Dimensions of space in business network research

Interactive processes constitute a core notion in business exchange, leading to the concepts of relationships and networks. The constitution of process, comprising unfolding events, activities, and connected structures, relies on difference in space and time. While research has been devoted to time, the concept of space has thus far remained largely unexplored within business network research.This conceptual paper focuses on spatial dimensions for conducting research according to the IMP business network approach. Business actors create connected relationships and networks that exist and change as continuous emerging spatial structures and as mental maps in the managerial mindset. These relational network processes and structures are located, distributed and experienced in and across space. Drawing on economic geography and conceptual frameworks from the business network approach, we propose new dimensions and conceptualizations of space for the study of these networks. The paper delivers proposals to extend our current understanding of business networks as emerging and changing spatio-temporal entities with implications for theory development, research and practice.     

Managing tensions in coopetition

Tensions are natural in coopetitive business relationships that simultaneously involve cooperation and competition. The purpose of this study is to investigate how tensions are managed in coopetitive business relationships and examine the potential outcomes of the management of such tensions. The study will focus on various kinds of coopetitive relationships and how the management of the different tensions produces specific outcomes. The empirical study is based on comparative case study research on coopetitive business networks that features two different kinds of cases. The findings of the study contribute to coopetition research by identifying several new perspectives on tensions. Different levels of cooperation and competition in a coopetitive relationship as well as other underlying issues cannot alone determine tensions, but aspects such as the management of tensions are crucial. Most tensions are managed by using styles of competition and avoidance and result in mixed outcomes, which implies both positive and negative perceptions.     

Trigger issues in emerging relationships

Classic IMP research always emphasizes the important role of actor bonds. Relationships involve the development of social bonds over time between two or more actors, and in most relationships there is great variation in terms of the time it takes for these actors to develop perceptions about each other. Interestingly, however, there is much less research about how business relationships come into being. ‘Business relationship emerging flow’ describes a potential process by which business relationships come into being, from a starting situation through the trigger issues which motivate the matching process, to the establishment of new relationships. This paper places its focus on the trigger issues which could boost emerging relationships. The birth of an important relationship with a Hungarian company is discussed using retrospective interviews with parties, suppliers and customers. For deeper understanding of these trigger issues and to make them more tangible and applicable, a theoretical, logical framework is developed using two dimensions: space and time. Trigger issues are analyzed along these two dimensions. The paper closes by considering theoretical and managerial applications and further research issues.     

Creating value in business relationships: The role of sales

Understanding the creation of value in business relationships has been a long-standing goal of researchers and managers alike. By adopting a relational perspective, recent research on business relationships has made much progress in understanding value-creating processes. As the sales function is thought to be a pivotal part of the value-creating processes in business relationships, the evolving view on creating relationship value clearly has implications for our understanding of the role of sales in these processes. In contrast to its importance, the question of how the sales function contributes to creating value in business relationships has been largely neglected in extant literature. The objective of our paper is to answer this question by systematically linking the relational value creating process to the sales function's content. Interpreting value creation as interaction process, we identify four features of value-creating processes in business relationships suggested in recent research (i.e., jointness, balanced initiative, interacted value, and socio-cognitive construction) and, based on these, outline a framework that is used to define a set of tasks that are key to creating value in business relationships and hence become critical for sales in its hitherto neglected role as co-creator of relationship value. We illustrate the various tasks of this new role of sales with data from 43 interviews with sales managers and salespeople. Along with related normative recommendations in extant literature, the interviews provide support for the validity and relevance of our framework for understanding the role of sales in creating relationship value. This framework puts forward a much-needed first effort towards a theory of sales' role in creating relationship value and offers several opportunities for future research.     

Critical success factors in coopetition: Evidence on a business network

Coopetition in the literature of business networks has been discussed as a base strategy to potentiate competitiveness. This research investigates the main inter-relationship factors among the companies that are part of a network involving cooperation and competition, as well as their relationship in coopetition. This research discusses these questions through a review of the literature on coopetition and its application in business networks, basing the analysis on the critical success factors (CSF). Our analysis is conducted in the gastronomic industry, obtaining results through an exploratory investigation, conducted by applying the model suggested by Petter (2014) in a business network, attesting the means of the critical success factors and their correlations on the suggested dimensions and on coopetition. The main results for the critical success factors in coopetition indicate the importance of governance to maintain business networks, of cooperation to leverage innovative competencies, and that companies that have lower competencies regarding financial resources are more engaged in cooperation.     

