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Developing relationships in business networks

TL;DR: In this article, the authors apply the network approach to the analysis of business relationships in a global context, drawing on a number of international case studies, giving rise to theoretical and practical managerial insights and a different way of conceptualizing companies within markets.
Abstract: This edited collection applies the network approach to the analysis of business relationships in a global context. Drawing on a number of international case studies, a "network approach" is developed, giving rise to theoretical and practical managerial insights and a different way of conceptualizing companies within markets. New angles emerge on traditional problems of business management, with some novel implications which should challenge established ways to analyze business markets. Previous publications by these authors include, "Corporate Technological Behaviour", "Professional Purchasing" and "Managing Innovation Within Networks".

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Citations
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Journal ArticleDOI
TL;DR: In this article, the authors present a model that incorporates this overall argument in the form of a series of hypothesized relationships between different dimensions of social capital and the main mechanisms and proces.
Abstract: Scholars of the theory of the firm have begun to emphasize the sources and conditions of what has been described as “the organizational advantage,” rather than focus on the causes and consequences of market failure. Typically, researchers see such organizational advantage as accruing from the particular capabilities organizations have for creating and sharing knowledge. In this article we seek to contribute to this body of work by developing the following arguments: (1) social capital facilitates the creation of new intellectual capital; (2) organizations, as institutional settings, are conducive to the development of high levels of social capital; and (3) it is because of their more dense social capital that firms, within certain limits, have an advantage over markets in creating and sharing intellectual capital. We present a model that incorporates this overall argument in the form of a series of hypothesized relationships between different dimensions of social capital and the main mechanisms and proces...

15,365 citations


Cites background from "Developing relationships in busines..."

  • ...…use the concept of the relational dimension of social capital to refer to those assets created and leveraged through relationships, and parallel to what Lindenberg (1996) describes as behavioral, as opposed to structural, embeddedness and what Hakansson and Snehota (1995) refer to as "actor bonds."...

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  • ...…in this cluster are trust and trustworthiness (Fukuyama, 1995; Putnam, 1993), norms and sanctions (Coleman, 1990; Putnam, 1995), obligations and expectations (Burt, 1992; Coleman, 1990; Granovetter, 1985; Mauss, 1954), and identity and identification (Hakansson & Snehota, 1995; Merton, 1968)....

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  • ...We have argued that these conditions typically occur more within organizations than in neoclassical markets, but they may also be found in particular forms of interorganizational relationship (Baker, 1990; Hakansson & Snehota, 1995; Larson, 1992; Powell, 1996; Ring & Van de Ven, 1992, 1994)....

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Journal ArticleDOI
TL;DR: This article highlights and clarifies the salient issues associated with S-D logic and updates the original foundational premises (FPs) and adds an FP.
Abstract: Since the introductory article for what has become known as the “service-dominant (S-D) logic of marketing,” “Evolving to a New Dominant Logic for Marketing,” was published in the Journal of Marketing (Vargo, S. L., & Lusch, R. F. (2004a)), there has been considerable discussion and elaboration of its specifics. This article highlights and clarifies the salient issues associated with S-D logic and updates the original foundational premises (FPs) and adds an FP. Directions for future work are also discussed.

6,323 citations


Cites methods from "Developing relationships in busines..."

  • ...With something less than complete comfort, we have chosen to adopt the term that the IPM Group (and others) uses (e.g., Hakansson and Snehota 1995): “actors.”...

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Journal ArticleDOI
TL;DR: In this article, the relationships among the structural, relational, and cogni cation of a large multinational electronics company were examined using data collected from multiple respondents in all the business units of the company.
Abstract: Using data collected from multiple respondents in all the business units of a large multinational electronics company, we examined the relationships both among the structural, relational, and cogni...

