Changing network pictures: Evidence from mergers and acquisitions

A merger or acquisition may cause dramatic changes in a business network, which in turn affect managerial cognition as well as managerial activities. We use the concepts of ‘network pictures’ and ‘networking’ to illustrate and analyse changes in managerial sense-making and networking activities following a merger or acquisition. The paper focuses on acquiring, acquired or merging parties and those companies with which they have direct customer relationships. Based on three case studies comprising seven acquisitions and one merger, we show that following a merger or acquisition managers may need to adapt their previous network pictures in a radical way; these adaptations are, however, not always realized as shifts in network pictures and adjustments in networking activities by all the managers involved. Whereas the merging parties' network pictures and networking activities are largely driven by their perception of customers' needs and developments, it is not certain that the merger or acquisition is enacted accordingly. The paper contributes to a clearer view on the conceptual interdependence of the constructs of network pictures and networking in multi-actor situations and thus it develops a network perspective on mergers and acquisitions.     

Networks of mind and networks of organizations: The map metaphor in business network research

This paper examines the definitions and uses of the network picture metaphor in industrial marketing research. Conceptually, the paper extends our understanding of networks and of representations of networks among researchers and practitioners as pictures or maps. A threefold interpretation is proposed of network pictures as representationalist, mentalist and situated. The representationalist use has dominated business-to-business network research while the mentalist use is prominent in strategic management and has recently made an entrance into industrial marketing research. The representationalist version of pictures, despite its apparent innocence, can either imply or leave unexamined the mentalist version, but mentalism stands in contradiction to much network thinking. This paper seeks to resolve the emerging contradiction of representationalist and mentalist versions of network pictures by advocating a situated version. Seeing network pictures as situated in use is helpful in grasping cognitions and actions in a manner consistent with networks. The paper concludes by developing the situated version of network pictures as ‘actants’ and sketches the benefits and implications for business researchers and practitioners.     

Actor network pictures and networking activities in business networks: An experimental study

In recent years, there has been increasing interest among business-to-business marketing scholars in the processes of managerial cognition. In particular, actors' network pictures, defined as the cognitive representations of managers' business surroundings have attracted much attention. However, there has so far been no empirical research on the impact that network pictures have on managerial behavior. The purpose of this paper is therefore to understand if and how specific pertinent network picture characteristics — namely power, dynamics, broadness, and indirectness — are associated with different behavioral choices, i.e. networking strategies. Based on an experiment with 445 Executive MBA students, all international managers across different industries, we find that managers' choices when managing business relationships, their strategic actions, are affected by the way they perceive their surrounding business network. However, amongst the different theoretical models of networking activities tested, only the power dimension showed significant associations with all four network picture characteristics. This study represents the first to empirically study the connection between cognition and behavior in business-to-business markets, as well as one of the few to apply an experimental design to study a business-to-business marketing related phenomenon. Also, it paves the way for future understanding of the association between network picture characteristics and networking strategies in interaction between actors.     

The utilisation of network pictures to examine a company's employees' perceptions of a supplier relationship

Network pictures have been perceived as providing a picture of a company's position within a network ([Ford, D., Gadde, L.E., Håkansson, H., and Snehota, I. (2002), “Managing Networks,” IMP Group in Asia, 11th-13th December.]; [Ramos, C., Ford, D. and Naudé, P., (2005), “Developing Network Pictures as a Conceptual Device,” First Annual IMP Journal Seminar.]). This exploratory paper aims to investigate the application of network pictures at the dyadic relationship level. Taking the perspective of employees from a single company, this research examines the perceptions of a specific supplier relationship. The study takes the network pictures of three key individuals and examines the boundaries of their network pictures, their lines of communication, their perceived relationship atmosphere and the impact of environmental factors. Unsurprisingly, the boundaries of each network picture, the frequency of communication and perceptions of the relationship atmosphere varied systematically with their managerial level and function. In this regard, the findings suggest that network pictures may act as a useful sense-making tool for developing and sharing relationship information both internally, between employees and externally, with the supplier. Further research is required in order to confirm whether these findings are applicable to other dyadic relationships and to investigate the implications of network pictures as a tool for managers.     

