Abstract

The purpose of this study is to evaluate the internal and external factors as well as strategies related to the effectiveness of network management link with the development of SMEs Cluster The research location in East Kalimantan Province was divided into the three categories of clusters including the Batik Food and Handicraft where 351 respondents were selected as using the cluster sampling design and the data obtained was analysed using structural Equation Modeling Therefore the following hypothesis were established 1 there are relationship between internal factor and the effectiveness of network management 2 there are relationship between external factor and the effectiveness of network management and 3 there are relationship between strategy and the effectiveness of network management This research identified four strategies that ought to be properly implemented in order to achieve effectiveness consisting of community and bureaucratic orientation accounting management workforce organization and interdependence strategy maintenance