Sense-making and agenda construction in emerging business networks — How to direct radical innovation

This paper focuses on the role of sense-making and development agenda construction in emerging business fields characterized by radical innovation. First, the networked environment of emergent business fields is described. It is shown that both sense-making and agenda construction are key cognitive processes in managing in this environment. Then, a framework describing the dimensions of managerial sense-making and its antecedent factors is suggested and discussed. Finally, the phenomenon of agenda construction and communication and its role in influencing the direction of business field development is examined. Discussion of the theoretical and managerial implications concludes the paper. The paper provides significant new understanding on the roles of sense-making and agenda construction in the emergence of new business fields. It contributes both to network theory of emerging fields and management in radical innovation contexts.     

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.     

Conceptualizing business models in industrial networks

This paper is concerned with business model conceptualizations and outlines a framework for their analysis in industrial networks. A literature review suggests that there is a broad range of current conceptualizations of business models. Analyzing them as they pertain to interaction, business relationships, and industrial networks reveals two main explanations for their differences: first, they clearly rely on different basic theoretical assumptions, and second, they seem to address two types of business models. We refer to these as firm-centric and network-embedded business models. Based on this distinction, a scheme of analysis at the levels of the firm, relationship and network is suggested for the two types of business models. Business models are challenging from an analytical as well as managerial perspective. Further research on emerging network-embedded business models is suggested.     

The use of favors by emerging market managers: Facilitator or inhibitor of international expansion?

This article explores the use of favors by emerging market managers, the impact of using favors on their firms’ growth, legitimacy, and reputation in a variety of business environments, and how the use of favors affects firms’ paths to international expansion. We discuss the concept of favors, and to illustrate the process of favors, we look at culturally rooted examples of their use by managers from the BRIC countries of Brazil, Russia, India, and China. Utilizing neo-institutional theory, we create a typology of four types of environments in which managers and firms from emerging markets conduct business with various relational entities (e.g., governments, customers, suppliers, competitors, alliance partners). We posit that the use of favors by managers compensates for the relatively weak legitimacy of formal institutions in emerging market environments, with favors illustrating the resulting reliance upon informal cultural-cognitive institutions. We develop propositions regarding the impact of the use of favors on the organizational outcomes of growth, legitimacy, and reputation of emerging market firms doing business in each of the four environments. This leads to further propositions regarding how the use of favors can influence their firms’ internationalization growth paths. We conclude that the impact of favors on international growth paths results from the fit or non-fit of their use with the level of legitimacy of the formal institutional environment of the focal relational entity in various business transactions.     

Rise of strategic nets — New modes of value creation

This paper focuses on the type and management of intentionally created business networks called nets. Nets are extensively being used to achieve a variety of benefits over those of a single firm or market transaction. We propose that the effective management of different types of business net is dependent on their underlying value creation logic. Based on this notion a value creation framework of three generic net types - ‘current business nets’, ‘business renewal nets’, and ‘emerging new business nets’ - is suggested. We argue that they pose widely different conditions and requirements for net management. The management mechanisms of these basic net types are then identified and discussed. We contend that the proposed contingency framework captures the complexity and variety of the expanding strategic business nets in a more valid way than the extant classifications of network organizations. The paper contributes to the emerging theory of network management.     

Networked business model development for emerging technology-based services

This study examines the development of a networked business model for emerging technology-based services. Few studies explore the development and use of business models, and research on networked business models is particularly scarce. With observation and interview data from a network pilot of technology-based services the study presents the concept of a networked business model as a dynamic device in planning an emerging business in a net of actors. The findings identify phases of business net evolution when business opportunities are identified, created, and potentially exploited and recognize the role of entrepreneurial actors in the development.     

Managing strategic system-building networks in emerging business fields: A case study of the Dutch smart grid sector

Companies that wish to launch innovative sustainability technologies can collaborate in strategic networks of actors from industry, government and research institutes to pro-actively build a business ecosystem around their new technology. This is called collective system building. In this paper, we examine how to effectively manage networks for collective system building. Based on a review of the literature, we identify the key factors of effective network management and we propose a conceptual framework for network management at the network level. Subsequently, we conduct a multiple-case study in the Dutch smart grid sector to examine how these key factors are implemented by system-building networks. We find differences with the existing network management literature regarding network composition, network management structure, governance modes, decision-making processes, project management, the free-rider problem and trust-building mechanisms. Our study contributes to a better understanding of effective management of system-building networks, which in turn can lead to greater success in establishing new business fields. We contribute to the literature on strategic business networks, specifically on emerging business networks building new business fields.     

