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.     

Re-appraising interaction and process for industrial network research: The future plunging mirror hall metaphor

Constructivist and realist research is undertaken in the business relationship and network approach of the Industrial Marketing and Purchasing Group. These two divergent research perspectives seek a different form of contextual understanding vs. general knowledge. They are not incommensurable as one can gain insights from the other. But a researcher must know and understand both perspectives and sometimes be able to see when a writer is playing almost a middle ground to make a specific point. To provide a broader understanding of the ontological distinctions and their ramifications for researching and translating meanings concerning business networks we introduce the temporal mirror hall metaphor. We propose that: (i) researchers should avoid reading and understanding only a single research perspective, (ii) research is a social temporal process embedded in a research community, (iii) understanding different researcher perspectives is necessary for a constructivist scholar working in a world of realist education, and (iv) realist researchers need constructivist research to change and develop systematized theories. The paper extends specific advice to constructivist researchers undertaking longitudinal studies of interaction in business networks. Realist researchers will find intriguing the comparisons and refractions, as well as illusions, in the temporalities of the mirror hall.     

Strategic management and the philosophy of science: the case for a constructivist methodology

In this paper, we suggest that constructivism has the potential to inform research in strategic management. The realist paradigm currently dominates strategy research, and constructivism, a well‐established tradition in the philosophy of science, is often ignored. However, a study of strategy literature and research reveals that it is drawn upon more frequently than is explicitly acknowledged. Constructivism occupies a methodological space characterized by ontological realism and epistemological relativism. Ontological realism is an important cornerstone of a field as applied as strategy, while epistemological relativism helps us explore the constructed nature of the field, where the researcher is an active participant rather than a reactor or information processor. In this paper, we demonstrate the precedents and possibilities for constructivist research in strategic management. We examine some of the existent constructivist works in the strategy literature, and point to specific techniques, including historical analysis, to demonstrate how this perspective may advance the boundaries of strategy research. Copyright © 2000 John Wiley & Sons, Ltd.     

Network picturing: An action research study of strategizing in business networks

Our paper is concerned with how managers understand their surrounding network and what strategic actions they take based on this insight. Recent research in the areas of network management and business relationships shows increasing interest in the interplay between cognition and action, particularly on how managers relate perceptions about their business network (“network picturing”) to decision-making and strategizing activities. In this study, we apply a novel research approach combining process research and action research methodology. Our sample is introduced to business network theories and concepts, and the use and adaptation of these concepts results in managerial options being articulated and applied. Our findings add new insight in the field of network strategy and network picturing. Network picturing represents a way to understand the boundaries of the firm and how this understanding affects managers' decisions. This differs from the fundamental distinction between the external and the internal environments of classical strategy analysis. In terms of network picturing, strategizing is a way to understand the resulting actions or network outcomes that managers see as viable within their surrounding network. We also provide a conceptual process exercise as an example of how this insight can be relevant for managers in their decision-making processes.     

Network management in the era of ecosystems: Systematic review and management framework

Business-to-business (B2B) and business network scholars have begun adopting an “ecosystem” approach to describe the increasing interdependence and co-evolution of contemporary business and innovation activities. Although the concept is useful in communicating these issues, the challenge is the lack of overall understanding of the added value of the approach, its particular theoretical logic, and its links to network management. This systematic review analyzes the usage of the ecosystem concept in B2B journals and its implications for network management. Common themes are distilled, the specific features of the ecosystem approach are examined, and four categories of the ecosystem approach are identified: (a) competition and evolution; (b) emergence and disruption; (c) stable business exchange; and (d) value co-creation. We also examine shifts in management opportunities and challenges related to these developments. Finally, we suggest a revised network management framework, where we address the implications of utilizing an ecosystem layer for the analysis, as well as using the ecosystem as a perspective in the management of business and innovation networks. Overall, this study contributes to the literature by providing a coherence-seeking, systematic outlook on the increasingly useful, but still nascent and ambiguously utilized ecosystem approach.     