Network process analysis: An event-based approach to study business network dynamics

To develop business, managers need to understand the dynamic nature of the business networks in which their company operates. Qualitative process research offers a promising methodology to deliver that understanding but does not yet provide elaborate analysis methods applicable to business network research. We therefore introduce an event based analysis strategy developed to study processes in business networks. Employing a longitudinal case on a paper trader's internationalization process in a network context as an experimental arena, we propose three tools for process analysis. First, a research steering wheel that combines both retrospective and real time event analysis; second, an analytical scheme comprising influencing factors, critical events and consequent change; and third, an event trajectory that unfolds process patterns. The proposed strategy offers a viable alternative to social network analysis, network pictures and narrative analysis with which to study network change and dynamics. Elaborating events from a moderate constructivist perspective, it enables the researcher to trace and understand processes beyond mere structural change, and to capture their evolution in a multilayered network context. We evaluate the strengths and weaknesses of the methodology and discuss its relevance for research and practice.     

Investigating guanxi dimensions and relationship outcomes: Insights from Sino-Anglo business relationships

This study aims to develop and test a concept for improving Anglo-Chinese business relationships. By piecing together and incorporating both Chinese and western relationship constructs into a cohesive framework and testing this on a sample of Taiwanese importers, the study conceptually and empirically advances our understanding of the discipline further. Specifically, three facets of guanxi, namely ganqing (an affective element), renqing (reciprocation and favor), and xinren (personal trust) are conceptualized to determine cooperation and coordination, which in turn lead to improved performance. Based on a sample of 208 buyers (surveying perceptions of their relationships with Anglo suppliers), we provide empirical support for our concept and reveal that ganqing, renqing and xinren are crucial for fostering the development of such Sino-Anglo relationships. By providing an international flavor in terms of the constructs outlined and the importer-exporter context, the study provides fresh insights to help broaden our horizon further and understand more about relationships in an international context. Several implications are extracted from the study which a) western marketers importantly need to practice as they grapple to enter Chinese markets and nurture business relations, b) Chinese buyers can consider when managing their supplier portfolios and c) academics can use to help measure important relational constructs and undertaking research in a Chinese context.     

The impact of competition and cooperation on the performance of a retail agglomeration and its stores

Stores in retail and other service agglomerations, such as high streets and shopping malls, compete with each other for customers. Yet they may also cooperate with each other in relation to operational and marketing matters within the agglomeration in which they are located. The aim of this paper is to investigate the impact of both competition and cooperation, i.e. coopetition, on agglomeration and store performance. Drawing on the network debate, this paper develops a conceptual model and tests it in three distinctive agglomerations, each in an urban setting, namely first- and second-order high streets as well as an inner-city retail and service cluster. A total of 277 store managers served as key informants in our survey. Variance-based structural equation modelling reveals that both competition and cooperation improve agglomeration performance directly. Despite competition having a negative direct effect on stores' performance, the overall effect is insignificant. Cooperation affects store performance positively but only indirectly. The contribution of this paper is to reveal and substantiate the complex nature and benefits of the effects of the coopetition of stores located within agglomerations. More widely it underlines the importance of managers of agglomerations understanding the differing effects of competition and cooperation and using this understanding in their management decision making.     

The competition–cooperation paradox in inter-firm relationships: A conceptual framework

With a focus on inter-firm relationships involving the simultaneous pursuit of competition and cooperation, we develop a conceptual framework that explicates key paradoxical conditions, paradoxical tension, and performance implications of tension in such relationships. We propose felt tension as the actual manifestation of the paradox and offer insights on critical capabilities necessary to understand and manage the paradox. Our paper extends the paradox literature in the inter-organizational context and provides a set of concepts and propositions designed to stimulate systematic empirical research on the competition–cooperation paradox.     

Coopetition close to the customer — A case study of a small business network

Coopetition interactions are traditionally divided into competing activities close to the customer, called output activities (e.g., sales and marketing), and cooperating activities far from the customer, known as input activities (e.g., logistics, production and R&D). In many coopetition networks, most of the cooperation has been in input activities, essentially meaning that little research is conducted in coopetition business networks with cooperative activities close to the customer. This article closes the gap by investigating coopetition in an ICT business network comprising small-to-medium-sized enterprises (SMEs) in the B2B sector. The purpose of this paper is to increase understanding of cooperation between competing firms by analyzing the success factors of cooperative activities close to the customer that lead to a positive outcome of coopetition. The results of the study show that some case companies are more competition oriented, whereas the others are more cooperation oriented. At the activity level of analysis, cooperation occurs in branding, marketing, joint customers, and delivery of services; whereas companies compete in local services, marketing campaigns, and pricing. In addition, our study shows that certain success factors for coopetition are highlighted, particularly in output activities such as activeness, geographical distance and personal resources.     