产业网络组织及其分类研究

产业网络是一种新型的组织协调方式,是产业组织理论的创新。本文在网络理论分析的基础上,从主体、行为、资源三个网络要素出发,构建了产业网络的组织分析框架。在此基础上．本文选取“嵌入式”、“浮游式”、“主导式”、“群居式”、“竞争式”、“合作式”、“紧密式”和“开放式”八个标准对产业网络进行分类。同时．本文还研究和探讨了产业网络分类体系的动态性问题．提出了“游离态”和“稳定态”的概念．并进一步分析了产业网络分类体系的动态转化路径。     

The transition from products to solutions: External business model fit and dynamics

This article provides empirical evidence and contributes to theory building concerning business model fit and dynamics in the area of solutions business. Business models are seen in this context as going beyond considerations such as offerings and internal processes or even relationships, and as including network and market considerations. Indeed the paper highlights the fact that a business model is not firm-focused, nor dyad-focused, but rather network-, and even market-focused, demonstrating that a business model is not static, but dynamic. Manufacturer and customer continuously shift form and content of their respective business models to adapt both to the needs of the counterpart and to market context. A qualitative case study approach is adopted, with subsequent content analysis. The case study relates to the aerospace industry with focus on a complex engineering firm, one of the largest aircraft manufacturers in the world, its customer — a national airline — and their network partners of various kinds. The data were collected through multiple face-to-face interviews with managers in both companies, as a part and parcel of a network of actors that influences and is influenced by the supplier–buyer relationship. Relationships over time between these firms and network partners are described, highlighting the interplay of products and services related to the provision of solutions. Findings highlight the dynamic nature of business models over the relationship lifecycle between supplier and customer in a complex engineering environment, and the need for reciprocal adjustment of models.     

Favor prevalence in emerging markets: A multi-level analysis

Favors are a medium of exchange for social capital. Social capital creates social, political, and economic benefits for individuals, organizations, communities, and societies around the world. Favors promote cooperation between individuals and are used to bond individual actors with other individuals, groups, communities, and institutions. Favors are prevalent in business in emerging markets because of the presence of institutional voids, limited social and geographic mobility, and strong reciprocity norms. Favors create benefits and liabilities for business organizations and their networks. They produce outcomes beyond the favor exchange process that can be characterized as productive or perverse. Despite their prevalence and importance, favors and their dynamics are not well understood. We explore the antecedents, content, process, and consequences of favors. We conclude our multi-level analysis of favors with a discussion of the “breakeven” point for favors—the point where favors tip from having a positive effect to having a negative effect on organization performance. We present an integrated framework to explain the dynamics of favors in emerging market business contexts, and develop propositions to guide future research.     

Customer referencing as business actor engagement behavior – Creating value in and beyond triadic settings

The rising impact of customer engagement is increasingly evident in business markets. This paper studies customer referencing as an important manifestation of engagement behavior in the business-to-business (B2B) context. To extend extant research, which has thus far examined referencing almost exclusively from the seller's viewpoint, we study how referencing affects value creation in business networks. We explore resources contributed and gained though referencing and the resulting value outcomes for the entire reference triad (the seller, the reference customer, and the prospective buyer). Empirically, the paper draws on an extensive field study conducted in knowledge-intensive business service industries. The results explicate how customer referencing affects value creation within and beyond the triad, by i) enhancing or impairing actors' internal processes; ii) strengthening or damaging relationships between the triad actors; and iii) facilitating exchange in their broader business network. The paper contributes to research on customer referencing by explicating its role in value creation on a network level. As one of the first studies on engagement in the B2B context, this paper contributes to the emerging actor engagement research by analyzing how influencing behavior operates in a business network. These insights can help firms to facilitate exchange in complex markets.     

Paths,events and resource use: New developments in understanding innovation processes

The purpose of this paper is to investigate innovation paths, their events and resource use for a wave energy development within the renewable energy sector. An in-depth single case study mixed-method methodology was used to examine a detailed typology of events and develop innovation paths where one category of resources is predominant (technical and commercialization), or where the resources are evenly combined (ambidextrous). The case results highlight the early presence of a new innovation path type (ambidextrous), offer a better understanding of the different resources used along each path type, and show that co-occurrence of events (common events) across paths influences path convergence. As a practical implication, the paper underlines the benefits of ambidexterity and the multifaceted role of government within the business network, requiring the focal organization to re-consider its interactions with various government departments and other agencies.     

