Sensemaking in business networks: Introducing dottograms to analyse network changes

The issue of how different actors in a network understand changes to their industry remains an under-researched but crucially important area. According to the industrial network approach, companies interact according to their perceptions of the relevant network environment and their subjective sensemaking of the network logic and exchange mechanisms relating to the activities, resources, and actor bonds. Using a case study of the Norwegian/Japanese seafood distribution system, we propose a methodology that allows us to better understand these perceptions. We develop an analytical method based on ‘dottograms’ which facilitates a more detailed understanding of change within networks. In particular, we show how the dimensions of time (past, present and future changes) and space (change at actor, dyad or network level) can be better understood, and also how the method facilitates our understanding by ascribing reasons for the change. As such, we provide a methodological contribution to research on business networks and change.     

Using actors' perceptions of network roles and positions to understand network dynamics

This article explores network dynamics by analysing how actors make sense of time and space in business networks, and how they act based on these perceptions. The time dimension is understood here as actors' perceptions of past, present and future changes in their network. The space dimension is understood, first, in terms of the network position a company holds in relation to its business partners, and secondly, in terms of the network role it enacts. As such, this study relates three pivotal concepts in industrial marketing: network change, network position, and network role. The link between these three relates to the interdependencies within a network, in that if one company attempts to change its position, this will in turn affect the position of other companies. Moreover, actors' attempts to change their position or role in the network are directed by their subjective sensemaking or perceptions of their surrounding network. In this article we posit that in order to understand network dynamics we must analyse how actors attempt to affect change based on their perceptions of their positions and roles in their network environment. Our analysis suggests that although there are similarities between perceptions by actors holding similar positions in the network, such network positions alone cannot explain their actions. Rather, differences in actors' interpretations and enactments of their network role are necessary to explain their networking activities. We use an extensive case study of the changing distribution structure for seafood in Norway and Japan to exemplify these points.     

The constitution of networks

The idea of a constitution of networks may be a useful addition to our ways of understanding what happens within the business landscape. We describe a constitution of networks as a system of values, norms, rules and other conventions that are shared by actors in business networks. Whether by intention or not, the constitution of networks provides a framework within which interaction among actors takes place. We argue that companies invest in the selection and replication of interaction practices that evolve over time as customs or common use. This involves interaction aimed at developing or accessing resources for future use in the relationships between actors. In this way, the constitution of networks circumscribes the actors' appreciations and expectations about how they and others should conduct business.This study is based on empirical research conducted between 2002 and 2005 in business networks of consumer goods in the United Kingdom. Significant actors include multinational consumer goods companies, large grocery retailers, consumers and public authorities.     

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.     

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.     

Managing in complex business networks

For many years, research and management thinking has focused on understanding business relationships and networks. Now, the focus is shifting to managing business relationships and networks. This new approach focus poses two questions. Since networks are loosely coupled systems, to what extent are business networks manageable? Furthermore, how can a firm's ability to manage a network be characterized and measured? This paper addresses these two questions by synthesizing the current state of knowledge on management issues in networks and the contribution to managerial abilities in complex relationships. The discussion leads to a set of propositions describing the abilities firms will need to successfully manage complex business networks.     

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.     

Business service networks and their process of emergence: The case of the Health Cluster Portugal

Business services have been receiving increasing attention from academics, practitioners and policy-makers. Despite the growing interest, this field of research suffers from several limitations: it draws mostly on services marketing theory, and it is grounded mostly in monadic and dyadic studies. This paper contributes to the advance of business services research by addressing these limitations with regard to a specific service-related issue. We carry out an interdisciplinary study by integrating among others an industrial network approach (INA) into the services area, and we thus develop the research at a network level by adopting a services network perspective; furthermore, the study is carried out in a business-to-business context by looking into a health cluster: the Health Cluster Portugal. The article addresses one particular aspect of business services networks: their emergence. We propose a conceptual framework that draws on process-based research and integrates theories from other bodies of research, allowing a rich understanding of how a business service network is created. Our findings point to discontinuities along the emergence of such networks, showing that there is an iterative process underlying their formation, with different theories playing a predominant explanatory role at different stages. This paper contributes to the wider body of literature on services research by promoting the integration of the INA and other process-related approaches in the area of business services networks, and also provides practitioners and policy-makers with a structured framework to understand how an intentional ‘bottom–up’ business service network may be created or orchestrated.     

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.     

An activities-based approach to network management: An explorative study

Over the last few decades, the industrial marketing literature and the business network literature have promoted a holistic approach to marketing and provided a framework for understanding interorganizational networks. However, our understanding of how interorganizational networks govern themselves when developing innovations is still limited. Most network management literature does not focus on the activities employed by network actors and/or does not recognize that there may be different modes of network management. This study explores how, why and in which combination network management activities are employed in a network and in doing so proposes a new conceptualization of network management. Using primary and secondary data pertaining to eleven innovation projects, this study reveals how network management consists of combinations of (rather than individual) management activities undertaken to manage a network. This study identifies three distinct modes of network management: basically coordinated, control-oriented and reward-oriented. Moreover, this study proposes that network actors try to match the management mode to their prevailing mental model as well as the type of network (e.g. in terms of project innovativeness).     