Picture this: Managed change and resistance in business network settings

This paper discusses change management in networks. The literature on business networks tends to downplay the role of managerial initiative in network change. The change management literature addresses such initiative, but with its single-firm perspective it overlooks the interdependence of network actors. In exploring the void between these two streams of literature, we deploy the concept of network pictures to discuss managed change in network settings. We analyze a change project from the furniture industry and address the consequences of attempting to manage change activities in a network context characterized by limited managerial authority over these activities. Our analysis suggests that change efforts unfold as a negotiated process during which the change project is re-negotiated to fit the multiple actor constituencies. The degree of overlap in the co-existing network pictures of the involved actors is found to be decisive for the possibility of successfully implementing network change.     

Enablers and inhibitors of the development of network capability in entrepreneurial firms: A study of the Irish micro-brewing network

Focusing on the Irish micro-brewing industry, this paper identifies and describes the factors that both enable and inhibit the entrepreneurial firm's development of its network capability. The empirical research entailed in-depth interviews with the entire network of micro-brewery entrepreneurs in the Republic of Ireland and Northern Ireland comprising nineteen firms. Using multiple levels of network analysis, findings illustrate the complexity of network capability development. The factors inhibiting the development of network capability were found to outweigh the ones enabling it. Past network experience, information sharing and participation in coordinated consumer events represent some of the factors found to enable network capability. Conversely, a desire for control over decision making, a lack of knowledge sharing or joint problem solving and the perception of value chain activity links and resources as unnecessary inhibits network capability. The main contribution of the paper is a framework of factors enabling and inhibiting network capability based on a multi-level network analysis.     

Strategic capability architecture: The role of network capability

A firm's network capability refers to its ability to build, handle and exploit relationships. These capabilities are interwoven in a complex configuration with the other capabilities and competencies of the firm and in practice, are very difficult to separate from them. Rather than assuming that firms inherently possess network capability, our aim is to discover if the shared managerial logic of top management teams confirms its presence. In order to understand how managers perceive, process and interpret network capability, we guided the management teams of five industrial suppliers through a novel five-step process of introducing, identifying, critically screening, challenging and verifying the capabilities of the firm. The paper introduces a framework for strategic capability architecture and investigates how network capability emerges from among the configuration of other capabilities in industrial firms. We found that network capabilities are central to the formation of customer capabilities. Network capabilities also play an important role as assets contributing to the formation of other capability sets. Furthermore, we found that the networking capabilities act in unison with other capabilities through three different strategic logics termed partnering, value streaming, and horizontal allying.     

A cross-cultural comparison of the network capability development of entrepreneurial firms

The business-to-business network literature has made interesting and insightful contributions in relation to networks as a core trajectory for external resource acquisition for the small, entrepreneurial firm. Using the micro-brewing industry in Ireland and Belgium as an empirical base, the purpose of this paper is to extend this research through examining the relationship between national culture and the development of network capability in an entrepreneurial context. Findings from in-depth interviews with fourteen firms, and analysed in light of Hofstede's five dimensions illustrate that culture matters. Low power distance facilitated network capability development through wider network engagement. High masculinity and individualism negatively impacted network capability development as evidenced by a lack of experience in interaction, a desire for control and independence and minimal information sharing. Strong uncertainty avoidance scores allowed for joint problem-solving and industry cooperation whereas a short-term orientation led to more transaction-based exchange within the value chain. The core contribution of this paper stems from it being the first rigorous investigation regarding how national culture impacts network capability development in a business-to-business network context.     