5,621 citations

Journal ArticleDOI
TL;DR: The Uppsala internationalization process model was revisited in the light of changes in business practices and theoretical advances that have been made since 1977 as mentioned in this paper, and the change mechanisms in the revised model are essentially the same as those in the original version, although they add trust-building and knowledge creation, the latter to recognize the fact that new knowledge is developed in relationships.
Abstract: The Uppsala internationalization process model is revisited in the light of changes in business practices and theoretical advances that have been made since 1977. Now the business environment is viewed as a web of relationships, a network, rather than as a neoclassical market with many independent suppliers and customers. Outsidership, in relation to the relevant network, more than psychic distance, is the root of uncertainty. The change mechanisms in the revised model are essentially the same as those in the original version, although we add trust-building and knowledge creation, the latter to recognize the fact that new knowledge is developed in relationships.

3,700 citations


Cites result from "Developing relationships in busines..."

  • ...This claim is also consistent with the business network view, where much is contingent on existing relationships (Håkansson & Snehota, 1995)....

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Journal ArticleDOI
TL;DR: In this article, the authors present a framework for supply chain management as well as questions for how it might be implemented and questions for future research, and case studies conducted at several companies and involving multiple members of supply chains.

2,848 citations


Cites background from "Developing relationships in busines..."

  • ...The results of empirical research by Håkansson and Snehota stressed that “the structure of activities within and between companies is a critical cornerstone of creating unique and superior supply chain performance” [40]....

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  • ...Some links are more critical than others [40]....

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References
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Book ChapterDOI
TL;DR: In this article, the authors examined the link between firm resources and sustained competitive advantage and analyzed the potential of several firm resources for generating sustained competitive advantages, including value, rareness, imitability, and substitutability.

46,648 citations

Journal ArticleDOI
TL;DR: In this article, the extent to which economic action is embedded in structures of social relations, in modern industrial society, is examined, and it is argued that reformist economists who attempt to bring social structure back in do so in the "oversocialized" way criticized by Dennis Wrong.
Abstract: How behavior and institutions are affected by social relations is one of the classic questions of social theory. This paper concerns the extent to which economic action is embedded in structures of social relations, in modern industrial society. Although the usual neoclasical accounts provide an "undersocialized" or atomized-actor explanation of such action, reformist economists who attempt to bring social structure back in do so in the "oversocialized" way criticized by Dennis Wrong. Under-and oversocialized accounts are paradoxically similar in their neglect of ongoing structures of social relations, and a sophisticated account of economic action must consider its embeddedness in such structures. The argument in illustrated by a critique of Oliver Williamson's "markets and hierarchies" research program.

25,601 citations


"Developing relationships in busines..." refers background in this paper

  • ...Granovetter (1973) raises questions about variety in terms of the strength of weak ties....

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  • ...Granovetter (1973) raises questions about variety in terms of the strength of weak ties. His argument is that information regarding, for example, innovations is passed on from group to group through weak ties. Applied to business relationships it indicates that a structure of strong resource ties between some companies has to be complemented by a set of weak resource ties. This calls for a certain variety in number and types of counterparts for the individual resource provider or user. Nonaka (1991) has discussed the need for redundant information to increase creativity....

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  • ...Granovetter (1973) raises questions about variety in terms of the strength of weak ties. His argument is that information regarding, for example, innovations is passed on from group to group through weak ties. Applied to business relationships it indicates that a structure of strong resource ties between some companies has to be complemented by a set of weak resource ties. This calls for a certain variety in number and types of counterparts for the individual resource provider or user. Nonaka (1991) has discussed the need for redundant information to increase creativity. Variety in counterparts can be one way to increase this redundancy. A similar argument is developed by Lundvall (1990) who concludes that the learning interface in vertically integrated systems often tends to become too narrow....