Resolving the start-up identity crisis: Strategizing in a network context

The objective of the present study is to examine the strategizing of start-ups in a network context. The paper depicts start-up strategizing as an intertwined activity of identification and boundary-drawing. The questions of network identity and network boundaries become salient in times of disengagement by a primary customer or when there is a need for significant redirection of the business during what is referred to as a network identity crisis. The study emphasizes the viewpoint of an entrepreneur as strategist and builds on the concept of network identity to stress the socially structured individual cognition of who the organization is in light of its network connections. We study strategizing in four start-ups with different identity crises. By applying a grounded theory approach and Gioia methodology, the paper models the dynamics of restart strategizing in terms of its internal and external triggers and the choices when managing three identity-related contradictions. Furthermore, we characterize four alternative restart strategies connected to the identities and boundaries perceived by the entrepreneurs. By embracing the way start-up's identity and its strategy evolve interdependently in relation to the network dynamics, the model contributes to our understanding of those strategizing activities whereby restart can occur.     

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.     

The impact of network configurations on value constellations in business markets — The case of an innovation network

A growing body of scholars are advocating a better understanding of how value is created in business networks, rather than merely in business relationships or at the level of single actors. Among such networks, innovation networks, i.e. the configurations of strategic entrepreneurial nets aimed at improving the effectiveness of innovation performance, have come under scrutiny in the business marketing literature. However, research that explicitly connects value considerations with innovation network configurations is still in its infancy, with empirical evidence being notably scarce. This study is aimed at identifying if and how network configurations affect value constellation aspects in business networks, in terms of value recipients and value outcomes. We interviewed key informants representing 46 high-technology entrepreneurial firms co-located in an innovation network (Daresbury Science and Technology Park — UK). Our study identifies that different network configurations can co-exist in the same overall network; these, nevertheless, are not alternative independent structures, but rather they interact with each other through actors spanning their boundaries. Our study thus provides an understanding of network configurations relating to specific value consequences, but also provides evidence relating to the interactions between different configurations. By doing this, we establish a bridge between a business marketing and a strategy perspective on value in networks. Important managerial implications and implications for policy makers also emerge from our study.     

How to undertake great cross-disciplinary research

As an applied social science, business-to-business research is inherently cross-disciplinary. The general theories that provide insight into business relationships, systems, and markets have disciplinary foundations in the economics, psychology, sociology, and management disciplines. When conducting cross-disciplinary research, academic researchers, like their counterparts in industry, must overcome functional silos. Depending on the type of research challenge, a multi-disciplinary approach may be required; however, differences in incentives, culture, terminology and jargon, and so forth all can lead to opportunistic and counterproductive behavior. The purpose of this editorial is to explore how to undertake cross-disciplinary research that advances knowledge and understanding in the domain of business-to-business research. To achieve this purpose, we elaborate on the theorizing processes; we examine how to break cross-disciplinary boundaries; and we provide practical guidelines for undertaking cross-disciplinary research.     

Where can capabilities come from? network ties and capability acquisition in business groups

While strategy researchers have devoted considerable attention to the role of firm‐specific capabilities in the pursuit of competitive advantage, less attention has been directed at how firms obtain these capabilities from outside their boundaries. In this study, we examine how firms' multiplex network ties in business groups represent one important source of capability acquisition. Our focus allows us to go beyond the traditional focus on network structure and offer a novel contingency model that specifies how different types of network ties (e.g., buyer‐supplier, equity, and director), individually and in complementary combination, will differentially affect the process of R&D capability acquisition. We also offer an original analysis of how other aspects of network structure (i.e., network density) in business groups affect the efficacy of network ties on R&D capability. Empirically, we provide an original contribution to the capabilities literature by utilizing a stochastic frontier estimation to rigorously measure firm capabilities, and we demonstrate the value of this approach using longitudinal data on business groups in emerging economies. We close by discussing the implications of our supportive results for future research on firm capabilities, organizational networks, and business groups. Copyright © 2010 John Wiley & Sons, Ltd.     

The network structure of big business in Taiwan

This paper takes a network approach to understanding ownership patterns and director interlocks in Taiwan. In particular, this paper analyzes ties among Taiwan’s top 200 publicly listed companies in 1990 and 2000. The speed of change in Taiwan’s economic organization during the period has been striking. Not only have the identities of many of Taiwan’s largest firms changed, there seems to have been a substantial pruning and thinning of director ties over time and also a substantial transformation of the ownership network. What continuity remains appears to be largely a consequence of business group membership, and the strength of those ties appears to be considerable. Overall, this research finds that Taiwan’s financial sector has been quite central to the island’s big business network, that business groups are an extremely important category for understanding patterns of ownership ties, and that most director interlocks in Taiwan appear to cross industry boundaries rather than occur within them.     

