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.     

Developing network insight

A challenge facing organizations is that of amalgamating possibilities which do not exist in a transparent and concentrated form, but rather as dispersed individual cognitive ‘pictures’ perceived by managers embedded in business networks. Based on our research of business networks involving manufacturers of consumer goods, pharmaceutical companies, producers of semiconductors and telecommunication and utility service providers, we propose the concept of network insight, which does not consist merely of extant pictures held by individual managers, but is grounded in the practice of inter-firm exchange. We argue that developing network insight is a managerial challenge encompassing the amalgamation of dispersed pieces of atomized network pictures through heedful, multilateral interactions. Such a managerial activity transcends the task-specific knowledge base of managerial cognition and leads to objectified organizational learning within a business network. Managers that develop insight in business networks are able to mobilize other actors and create a competitive advantage for their organization that is crucial for innovation and growth.     

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.     

Network position and identity: A language-based perspective on strategizing

This article explores processes of strategizing within business networks by showing how managers employ sensemaking to cope with network paradoxes. It takes the linguistic turn to analyze how participants discursively construct their organizations' identities and positions within a ‘designed’ network context. In doing so, the paper attempts to answer the research question posed so provocatively over a decade ago by Håkansson and Ford (2002): by exploring how companies interact in business networks. Our contribution is to show how firms interact by taking a language-based perspective on strategy to help understand the links between network, organizational and micro-levels of social construction. An in-depth discussion of a case study is presented, with particular emphasis on the identity-constructing processes affecting (and affected by) the positioning and strategizing of various network actors. We conclude by reflecting on the theoretical and practical contributions of our analysis, the latter focusing on tensions in Indigenous business development.     

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.     

Understanding types of organizational networking behaviors in the UK manufacturing sector

This research is aimed at understanding firms' different types of ‘networking behaviors’, i.e., how and why firms affect their strategic network position by activities/routines/practices aimed not just at their business partners, but beyond such direct relationships. Thus, we adopt a network perspective to examine how firms exploit their webs of direct and indirect business relationships in order to assess and embrace the potential opportunities and constraints in the network. Based on the industrial network approach (INA), this exploratory research specifically focuses on networking behaviors in the UK manufacturing sector. Thirty-one semi-structured interviews with executive managers from fifteen firms were conducted. We identify four types of organizational networking behaviors by the way in which firms utilize their web of relationships to achieve certain goals. By using the concept of networking behaviors based on the INA as well as the strong-and-weak-tie argument in economic sociology, purposeful networking behaviors can be categorized into the following: information acquisition, opportunity enabling, strong-tie resource mobilization and weak-tie resource mobilization. These four ‘types’ of organizational networking behaviors provide a deeper understanding of how firms operating in business-to-business exchanges relate to and exploit their webs of direct and indirect relationships, taking into consideration the embeddedness and interconnectedness of the network context.     

International trade related food miles – The case of Canada

At the beginning of the 21st century imports of agricultural and food commodities have become a major part of many nations’ food baskets. Indeed the global food system has several merits for nations, businesses and individual consumers’ well-being. However, as increasing evidence suggests that we are approaching an era of climate change and scarcity of cheap energy sources the sustainability of that system must be examined. One part of any food commodity chain is its ‘food miles’ – the distance the commodity travels from point of production to point of consumption, the required energy and resulting emissions. This paper presents a 1 year ‘snapshot’ of Canada’s total import related food miles. It presents an analysis of the distance imported foods traveled from around the world to major points of consumption in Canada and documents the equivalent carbon dioxide emissions related to those imports. It presents both a macro scale picture of the equivalent emissions related to transportation of imported food and a micro scale picture which focuses on specific commodities consumed in various parts of the country. It then discusses policy implications for food sustainability. Overall the research highlights that about 30% of the agricultural and food commodities consumed in Canada are imported, resulting in ‘food miles’ of over 61 billion tonnes km, leading to annual emissions of 3.3 million metric tonnes of CO₂. Of the various agriculture and food commodities studied, fruits and vegetables had the highest food miles related emissions.     

Network pictures as a research device: Developing a tool to capture actors' perceptions in organizational networks

In business networks, strategic actions are believed to be guided by actors' subjective views or perceptions of their surroundings. Researchers thus consider these perceptions as important for understanding network related phenomena. Despite their recognized importance, there has not been much research aimed at developing a way to systematically capture these perceptions. The purpose of this paper is to show how actors' subjective views of the business network can be analyzed using the research device of network pictures. This is accomplished by developing an empirically derived dimensional model for capturing different aspects of an actor's subjective view. We exemplify how the developed device can be applied, and illustrate how there seem to be ‘types’ of ways of perceiving the business network. This paper therefore represents a methodological contribution through the development of a tool that may change researchers' practices in understanding business networks.     