Securing and managing an organization's network legitimacy: The case of Motorola China

This study combines concepts from institutional and network theory to explain the currently observed behaviors of organizations in securing their network legitimacy. Organizations secure their network legitimacy by engaging in business, social, and political activities, with key network actors and institutions. This is achieved within an institutional framework of rules, regulations, and ideologies, including any consequential contextual changes. But while network legitimacy plays an important part in an organization's survival, limited attention has been paid to the development of a conceptual framework. In this article we provide one such framework and, specifically examine attributes of successful network legitimacy through an inductive, interpretative case analysis of Motorola China, in a transitional Chinese telecommunication sector.     

A framework for the analysis of global, regional and local business networks

In this article we are dealing with the global, regional and local questions of the business. We raise the following question: is there a relation between network management (networking) and the spatial type of the network. We make a cross analysis of networking and spatial types of the network. The paper builds on the model of networking (Ford et al., 2002; Ford et al., 2003; Håkansson et al., 2009), the network paradoxes (Håkansson and Ford, 2002) and the model of 6 Cs (Ritter & Ford, 2006). We emphasize the strategic importance of the interpretation of network pictures. In order to answer the research question we create a theoretical conceptual frame called the Spatial Networking Matrix. We use the method of explorative expert interview in order to introduce some experiences of company leaders and managers concerning networking and spatiality. We conclude that after further development, the Spatial Networking Matrix can help to analyze networking and spatial types of networks at once, deepen the understanding of the real business world and through all of these, be a useful tool for business practice.     

Public value mapping of network neutrality: Public values and net neutrality in Korea

Network neutrality (NN) is of broad and current interest despite its complex and multifaceted nature. This study examines NN in the Korean context in terms of policy, industry, values, and society. It addresses the policy effectiveness of ongoing NN discussions by analyzing user attitudes and perceptions. The proposed model empirically tests policy effectiveness through user perceptions by incorporating factors representative of NN. Possible NN factors are derived from the previous literature and perceptions of NN concepts. The results find that regulation and competition are two primary factors constituting network neutrality, and these factors differently influence the formation of attitudes toward policy effectiveness. Political and social implications are discussed based on the proposed model. This study provides comprehensive analysis and heuristic data on user drivers, industry dynamics, and policy implications in the NN ecosystem.     

Organizational Obstacles to Innovation: A Formulation of the Problem

A large corporation is a complex social system that seems to take on a life of its own quite apart from the purpose for which it is intended. When one of the purposes of the organization is innovation, the social system can produce obstacles that are not easy to overcome. In this article, Professor Volney Stefflre provides a refreshing look at the problems of keeping an organization innovative enough so that it can survive and thrive in a changing environment. Professor Stefflre's view is an unusual and creative one. It comes partly from his many years of working with a variety of manufacturers as they attempted to adapt to their changing environments through innovation. It also comes from his background in psycho-linguistics—the area, he says, where psychology and anthropology meet. It may not be surprising then that his article includes a brief look at empires and civilizations as part of the support for his thesis. This article is adapted from one of the chapters of Professor Stefflre's new book: Developing and Implementing Marketing Strategies . New York: Praeger Publishers Inc., 1985.     

Network neutrality and difference in efficiency among Internet application service providers: A meta-frontier analysis

As Internet applications evolve and require wider and more stable bandwidth, Internet service providers (ISPs) try to maximize their profit by controlling application service providers (ASPs); this has caused a network neutrality debate. This article categorizes ASPs into four groups by bandwidth-usage attributes and latency sensitivity. By estimating the efficiency of these groups, their efficiency differences are estimated, indicating evidence of discrimination of ISPs when network neutrality is not maintained. Meta-frontier analysis is used to compare efficiencies across companies using different production function technologies. Finally, a Tobit regression model is used to determine which variables explain the difference of efficiencies. The estimation result indicates that the discrimination of ISPs against ASPs is not significant enough to decrease the efficiency of any application group.     