New value creation in business networks: The role of collective action in constructing system-level goals

This study focuses on collective goal formation in business networks aimed toward new value creation and innovation. Previous research has depicted such networks as value-creating systems or meta-organizations pursuing a system-level goal. We develop these views by addressing a research question: How can multiple organizations collectively form a system-level goal, and how does this affect new value creation at the level of the whole network? We conducted a multi-case study of two Finnish health care networks in which multiple diverse organizations participated in the formation of a system-level goal for the network and developed innovative joint treatment practices for the better care of patients. We derived six propositions and developed a conceptual model explaining how the collective formation of a system-level goal is linked to network-level value creation by increasing network actors' resource commitment. Furthermore, we introduced important moderating factors, network architects and domain similarity, which affect collective goal formation. We claim that the conceptual model strengthens pre-existing theories on managing business networks through a system-level goal, collective action, framing, agenda construction, and institutional mobilization. We contribute especially to previous research on networks aiming for new value creation.     

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.     

Rediscovering strategic content in ‘strong process’ research on business network innovation

A strong process view on business networks takes ‘becoming’ as a starting point for understanding business networks and innovation. This view tends to leave the role of strategic content implicit and underdeveloped. Yet, embracing content from a process angle is important to obtain insight in the role of strategic intent and value transformation. A philosophical architecture for addressing this gap is currently lacking. In the context of business network innovation, this paper seeks to explore how content can remain theoretically relevant and how it can be inserted in a strong process view underpinning industrial marketing research.This conceptual paper makes a distinction between content-centric, process-content co-evolution, and process-centric philosophies. These are mutually exclusive and fail to cater to the gap introduced. A fourth strategy is introduced that adopts the process-centric view as a foundation but uses pragmatism and encapsulation to reach out to content research. The paper offers methodological considerations for empirical research and applies the resulting approach to industrial marketing. It concludes with implications for research in industrial marketing.     

Reinventing a business model in industrial networks: Implications for customers' brand perceptions

Although researchers recognize the need for established market-centered business models that address and satisfy consumer's needs, little research has been done on the link between a customer's perception and a business model innovation (BMI). We addressed this research opportunity by conducting a case study encompassing 394 respondents to explore how a BMI affects customers' brand perceptions, distinguishing between their brand trust, brand loyalty, and brand equity. We conceptualize a BMI from an industrial network perspective and decompose the effect of different BMI dimensions: value offering innovation (VOI), value architecture innovation (VAI), and revenue model innovation (RMI). Our results show that a VOI has a positive impact on brand equity and a negative impact on brand loyalty. Further, a VAI has an inverted u-shaped relationship with brand trust, whereas an RMI has a positive impact on brand trust. In turn, brand trust fully mediates the relationships between an RMI and brand loyalty and an RMI and brand equity. Our insights contribute to BMI research from a customer-centric perspective. In particular, we extend our knowledge of BMIs by offering a more granular understanding of how different BMI dimensions affect a customer's brand perceptions. We contribute to industrial networks literature by offering rich and novel insights to purposefully manage an industrial network's BMI.     

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.     

International research teams as analysts of industrial business networks

This paper analyzes case studies in the context of industrial business networks, and in particular from the IMP (Industrial Marketing and Purchasing Group) perspective. Two features have been prominent in this research tradition: collaboration in international research teams and interest in business between international customers and their suppliers. Still, researchers seldom discuss the challenges with the international aspects of the research team (as the subject of study) or of the business relations (as the object of study). This paper shows the complications of analyzing international business relations, namely, relations that cross national boundaries, and investigates how an international research team can tackle the challenges of international business network studies. The key contributions are, firstly, to indicate the lack of attention on the methodological requirements and opportunities that the international features create for the analysis of business networks and, secondly, to investigate how collaboration in an international research team may advance the analysis of both international industrial marketing relations and broader 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.     

Strategizing as networking for new ventures

Strategizing as networking has become a powerful theme particularly in the IMP tradition. This paper focuses on new ventures and how these develop through the relationships formed by them. Strategizing through network development concerns how the firm perceives its network of interconnected relationships and how it interacts with other actors in relation to these perceptions. The aim of the paper is to identify patterns in the network development of new ventures and in how their strategizing relates to this development. The paper is based on a longitudinal case study of three new ventures. The case study captures the firms' ‘stories’ of how the networks of relationships have developed since their start. Based on the case illustrations we identify three patterns of how the new ventures strategize in their networking and how they network in their strategizing. These patterns concern: (1) exploration and exploitation of similarities, (2) knowledge sharing among customers, and (3) developing relationships with mediating partners. All three rely on interaction with counterparts that provide access to external resources which is of particular importance for new ventures.     

Temporality of resource adjustments in business networks during severe economic recession

Business cycles are not a new phenomenon. Firms have in the past found ways to, more or less successfully, adjust their resources to such cyclical changes. However, the combination of a global crisis in financial markets and a severe down turn in demand on globally interdependent markets in the “real” economy is unprecedented which suggests that established business practices to handle cyclical variations are challenged. In this article we focus on temporal aspects of resource adjustments, taking into account also network interdependencies in contemporary markets. We develop a conceptual framework towards understanding how business actors construct temporality of resource adjustment activities. We relate temporal orientation of actors to temporal profiles of activities, seeing them as both influenced by actors' network orientation.     

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.