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The Role of Events in the Change of Business Networks: A Challenge for Strategy?
Jönköping University, Jönköping International Business School, JIBS, EMM (Entrepreneurship, Marketing, Management).
Turku School of Economics.
Uppsala universitet.
2008 (English)In: 5th Nordic Workshop on Relationship Dynamics, 2008Conference paper, Published paper (Refereed)
Abstract [en]

This paper takes its starting point in the so called business network approach, which is based on the notion that companies build exchange relationships with other companies; relationships that, in turn, are the building blocks of business networks. Through business relationships the companies become connected, both directly and indirectly, to other parts of the business network, for example, to customers’ customers and suppliers’ suppliers. The connectedness of relationships means that changes taking place in one part of the network may spread far into its other parts.

The change of business networks has generally been discussed from the perspective of a focal company or a focal business relationship and of relationships directly connected to it. Usually indirect business relationships (e.g. with customers’ customers) are ignored. Thus, we still know very little of how change spreads further in business networks. Business network change is, however, a strategic concern for companies, who compete in networked environments and are increasingly dependent on external linkages as a source of resources.

In this paper the purpose is to propose an event-based approach to the study of business network change. Events form the principal point of access to social action in time and can thus be used as windows for network dynamics. So far network change has been examined from the perspective of network structure, taking a defined network as a starting point, and studying the trajectory, change pattern or development process of the structure. We adopt an alternative approach here, taking the change itself as a starting point and selecting discernible change episodes, i.e. events, as the focus of our discussion. This offers a dynamic view on networks, and releases the investigator from strict ex ante limitation of the network in focus. Events are seen as manifestations of change forces causing various changes in business networks, ultimately leading to other important events.

Events such as mergers, acquisitions and bankruptcies are often connected to each other, creating event sequences that may restructure significantly the business network in which companies realize and enact their strategy. In the best case, events provide opportunities for firms to restructure the network and to improve their positions within it. However, our results pinpoint the complexity and dynamics of network environments and the challenge strategic management faces in such environments. In the context of merger and acquisition waves and various simultaneously occurring events, it may be extremely difficult to choose one’s own actions, and to see the long-term ramifications of one’s own and others’ actions.

 

Place, publisher, year, edition, pages
2008.
Keyword [en]
events, business network dynamics, mergers, acquisitions, bankruptcies
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-7523OAI: oai:DiVA.org:hj-7523DiVA: diva2:134282
Available from: 2009-01-19 Created: 2009-01-19 Last updated: 2009-11-16Bibliographically approved

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