Digital servitization: Crossing the perspectives of digitization and servitization

For over three decades now, several product companies around the world have been undertaking servitization paths. They have been devoting growing and substantial efforts to expand their service business. Expanding the service business in addition to their traditional core product business secures long-term growth and strengthens competitive advantages in business-to-business marketplaces. Recently, service business expansion has taken up many of the new digital technologies offered through the digital transformation. Thus, the servitization literature has progressed toward a dialogue on digital servitization . Against this background, the present article introduces the reader to this special issue. It first recalls key aspects of the emerging digital servitization discussion, and then depicts, through illustrative case studies, the growth paths utilized by industrial product companies when they take advantage of the digital servitization process. After discussing how the articles included in this special issue advance the literature, the article develops a number of directions for future research on digital servitization.     

Pharmaceutical marketing through the customer portfolio: Institutional influence and adaptation

This paper discusses the dilemma of managing marketing in institutionalized business contexts. On the basis of a study of pharmaceutical marketing practices it is argued that business aspirations are dependent on understanding institutional influence and adaptation mechanisms on the customer-portfolio level. As relationships are perceived as such mechanisms, understanding network dynamics, institutional co-evolution and actor cognitions are key managerial issues. Furthermore, it is suggested that institutional discontinuities leverage institutional entrepreneurship to a critical extent.     

Decoding network dynamics

Business networks are fluid, yet decoding network dynamics provides a number of methodological challenges. This research illustrates how, by using a technology-bundled business net, the temporal fluidity of the network boundary and the associated processes and events that affect this can be understood. Abductive logic is applied in combination with the concepts of network positions and roles to analyze these processes and events. Empirical observations from a case study embedded in the optical recording media industry spanning the period 2001–2008 are used to illustrate the network dynamics resulting from technological change that drive the evolution of the focal net. The case illustrates that in order to decode network dynamics, a number of aspects need to be considered: how the network boundary is delimited, process, time, events and the conceptual lenses that can provide a basis for analyzing change.     

Firm boundary decisions in solution business: Examining internal vs. external resource integration

This paper examines the drivers that lead manufacturers to choose between an internal versus external resource integration approach as they transition to solution-based business. We emphasize product-based resources and examine drivers for the choice of resource integration approach through four distinct firm boundary conceptions – identity, competence, efficiency, and power. These boundary conceptions are applied to an empirical investigation of two global manufacturers, Wärtsilä and Kone, which have chosen opposite strategies to integrate product-based resources in transitioning to solution business: one opted to internalize the required resources, while the other works with a network of external partners. We develop research propositions to explicate how internal vs. external resource integration approaches in solution business represent distinct paths for manufacturers to grow their underlying product businesses; derive value from integrated resources; manage interdependence between solution components; and position themselves as central integrators of complex solutions. This paper contributes to the existing research by providing a systematic and theoretically inclusive analysis of alternative approaches to organizing solution provision. Previous contributions on these issues are very few and predominantly focus on examining manufacturers’ organization of service provision. This paper provides a complementary view focusing on product-based resources and incorporates a wider range of explanatory theories.     

Flexibility and broadband evolution

This paper focuses on the question of which broadband technologies that are currently available (and/or under development) enable evolutionary paths for broadband (symmetrical bandwidth of 10 Mbps¹) deployment in the local loop, leaving options open for new developments. The paper is relevant to policymakers and telecommunication operators who are faced with emerging technologies and who need to make short-term decisions about upgrading networks under risk and uncertainty. The concept of evolutionary paths and the advantages involved, such as smaller and more flexible investments and an increased adaptability to market developments, are addressed. Several wired and wireless transmission media are discussed on the basis of criteria like network capacity, reach, compatibility, standardization, maturity and technical and geographical scalability. Broadband technologies like ADSL2+, Etherloop, EFMC, CMTS+, Narad networks; EttH, EPON, APON, Optical Ethernet, LMDS, MMDS, FSO and HFR are assessed on the basis of these criteria. Starting from this assessment, migration paths for copper, cable and wireless technologies are presented and discussed.     

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.     

Exploring and exploiting network relationships to commercialize technology: A biofuel case

We seek to understand how ambidexterity of exploring and exploiting is managed in an innovation context. We contribute to the literature by elaborating exploring and exploiting as three processes shared between actors in a dynamic business network. An innovator firm needs to (1) explore the current business network to find partners and gain access to resources, (2) develop business relationships for exploiting the emerging network, and (3) explore and find a network-technology fit inside a future business network. The final process is essential to innovation and commercialization. Further, the quality of the network-technology fit will affect the speed and success of the other two processes. Our contribution provides an understanding of the way in which managers are exploring and exploiting the business network to adapt and commercialize a breakthrough technology. A longitudinal case study of biofuel development and commercialization exemplifies the conceptual issues. Final sections address managerial and research implications.