Adoption of strategic networks: evidence from the Hong Kong clothing industry

Purpose – Recent management literature demonstrates a growing interest in strategic networking. The aim of this paper is to explore the adoption of strategic networks using Hong Kong clothing industry as the context because the influence of Asian cultures is under‐researched. Design/methodology/approach – Three key research questions about asset specificity, years of relationship, and size of the supplier base were developed from the literature. Qualitative data were collected from in‐depth interviews with senior executives at five large clothing companies in Hong Kong. Findings – The qualitative findings confirm that the specific asset investment, reciprocal or one‐way, has a positive impact on the development of strategic networking; that enterprises strive hard to maintain longer relationships with key supplier members; and that a small supplier base is widely adopted by the sample firms. Practical implications – The implications for managerial practice are that strong strategic networking is needed as transaction‐specific assets can safeguard the network relationship; that a long‐term relationship enables effective transactions; and that managing a small number of suppliers helps to stabilize network relationships. Originality/value – This paper represents an initial attempt to include Asian cultures in the study of strategic network concepts within one globalized industry – the Hong Kong clothing industry. The paper also demonstrates to practicing managers how strategic networks made up of manufacturers and their suppliers are adopted and maintained, and in turn, guides practicing managers on how to allocate resources appropriately to develop a strategic network.