How firms learn in NPD networks: The 4S model

This paper examines how firms learn in new product development (NPD) networks. While existing research in business and industrial marketing has significantly advanced our understanding of learning within single firms and in dyadic relationships, our knowledge of inter-firm learning across direct and indirect business relationships in NPD networks remains limited. We address this limitation by conducting multiple case study research to develop a more holistic understanding of learning in NPD networks that is captured in the proposed 4S model. Drawing on an integrated theoretical perspective and the empirical results of three case studies, we propose that firms engage in iterative cycles of syndicated, situated, selected and synergised modes of learning in NPD networks.     

Doing business in India: The role of jaan-pehchaan

The study seeks to further advance our understanding of the complexities and challenges facing international managers when conducting business in an Indian context. Drawing on survey data from managers in over 300 companies, the study suggests that in-order to enhance performance in a business-to-business context within India, there is a need to nurture satisfactory business relationships through the practice of Jaan – pehchaan. Specifically, the study revealed that relationship satisfaction and long-term orientation are driven by three behavioral constructs associated with Jaan – pehchaan, i.e., Pehchaan, Len-den and Bharosa and these serve to positively drive business performance. Several managerial and theoretical implications are extracted from the study along with directions for future research.     

When Western measures meet Eastern perspectives: A prototyping analysis of xinren in buyer-seller relationships

This paper contributes to our understanding of xinren within buyer-seller relationships. Xinren is often translated to trust and is critical for the development of strong business relationships. Previous conceptualizations and measurements of xinren have been inconsistent and questionable. Through a novel methodology, prototyping analysis, this research outlines a foundational structure for xinren. A series of 4 studies were conducted on xinren in buyer-seller relationships in China involving a total of 311 participants who were employed in sourcing and procurement (33.23%) or marketing and sales (31.29%), and had spent less than one year working outside China. Central prototypical features include high arousal emotions highlighting the importance of affect-based aspects when developing xinren. Negative features indicate that both trust and distrust may be synergistically operating within xinren. Contributions are also made by outlining both universal trust features and more culturally-nuanced trust features. Suggestions for managers indicate how both Eastern and Western partners may use these results to build deeper trust within their relationships. Future research includes undertaking further prototyping analysis on trust within other cultures to develop foundational structures that may include both universal and culturally-nuanced trust features.     

Organizational and institutional barriers to value-based pricing in industrial relationships

In their effort to differentiate themselves from cost-driven rivals, many industrial companies are beginning to serve their customers through value-based offerings. Such companies often engage actively in collaborative value creation with their customers. To capture a fair share of the value created, they need to adopt a value-based pricing approach. Therefore, value-driven competition necessitates value-based pricing (VBP). The present study explores the barriers to exercising value-based pricing and suggests ways to overcome those obstacles in putting value-based pricing into action in B2B sales. The study is implemented as an exploratory multi-case study applying an abductive research methodology. Our cases show that industrial sellers try to understand and influence their customers' desired value perception, influence customer-perceived value (CPV), and improve their bargaining position as means to overcome these barriers to improved value capture. Hence, our findings deepen the current understanding of value-based pricing in industrial buyer–seller relationships. In doing so, it contributes to the literature on customer value, organizational capabilities, business models, and sales management in previously unexplored areas. Moreover, the study provides guidance to business practitioners willing to develop value-based pricing as part of their business model.     

Effective implementation of relationship orientation in new product launches

The critical role of relationships in business performance is widely recognized in the business marketing literature. However, to date, the prevailing new product launch research has concentrated on firms' general customer and competitor focus on predicting launch performance, and mainly applied a product centered or marketing mix perspective on considering effective strategic and tactical launch activities. Consequently, there is only scant knowledge on the relevance of a relational perspective when launching new products. The study contributes to this gap by examining the impact of firms' relationship orientation on launch performance and the key activities through which it is transformed into performance in the new product launch context. A set of hypotheses is developed and tested with data collected from 109 new product launches in pharmaceutical companies. The results show that sales force management and relationship leveraging mediate relationship orientation's impact on launch performance through complexly intertwined relationships. From a theoretical perspective, this study highlights the role of the relational perspective in new product launch and fosters our understanding on how relationship-focused culture is effectively implemented in practice. From a managerial perspective, the results offer insights on how firms can effectively enhance the successful commercialization of new products through relationship-oriented sales and marketing activities.     