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Posted Content
TL;DR: In this paper, the authors developed an evolutionary theory of the capabilities and behavior of business firms operating in a market environment, including both general discussion and the manipulation of specific simulation models consistent with that theory.
Abstract: This study develops an evolutionary theory of the capabilities and behavior of business firms operating in a market environment. It includes both general discussion and the manipulation of specific simulation models consistent with that theory. The analysis outlines the differences between an evolutionary theory of organizational and industrial change and a neoclassical microeconomic theory. The antecedents to the former are studies by economists like Schumpeter (1934) and Alchian (1950). It is contrasted with the orthodox theory in the following aspects: while the evolutionary theory views firms as motivated by profit, their actions are not assumed to be profit maximizing, as in orthodox theory; the evolutionary theory stresses the tendency of most profitable firms to drive other firms out of business, but, in contrast to orthodox theory, does not concentrate on the state of industry equilibrium; and evolutionary theory is related to behavioral theory: it views firms, at any given time, as having certain capabilities and decision rules, as well as engaging in various ‘search' operations, which determines their behavior; while orthodox theory views firm behavior as relying on the use of the usual calculus maximization techniques. The theory is then made operational by the use of simulation methods. These models use Markov processes and analyze selection equilibrium, responses to changing factor prices, economic growth with endogenous technical change, Schumpeterian competition, and Schumpeterian tradeoff between static Pareto-efficiency and innovation. The study's discussion of search behavior complicates the evolutionary theory. With search, the decision making process in a firm relies as much on past experience as on innovative alternatives to past behavior. This view combines Darwinian and Lamarkian views on evolution; firms are seen as both passive with regard to their environment, and actively seeking alternatives that affect their environment. The simulation techniques used to model Schumpeterian competition reveal that there are usually winners and losers in industries, and that the high productivity and profitability of winners confer advantages that make further success more likely, while decline breeds further decline. This process creates a tendency for concentration to develop even in an industry initially composed of many equal-sized firms. However, the experiments conducted reveal that the growth of concentration is not inevitable; for example, it tends to be smaller when firms focus their searches on imitating rather than innovating. At the same time, industries with rapid technological change tend to grow more concentrated than those with slower progress. The abstract model of Schumpeterian competition presented in the study also allows to see more clearly the public policy issues concerning the relationship between technical progress and market structure. The analysis addresses the pervasive question of whether industry concentration, with its associated monopoly profits and reduced social welfare, is a necessary cost if societies are to obtain the benefits of technological innovation. (AT)

22,566 citations

Journal ArticleDOI
TL;DR: In this paper, it is shown that a definition of a firm may be obtained which is not only realistic in that it corresponds to what is meant by a firm in the real world, but is tractable by two of the most powerful instruments of economic analysis developed by Marshall, the idea of the margin and that of substitution.
Abstract: Economic theory has suffered in the past from a failure to state clearly its assumptions. Economists in building up a theory have often omitted to examine the foundations on which it was erected. This examination is, however, essential not only to prevent the misunderstanding and needless controversy which arise from a lack of knowledge of the assumptions on which a theory is based, but also because of the extreme importance for economics of good judgement in choosing between rival sets of assumptions. For instance, it is suggested that the use of the word “firm” in economics may be different from the use of the term by the “plain man.”1 Since there is apparently a trend in economic theory towards starting analysis with the individual firm and not with the industry,2 it is all the more necessary not only that a clear definition of the word “firm” should be given but that its difference from a firm in the “real world,” if it exists, should be made clear. Mrs. Robinson has said that “the two questions to be asked of a set of assumptions in economics are: Are they tractable? and: Do they correspond with the real world?”3 Though, as Mrs. Robinson points out, “more often one set will be manageable and the other realistic,” yet there may well be branches of theory where assumptions may be both manageable and realistic. It is hoped to show in the following paper that a definition of a firm may be obtained which is not only realistic in that it corresponds to what is meant by a firm in the real world, but is tractable by two of the most powerful instruments of economic analysis developed by Marshall, the idea of the margin and that of substitution, together giving the idea of substitution at the margin.

21,195 citations

Book
01 Jan 2008
TL;DR: The Japanese companies, masters of manufacturing, have also been leaders in the creation, management, and use of knowledge-especially the tacit and often subjective insights, intuitions, and ideas of employees as discussed by the authors.
Abstract: Japanese companies, masters of manufacturing, have also been leaders in the creation, management, and use of knowledge-especially the tacit and often subjective insights, intuitions, and ideas of employees.

16,886 citations