviour but to reduce the indefiniteness in interaction and, as a result, to achieve their rational goals (Menard, 1996) L.
Boltanski, L. Tevenot and C. Menard 6 Transaction cost economics Transaction costs appear when economic relations are established.In occasional once-only transactions on the market and in hierarchic structures, the whole set of such costs exceed similar costs in those networks where relations are already well-established (Coase, 1998) O.E.Williamson and R. Coase

Cluster theory
The system of interconnected enterprises the significance of which as a whole exceed the plain sum of constituents (synergy) (Porter, 1998) M. Porter If we generalize the theoretical propositions of network as a scientific phenomenon, we can notice that the first two theories deal with the exchange of material and non-material resources, the next three ones are connected with social norms and relations, and the sixth and seventh theories deal with the efficiency of these relations.These three main aspects can be traced further comparing different characteristics of the notion of business network (Table 2).
Table 2.The main definitions for the notion of business network Authors Characteristic

Beije and Groenewegen
A group of independent members each of whom is partly but purposefully involved into the activity of the whole group (Beije & Groenewegen, 1992) P. Kotler and

R. Achrol
Network organization is a coalition of interdependent specialized economic entities with their own goals (independent enterprises or autonomous organizations) which act without hierarchic control, but all of them are involved into the system with common goals through numerous horizontal ties, interdependence and exchange.The involvement is the main distinction of the network conception in comparison with the traditional theory of organization (Kotler & Achrol, 2000) Joel Podolny and Karen Page Any group of participants (not less than 2 men) which has repetitive long-term exchange ties between each other and, at the same time, does not have any body of power authorized to solve problems occurring in the course of exchange (Podolny & Page, 1998)

H. Hakansson
A set of subjects which do not depend institutionally on each other but act and/or control resources with a certain interconnection (Hakansson, 1992) J. Sydow and A. Windeler Networks are the long-term agreements between different but interconnected commercial organizations.So, they are an intermediate form between market and hierarchic forms of business organizations (Sydow & Windeler, 1993) C.Jones, W. Hesterly and

S. Bogatti
Network is a sustainable and structured set of semi-independent enterprises (and/or nonprofit organizations) involved into mutual relations and united by a common goal.
Relations in a network are aimed to streamline exchange relations between participants and promote their adaptation to changing conditions.Both formal and informal contracts form the basis for a network (Jones, Hesterly, & Bogatti, 1997) R. Eccles and N. Nohria Network organization is seen as an organic and constantly broadening structure which connects staff, enterprises and their consumers, suppliers and partners (Nohria & Eccles, 1992) F. Webster Network organizations are the corporative structures that appear thanks to many relations, ties with partners and strategic alliances.The main feature of network is a unity, an open and flexible coalition guided from a common centre with such important functions as the development and direction of alliances, coordination, financial management and technological progress (Webster, 1992) M. Castells Network is a complex of interconnected business entities and a specific form of enterprise with a system of means created by crossed segments of autonomous systems.
It is a morphology of contemporary society (Castells, 2000) K. Imai Network is a set or system of units between which there are more or less constant ties within the framework of certain relations (Imai & Itami, 1984) 1

.3 Innovative Network as an Object of Research
The object of this research is an innovative network.By the level of its development, this network takes an intermediate place between cluster and innovative system (Table 3).The Table shows that innovative cluster is only an initial stage of network distribution actively performed in Russian economy today.
Table 3.The development forms for the conception of network distribution of economic entities

Conception Definition
The formation stage of scientific innovative network

Regional cluster
The concentration of interdependent enterprises belonging to one or several close sectoral specialization within the limits of small geographical area Incipient, at the level of applicative knowledge diffusion and licensed technologies distribution

More organized cooperation between enterprises encouraged by contractual relations and aimed at the development of innovative activity of enterprises
At the level of joint research with the exchange of intermediate results

Regional innovative system
Cooperation between innovatively active enterprises and various organizations of knowledge generation sphere for knowledge sharing At the level of joint creation and use of research infrastructure objects, data bases, fundamental and applicative knowledge and "the division of research labour" The main goal of this study is to present the organizational update for innovative network with the help of classical management methods adapted for the object of our research.

The Classification of Economic Entities by Their Innovative Capacity
In order to integrate economic entities into the innovative network, they were classified by two criteria: innovative receptivity (i.e.how intensive they use market opportunities and overcome threats) and innovative ability (i.e.how they use their strengths and improve their weaknesses).For this, a well-known method of SWOT-analysis was adapted.It uses expert evaluation to distribute the types of enterprises in a matrix by their innovative receptivity and innovative abilities (Table 4).

Horizontally-integrate d enterprises
From the viewpoint of effective innovation management, it is the evaluation of innovative abilities and receptivity that helps to ascertain the outlook for an economic entity.

The Roles of Economic Entities in Innovative Development
According to the differentiated evaluation of enterprises' behavior in unstable environment, a role structure of economic entities in innovative network was developed by the complementary principle (Table 5) The role of network communicator Table 5 shows the main behavioral roles in innovation process for some goals and functions that better correspond to the potential of an economic entity.For a full characteristic of innovation roles of economic entities, the authors identified the main capacities they must have (Table 6).Besides, the authors made a conclusion that these very capacities of economic entities with certain innovation roles should be developed and periodically evaluated.The "customers" of changes Sufficient experience of production and economic activities Decent renown in the city and determinant social role The protection of working people rights and the formation of a solidary team 3 The "generators" of innovations Flexible and mobile in competitive struggle, client-oriented The support of creative and innovative gifts of the staff 4 The "catalysts" of innovations Information and knowledge are the main resource.Contemporary information technologies and the intellectual capacity of freelancers are actively used.