Capabilities, innovation and competitive advantage

This special issue was aimed at advancing the literature examining the role of capabilities in innovation-based competitive strategy. Whilst the innovation literature has over the years moved away from its ‘product innovation’ pre-occupation to capture the role of other forms of innovation in value creation, the capability view has progressed from its ‘rigid’ or ‘static’ view to a ‘dynamic’ view in an effort to capture market dynamism. Despite the recent theoretical advancements the dynamic capability view still lacks a strong empirical base. Contributors to the capability literature over the recent years have adopted multiple research methods to capture capabilities that include cross-sectional designs, case studies and longitudinal studies. Within this backdrop, the articles that were selected for this special issue covers both conceptual and empirical approaches to examine the relationship between capabilities and technical and non-technical innovations and performance outcomes. This essay provides a future research agenda to advance this promising research field. It highlights the need for clearer conceptualizations and development of measures of dynamic capabilities, environmental conditions that underpin the development of dynamic capabilities within the firm and research into the much debated relationship between dynamic capabilities and competitive advantage and organizational performance.     

A dynamic capabilities-based framework of organizational sensemaking through combinative capabilities towards exploratory and exploitative product innovation in turbulent environments

This study develops a dynamic capabilities-based framework of organizational sensemaking through combinative capabilities towards exploratory and exploitative product innovation. Organizational sensemaking helps organizations develop cognitive maps of turbulent environments through its construction of shared interpretations of environmental changes. We argue, however, that successful exploratory and exploitative product innovation are not guaranteed by organizational sensemaking alone, but instead depend on how firms' capabilities synergistically combine and transform knowledge resources. Organizational sensemaking and combinative capabilities are together positioned as important dynamic capabilities. The dynamic capabilities-based framework is applied to explain why and how organizational sensemaking determining superior exploratory and exploitative product innovation in turbulent environments is realized by combinative capabilities. Furthermore, the paper examines the differential effects of combinative capabilities on the firm's exploratory versus exploitative product innovation. Firms can better understand how to leverage different type of combinative capabilities for optimal outcomes.     

Solution business models: Transformation along four continua

Using a business model perspective, we identify four continua that are of specific relevance for industrial firms transforming toward solution business models: customer embeddedness, offering integratedness, operational adaptiveness, and organizational networkedness. Using these continua, we explore the opportunities and challenges related to solution business model development in two different business logics that are of particular importance in an industrial context: ‘installed-base’ (IB) and ‘input-to-process’ (I2P). The paper draws on eight independent research projects, spanning an eleven-year period, involving a total of 52 multinational enterprises. The findings show that the nature and importance of the continua differ between the I2P and IB business logics. IB firms can almost naturally transition toward solutions, usually through increasing customer embeddedness and offering integratedness, and then by addressing issues around the other continua. For I2P firms, the changes needed are less transitional. Rather, they have to completely change their mental models and address the development needs on all continua simultaneously.     

When the glass is half full and half empty: CEOs' ambivalent interpretations of strategic issues

Organizational scholars have highlighted the importance of interpretive ambivalence for mindfulness, creativity, and strategic change. Ambivalence occurs when an issue is seen simultaneously as positive and negative. We examine organizational factors that influence the propensity of organizational leaders to evaluate a new strategic issue ambivalently. Data come from a survey of 220 German CEOs confronted with the enlargement of the European Union. We find that CEOs of firms with a more ambidextrous strategic orientation and a moderate sense of organizational control over their environment are most likely to be ambivalent about this issue. Our findings affirm the prevalence of interpretive ambivalence at the executive level and suggest ways for organizations to promote or prevent ambivalence in strategic sensemaking. Copyright © 2010 John Wiley & Sons, Ltd.     

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.     

Constructing and contesting markets through the market object

This paper focuses on the work that market actors undertake in order to stabilize and de-stabilize market objects. We briefly revisit Igor Ansoff's classic product–market strategy matrix to show how marketing management literature typically equates stability in markets with commodification and inertia. To escape this inertia, marketers often ‘warm up’ or destabilize existing market objects by changing the material bases of the object, for instance in incremental product development. But this ‘warming up’ invites other market actors to also question or destabilize the networks that are supposed to hold the market object in its new (market) space. We utilize archival research to trace one case each of market and product development within the pharmaceutical realm, demonstrating: first, the effort market actors put into ‘cooling down’ and ‘warming up’ market objects; second, how contested such efforts can be; and third, how the object's material attachments may limit its symbolic malleability.     