A process-based model of network capability development by a start-up firm

Start-up firms are notoriously resource and time poor. One way of addressing these deficits is to develop strategic capability to access, activate and co-shape resources with other firms in the start-up's network. The capability literature assumes such a development is inevitable, provided a start-up survives. But developing network capability depends on the managers of other firms, the deepening managerial understanding of business relationships, and the ability of the start-up managers to adjust to and understand interdependence in networks. We present a processual model of how managerial understanding of network capability develops, comprising of three parts each building on the earlier: (i) in relationships, (ii) through relationships and (iii) in the network. The model was inductively developed from a longitudinal study of a start-up firm. Also, two sensemaking processes were found to predominate – problem solving and social-cognitive processes. Our model highlights the role of the start-up manager in sensemaking with managers across a number of firms to resolve commercial problems. Thus, the independence many start-up managers seek must turn towards interdependence. Second, managers' temporal horizons and the specific temporal profile of events and activities inside the involved business relationships are important in understanding and developing, with other firms, network capability.     

The emergent role of value representation in managing business relationships

This paper explores value processes, their effects, and their management in business relationships. Over time, scholars progressively moved their interest from the value of the objects exchanged to the value of business relationships. However, how value is related to interactive processes that characterize business relationships still remained unclear. With this scope, the paper brings to the fore recent studies on the role of actors' perceptions of value and the interactive features of the business context. The empirical research involves 77 interviews carried out over two years with actors internal and external to the Mikron Tool's business network, a Swiss leader in manufacturing high-precision tools. The study shows that four key value processes – value creation, value communication, value measurement, and value appropriation – determine specific consequences that must be managed to achieve effective business relationships. Moreover, empirical evidences highlight the relevance of value representation in affecting the four value processes. The study contributes to an improved understanding of value management in interactive and interdependent business contexts. Also, it draws attention to the need for a better integration between the traditional economic view of value and recent insights from the fields of organizational psychology and sociology.     

Challenges of servitization: A systematic literature review

The challenges of servitization have gained significant attention from both academics and practitioners, as more firms in the industrial sector are seeking marketing opportunities leading to business growth through the adoption of a service strategy. Although existing research has explored its challenges from multiple perspectives, this is largely fragmented and the studies offer little understanding of the impacts of the challenges on the realisation of servitization benefits and improvements in business performance. This study, therefore, aims to create a formal construct of the challenges and develop a set of hypotheses through a systematic review of the servitization literature to build a theoretical model explaining the underlying relationships. Five challenges are identified: organisational structure, business model, development process, customer management, and risk management. The indicators of each challenge are discussed to support the establishment of hypotheses. This study contributes to the current body of knowledge by reaching a clear conclusion from the fragmented literature and brings together five challenges to explore their impacts on the overall business.     

Risk management system in business relationships—Polish case studies

The article discusses the problem of risk management in business relationships. The authors' research (including a case study analysis of 5 different relations) enabled them to identify and characterize the risk management systems based on a combination of formal control and relational mechanisms. In the authors' research it has been assumed that relational risk has a negative influence on the cooperation results and therefore it should be a subject of management. The main objective is not to avoid taking risk in relationships, but to reduce it to the minimum possible level. Companies' cooperation, including partnerships with different entities and participation in business networks, is an immanent characteristic of contemporary business. Therefore managers should look for the most efficient methods of dealing with additional relational risk and opportunistic behavior of potential partners.In the paper the case study analysis of five relationships of companies operating on Polish market was presented. The main objective was to demonstrate the relation between the level of trust and the intensity of formal control (including contract and formal monitoring). The range of social control applied in analyzed relationships was also an important issue of consideration.The research presented in the paper indicated that companies located in Poland in order to reduce relational risk aimed at diversification of its partners or full integration. Managers often underlined their fear of being dependent on one particular partner. This phenomenon could comprehensively decrease the advantages of intensive and deepened inter-organizational cooperation in Poland. Furthermore, the research demonstrated the decisive role of relational mechanisms and limited significance of contract in business relationship risk management. However, relatively higher importance of contract was observed in unbalanced relations between partners representing diverse bargaining power. A positive relationship between application of relational tools and cooperation results was identified as well.The aim of the paper is to demonstrate the nature of the relationship risk management system and the role of particular mechanisms that enable to reduce risk and its negative influence on cooperation results.