5
The "integrators" of innovators Considerable organizational resources The support of local authorities 6 The adoption and commercialization of innovations

Sufficient financial resources to cover innovation risks
The active use of methods to form and boost the demand 7 "Communicators" Developed business contacts with similar enterprises Constantly adopted practice of each other 8 "Deviation consultants" Accumulated data base which can be used in typical situations 9 The "adaptation" of innovations The ability to copy innovations with a glance to market development 10 The diffusion of innovations The ability to distribute innovations into other sectors of economy

Findings
At the second stage, the authors found strategies suitable for economic entities according to their identified roles and capacities in innovative development (Table 7).Knowing the most suitable innovation strategies, one can manage the behaviour of economic entities in their cooperative activity. Creative, offensive and active strategies.
These two groups of innovative behavioral strategies have their features by four development indications.This is shown in Table 8.

Risk investment; business expansion
These tables show that the second group of innovation strategies corresponds better to market initiative and riskiness and, consequently, develops and makes the most of the potential of an economic entity, i.e. its market, production, personnel and financial capacities.

The Evaluation of Factors Influencing the Development of Innovative Network Potential
The third stage of the study was the evaluation of factors for the development of innovative capacity which depends on market conditions, scientific and production environment, personnel and financial capacity.
It was necessary to consider certain factors which influence the choice of strategy and the use of potential for the innovative development of enterprise.According to Michael Porter's method of 5 competition forces, the authors identified these forces and assessed their influence on the components of innovative capacity (Table 9).

5.3
The ratio of modernized and innovative goods 5 7 6 8 26 (32.10%) The last column of the table contains calculated weight, i.e. the importance of each force for the development of innovative network.Then the influence of meso-environment factors on the development of innovative network was evaluated by experts (Table 10).Business networks promote the development of "coopetition" and "concoperation" (Kleiner, 2004), i.e. the implementation of strategy for the collaboration and integration of competitors.

5.3
The ratio of modernized and innovative goods 32.1 5 1.61

The Most Considerable Factors Influencing the Development of Innovative Network
As Table 10 shows, both the situation in sector and potential competitors has the strongest influence on innovative development.So, market conditions promote the innovative development, and the threat of new competitors make enterprises search for modern and efficient forms for the integration of business entities such as innovative networks.
Besides, it should be noted a low evaluation for the influence of suppliers and customers.This indicates the low innovative activity of the main market entities.Various researches, educational and innovative institutions supply solutions for innovative development.They promote the efficient improvement and use of innovations by customers.Society, government and business entities should be those customers, but they often do not have motivation for innovative development.Moreover, the interests of these three parties should be reconciled.That is why, the author consider necessary to create a management system for innovative development on the basis of innovative network.

Goal Indicators for the Long-Term Development of Innovative Capacity
In order to increase the innovative activity of economic entities, it was necessary to find appropriate indicators to evaluate and stimulate the participants of innovative network.Thus the fourth stage consisted in the formation of balanced system of indicators for the activity of economic entities which are the participants of innovative network (Table 11).The percentage of innovative product in the total volume

The coefficient of competitiveness for innovative production
The percentage of exported innovative products in the total volume 3 Personnel capacity

The coefficient of personnel's innovative activity
Quantity of innovation ideas for one worker

The coefficient of receptivity to innovations
The ratio of implemented innovative ideas to the total number of propositions

The coefficient of involvement in innovations
The percentage of employees involved in innovative projects

The coefficient of intellectual capacity
The percentage of developers in the total number of design personnel 3.5 The coefficient of efficiency for the use of intellectual capacity The percentage of acquired patents in the total number of applications The difference between profitability coefficients before and after the adoption of innovations 4.5 The coefficient of profitability for the investment in innovations The coefficient of profitability increment *the volume of proceeds/investments in innovations The balanced system of indicators was developed with the help of coefficient method which allows giving a relative evaluation and making conclusions about innovative development by corresponding quantitative and qualitative indexes.In this case, researchers may be interested in the comparative analysis of these indexes for economic entities for management solutions concerning the improvement of innovative development.The authors suggest laying responsibility for this on certain institutions of innovation infrastructure.

Conclusion
So, the usage of known management techniques adapted for the specific conditions of business network will make it possible to place and identify relative strategic roles for economic entities in order to include them into innovative network and to choose the most efficient strategies of innovative development.The method of five forces (by M. Porter) adapted for innovative network will allow identifying the most important development factors on the basis of collaboration and concerted economic interests.The proposed system of indicators for the usage of innovative capacity will promote the balanced economic growth of various economic entities.Organizational and economic mechanisms for the implementation of this method can be the prospect for research in this field.
coefficient of innovation profitability The ratio of income to costs for innovations 4.4 The coefficient of product profitability increment after the adoption of innovations

Table 1 .
The theoretical basis for network economy

Table 4 .
The evaluation of innovative abilities and receptivity of economic entities

Table 5 .
The role structure of economic entities for innovative network

Table 6 .
The main capacities of economic entities in innovative network

Table 7 .
Behaviour strategies for economic entities in innovative network

Table 8 .
The main features of economic entities by the groups of innovation strategies

Table 9 .
The evaluation of factors influencing the components of innovative capacity (expert 10-point scale evaluation)

Table 10 .
The evaluation of five forces for COOPETITION in innovation environment

Table 11 .
The balanced system of indicators for the activity of innovative network subjects