Interest,sensemaking and adaptive processes in emerging business networks — An Australian biofuel case

We contribute to the literature, firstly by elaborating sensemaking as an inter-organizational process. Second, we contribute by displaying how processual research captures reality in flight. Third, an interest model is developed in conjunction with how managers jointly develop an understanding and adapt their surrounding business network, so as to fit R&D into the social-economic environment. We develop the concept of inter-organizational sensemaking by elaborating the in-between; a joint and multi-actor understanding of the way resources-activities and the network of actors can change. Sensemaking is undertaken purposefully and so the interests of society, individual managers, firms and the mutual interests inherent with inter-organizational change also play a part. Our processual method studies events and activities through sequences of phases and periods defined by the researchers. A longitudinal case study of an emergent biofuel network exemplifies this approach. The paper discusses future research and managerial implications.     

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.     

Managerial perceptions of service-infused IORs in China & India: A discursive view of value co-creation

This paper explores the managerial challenges facing firms seeking to build relationships with other network actors while doing business in foreign markets. By taking a critical perspective on an area of increasing importance in both manufacturing and service sectors, that of value co-creation, the paper explores how managers in different cultural contexts make sense of the notion of ‘value’ in inter-organizational B2B relationships between New Zealand service and service-infused supplier firms and buyers in China and India. From an analysis of the interview-based accounts on both sides of the buyer–seller dyad marked differences emerge regarding value-creation within managers' discourse around partnerships, collaboration and cooperation. Our findings suggest that the Indian manager's discursive use of ‘partnership’ draws on service-dominant logic in viewing this type of interaction as a means for co-creating value; they and their New Zealand suppliers are jointly involved in co-creating value within a service system, creating value-in-use. In contrast, the predominant perspective seen in the discourse of Chinese managers is the use of cooperation as a means of making transactions more cost-effective, or to fill gaps in their supply chains, resulting in the creation of transaction-based, co-production of value, which suggests a value-in-exchange orientation. In both cases, there is repeated reference to more peripheral actors whose efforts result in what we interpret as network value creation, based on their interactions with actors within the buyer–seller dyad.     

Antecedents and consequences of team sensemaking capability in product development projects

With the increasing popularity of organizational sensemaking in the literature, sensemaking capability of firms attracts many researchers and practitioners from different fields. Nevertheless, sensemaking capability is rarely addressed in the new product development (NPD) project teams in the technology and innovation management literature. Specifically, we know little about what team sensemaking capability is, its ingredients and benefits, and how it works in NPD projects (e.g., its antecedents and consequences). By investigating 92 NPD project teams, we found that (1) team sensemaking capability, which is composed of internal and external communication, information gathering, information classification, building shared mental models, and taking experimental actions, has a positive impact on the information implementation and speed‐to‐market; (2) information implementation and speed‐to‐market mediate the relationship between team sensemaking capability and new product success; and (3) team sensemaking capability mediates the relationship between team processes and information implementation and partially mediates the relationship between team processes and speed‐to‐market. We also found that team autonomy, interpersonal trust among team members, and open‐mindedness of team members positively influence the development of team sensemaking capability. Theoretical and managerial implications of the study findings are discussed.     

Agricultural technology adoption and poverty reduction: A propensity-score matching analysis for rural Bangladesh

This study aims at shedding some light on the potential impact of agricultural technology adoption on poverty alleviation strategies. It does so through an empirical investigation of the relationship between technological change, of the Green Revolution type, and wellbeing of smallholder farm households in two rural Bangladeshi regions. As technology adoption is not randomly assigned but there is ‘self-selection into treatment’, the paper tackles a methodological issue in assessing the ‘causal’ effect of technology on farm-household wellbeing through the non-parametric ‘p-score matching analysis’. It pursues a targeted evaluation of whether adopting a modern seed technology causes resource-poor farmers to improve their income and decrease the propensity to fall below the poverty line. It finds a robust and positive effect of agricultural technology adoption on farm household wellbeing suggesting that there is a large scope for enhancing the role of agricultural technology in ‘directly’ contributing to poverty alleviation.