Why is this important?

The institutional capacity discloses something about the ability of the network and its participants’ ability to handle external forces of change, or challenges, threats and opportunities. This is about knowing which resources (knowledge and relations) each member has in their network and having a strategy in place to mobilize these resources to a team that may lead the process of meeting the business’s or the network’s challenges. There are two well-known obstacles to networks’ institutional capacity that need to be overcome, namely path dependency and fragmentation.