Business relationships in the industrial network literature: Three approaches and their underlying assumptions

The industrial network literature contains underlying assumptions about the nature of business relationships. We use change as a vehicle to unearth these assumptions and conduct a systematic review of change in business relationships in the industrial network literature. We identify three approaches to business relationships: agency, structure and practice. Our research contributes to the industrial network literature by explicating how change in business relationships is derived implicitly from what people do, the surrounding structures, or the logic underlying their action. This research helps provide construct clarity by elaborating the key assumptions and key constructs of the three approaches as well their implications for business relationships research.     

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.     

A kaleidoscope of business network dynamics: Rotating process theories to reveal network microfoundations

Although networks have been the epicenter of research in B2B marketing for many years, our understanding of their dynamics remains in its formative stages. In this paper, we explore how the integration of various process theories broadens our perspective of business network dynamics and allows us to study the microfoundations of network change and stability. Our empirical case shows that as we rotate through each process theory, a new combination of network microfoundations appears. We contribute to the business network literature by: 1) providing a nuanced and refined understanding of network microfoundations; and 2) showing how the use of different process lenses alters the mix of microfoundations revealed.     

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.     

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.     

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.     

Crowdfunding networks: Structure,dynamics and critical capabilities

Crowdfunding platforms – bringing together entrepreneurs, investors and customers – have grown rapidly over recent years. Crowdfunding networks are open, multisided markets that match founders and funders on crowdfunding platforms. The unique structure of these networks blends social and business networks and comprises a complex array of closer and more distant network relationships. Research investigating the characteristics of these open and highly dynamic network structures is in its infancy and capabilities critical to operating in them are under-explored. Thus, this study follows an abductive reasoning process to understand critical capabilities for influencing and orchestrating crowdfunding networks. It draws on a thematic content analysis of 1484 blog entries written by crowdfunding experts and a comprehensive review of (i) literature on crowdfunding networks and (ii) five literature streams dealing with dynamic capabilities in evolving network structures. As a substantial contribution, this research delineates a portfolio of four collaborative capabilities – visioning, dynamic business modelling, engaging, and attaining social continuity – essential for operating successfully in crowdfunding networks. These new collaborative capability sets assume a new understanding of agency as a continuum of managerial and collective agency, an understanding that is novel within the network management and the capabilities literature.     

Supply network dynamics as a source of new business

Supply networks where operational control extends well over organizational boundaries have emerged in industries producing relatively complex and customized products with tight profit margins. Products like ships, automobiles and telecommunication systems incorporate complex design and engineering skills that are produced through a tier-structured, multi-level supply networks. Efficiency in these networks has stemmed from specialization and cost efficiency in individual value adding operations. This paper demonstrates how supplier networks have evolved and how the inherent dynamics of these networks generate constantly new business opportunities for fast moving companies with a clear focus on operational efficiency. We use action research methodology on cases from the shipbuilding and constructions industry to document some of the dynamic features of supply networks. This insight is then applied to the electronics manufacturing services business to explain the fundamentals of successful operations in this highly competitive business with ever narrowing margins. In this dynamic market of contract manufacturing companies with constant focus on the reduction of production lead times by incorporating value added operations either physically or logically to maintain and recreate profitable business. To succeed in doing this, issues related to industrial parks, local tacit knowledge and reverse/repair logistics must be managed in cross-organizational manner. We conclude that there is an ever-changing limit to the expansion of supplier networks through specialization and cost efficiency, and that at one point contracting and integrating parts of the supply network will create operationally outperforming business models that further boost the inherent dynamics of supply networks.     

Strategic flexibility, rigidity and barriers to the development of absorptive capacity in business markets: Themes and research perspectives

The marketing and strategy literature hail strategic flexibility as a key success factor in creating continuously customer value and generating competitive advantage. However, empirical evidence indicates that rigidity in market strategies and actions is more the rule than the exception in organizations. The focus of this special issue is on better understanding rigidity and flexibility in business markets. This lead article seeks to elaborate on why companies face rigidity and how they can create flexibility. To do this, we relate rigidity in organizations to the concepts of dominant logic, industry recipe and persistence. The case illustrations highlight barriers to the development of absorptive capacity in business organizations. Identifying such barriers is a first step in better understanding how companies can remain agile and flexible in demanding and fast changing markets. The paper then proceeds with a brief introduction to the other contributions of this special issue and concludes with a research agenda.