Within the industrial network approach, new business formation is a cumulative process of relating the new business to the existing business network over time. This paper combines the literatures on industrial networks and projects (management) to explore the roles of two different types of (temporary) inter-organizational projects in the embedding process. The paper examines the embedding in a network of a new project-based firm that went from being a new entity to becoming capable of taking a stronger network position by using different types of projects as embedding tools. Embedding of the new firm in the business network required the combining of different but complementary types of projects to build a stronger network position. We find that (temporary) inter-organizational projects are tools for embedding the firm in a network of relationships. The inter-organizational projects can provide the firm with opportunities to both discover and develop not only its own resources but also the resources of others, leading it to change perceptions and principles on what resources are useful to access and who possesses those resources.

Introduction

The formation of new businesses is an area that has gained increased attention in the context of the industrial networks approach (Aaboen, Dubois, & Lind, 2011; Aaboen, La Rocca, Lind, Perna, & Shih, 2016; Ciabuschi & Perna, 2008; Hormiga, Batista-Canino, & Sánchez-Medina, 2011; Snehota, 2011). From that perspective, no firm possesses all of the resources (e.g. technological, material, knowledge and other intangibles) required to fulfill the requirements of other firms. Therefore, the firm needs to establish and develop business relationships to access the resources that the other firms directly control (Ford, Gadde, Håkansson, & Snehota, 2003). The starting point for these studies is the concept of a business network as a set of two or more connected business relationships, such that one relationship can affect the content and the development of other (directly or indirectly) connected relationships (Ford et al., 2003; Håkansson & Snehota, 1995). The presence of business relationships implies that organizing effects on the business network exist, because the “formation of the new business builds on the pre-existing network of relationships but, at the same time, modifies the existing form of the network” (Snehota, 2011, p. 5). By emphasizing the recombination processes of resources and activities involving the new firm and its (specific network) context over time, the study of new ventures is, from an industrial networks approach, inseparable from its inter-organizational dimension (Ciabuschi, Perna, & Snehota, 2012; Gadde, Hjelmgren, & Skarp, 2012; Snehota, 2011).