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The Business Network Role in Production System Innovation: A Case Study in the Organic Agro-Food Industry

The aim of the paper is to analyse the innovation of the production process of an agro-food SME that decide to move from conventional to organic production system. Moreover, the paper aims at analysing the role played by the business network during the implementation of the innovative strategy of entrepreneurial turnaround. By the reconstruction of the process of acquisition of the European Union certified trademark Reg. CE 834/2007 for organic products, the study aims at providing a dynamic description of the complex phenomenon of process innovation through the study of emerging changes in the network of business relations of the company according to the approach of the Industrial Marketing and Purchasing Group (IMP). The innovation process is achieved by the integration and development of new resources: for this purpose the firm needs to reconfigure the available resources and relationships as well as to develop the existing ones. The process of reconfiguring the network of key business relationships both on the input side and on the company's output side represents an interesting organizational challenge for the small business that has to face the structural scarcity of resources that has always characterized its development processes. The specificity of the process is made even more interesting by the choice of the empirical context, that is the organic food industry, THE BUSINESS NETWORK ROLE IN PRODUCTION SYSTEM INNOVATION... 661 characterized on the one hand by the diffusion of narrow networks of highly localized producers, and by the presence of a large globalized distribution on the other. The paper analyses a case study through a qualitative longitudinal methodology which focuses on an organic agro-food small business located in Puglia, in south-eastern Italy. The case has been chosen among a wide network of organic agro-food producers, which represents a significant sample of the organic business population in Italy