As enterprises focus increasingly on core competencies, the importance of collaboration and knowledge sharing between organizations is greatly enhanced. This paper examines the development of knowledge sharing during the initial exploratory stages of an emerging business network. It demonstrates how the business model can serve as a tool for spanning organizational boundaries. Through developing a business model, network enterprises can learn to understand each other, create common concepts within their business network and evaluate the feasibility of the endeavor.

The trend of outsourcing and concentrating on core competencies has made enterprises increasingly interdependent in terms of abilities and expertise (Dyer and Singh, 1998; and Powell, 2001). Inter-organizational cooperation in which enterprises combine their knowledge and know-how in new ways is fertile ground for innovation (Nooteboom, 2000). It is, therefore, of little surprise that the importance of business networks as a source of business expertise has grown in recent years (Tsupari et al., 2001 and 2004) and drawn growing attention as a means to implement strategy (Håkansson and Snehota, 2006).

Mutual learning within a network presents considerable challenges, and this is more so in a network comprised of businesses with different histories and competencies and conflicting goals. In contrast, at the intra-organizational level, these goals cannot be changed by simple boardroom decision, but must be met with trust, persuasion and high-powered market-based incentives (e.g., Andersen and Christensen, 2000). A network enterprise has the right, and even the duty, to withdraw from cooperation if dissatisfied, for example, with the level of expected investment or the sharing of risks and profits. It takes time for the parties to learn to trust each other, to work together and also to be ready to implement changes to their own operations and practices as and when it is required. In practice, this involves learning at multiple levels: cooperation requires changes within the network, within the individual enterprise, and within bilateral relationships between enterprises (Heikkilä et al., 2005).

The network's enterprises are thus faced with a challenge: How to create an innovative business model that spans inter-organizational boundaries in a satisfactory and acceptable manner to all parties? In literature, this type of activity towards a common goal by separate entities and individuals requires cross-boundary learning a kind of a learning considered to require the use of `boundary objects' to facilitate the spanning of boundaries between communities (Star and Griesemer, 1989; communities of practice, Brown and Duguid, 1991; communities of knowing, Boland and Tenkasi, 1995). A boundary object facilitates mutual exchange of knowledge between different parties. Star and Griesemer (1989) describe four types of boundary objects: (1) the standardized form, (2) the common repository (e.g., library), (3) the coincident boundary, and (4) the ideal type. The ideal type is an abstract description or scheme of fundamental concepts, which is adaptable to different situations for the purpose of describing concrete details about different parties. Ideal types are models that can be used to facilitate the exchange of ideas between cooperating partners.

Business Strategy Journal, Network Business Models, Core Competencies, Business Networks, Bilateral Relationships, Knowledge Transformation, Common Description Process, Development Process, Business Model Planning Process, Business Collaboration, Telecommunication Services, Customer Segments, Organization Strategy, Business Processes, Harmonization Processes.