Network evolution and the embedding of complex technical solutions: The case of the Leaf House network

The purpose of this paper is to investigate the connection between network evolution and technology embedding. To this end, we performed an exploratory case study of the network surrounding an eco-sustainable technology, Leaf House, Italy's first zero-carbon emission house. We apply theories on technological development within industrial networks, with a specific focus on their resource layer and on the three settings involved in embedding an innovation: “developing”, “producing”, and “using”. Our results contribute to these theories by developing four propositions on the connections between network evolution and embedding: first, technology embedding entails both downstream network expansion and upstream restrictions. Secondly, conflicts among actors increase as technology embedding approaches the producing and using settings. Third and fourth, the more the shapes a technology can assume, and the more each of these shapes involves actors acting in different settings, the easier it is to embed it. The paper concludes with managerial implications and suggestions for further research.     

Exploring the concept of coopetition: A typology for the strategic moves of the Finnish forest industry

The Finnish forest industry is sustainable, well-established, internationally oriented and successful. For companies in such a basic industry, an industry that features mainly bulk products and relatively small domestic markets, sustainability in business may hinge on long-term strategic choices. It is proposed in this paper that it is not only strong domestic competition, but also—and especially—coopetition traditions (simultaneous cooperation and coopetition) that are the crucial factors contributing to the success of the industry. This article contributes to the literature by providing industry-level tools, namely a coopetition framework and combined coopetition typology. The findings indicate that coopetition traditions have been present throughout the activities of the Finnish forest industry, enabling sustainability of the industry to a significant extent. Managerial and theoretical implications are also discussed.     

Non-linear relationship between industrial service offering and sales growth: The moderating role of network capabilities

In an effort to approach the mixed findings regarding the relationship between a firm's industrial service offering and its performance, this study analyzes the impact of the industrial service offering on sales growth and the moderating role of network capabilities. The proposed research model is tested based on data from 91 Finnish manufacturing firms. Our results demonstrate a non-linear effect of the service offering on sales growth. We also find that network capabilities enhance the effect of the service offering on sales growth. For managers of manufacturing firms, the results imply that the active development of a comprehensive service offering should be implemented in conjunction with the development of organizational capabilities, such as network capabilities, to create value and promote improved performance.     

Metatheory of network management: A contingency perspective

This paper introduces a metatheoretical, contingency-based framework of inter-organizational network management. We define four basic network management functions and suggest that they are universal to all inter-organizational networks. We argue that management tasks, derived from more general management functions and contingent upon network characteristics, differ according to network type. We further argue that the roles that different actors in a network can adopt depend on their resources and capabilities. The framework contributes to the emerging theory of network management by clarifying the connections between its different conceptualizations and layers. A clear implication of the framework is that it is fundamentally useless to argue that networks cannot be managed. Networks are being managed, all of the time. However, we agree that the extent to which networks can be managed differs from one network to another along with the managerial tasks employed.     

ICT technologies in Europe: A study of technological diffusion and economic growth under network theory

The sector of Information and Communication Technologies (ICT) is one of the key instruments for the development of an economy. The literature emphasizes its capacity for both increasing productivity and generating new sources of income and wealth (5 and 20 among others). Traditionally studies on the ICT sector have focused on the analysis of its economic impact, but not on its capacity as a “bridge” for information and knowledge flows across the economic network. Following Burt's approach (1992) on structural holes, the organization of the economic network defines where and for whom new opportunities lie. The structural hole methodology allows to analyze the capacity of the ICT sector as an enabler of technological diffusion and innovation. The results show that the European ICT sector not only is important for its intermediary role in the flow of information across the economic network, but also for its low level of dependency on other sectors.     

Do converters facilitate the transition to a new incompatible technology? A dynamic analysis of converters

This paper analyzes the process of transition in standards between incompatible technologies when converters are available. Contrary to a common presumption that converters facilitate the transition from an old technology to an otherwise incompatible new technology, I find circumstances in which the possibility of transition is blockaded by the existence of converters. In the welfare analysis of converters, a distinction is made between ex ante and ex post efficiency effects. Finally, I also analyze the equilibrium behavior in the provision of converters and compare it to the socially optimal outcome.