L11, The interaction and network approach

Question 1

Describe the interaction approach by Håkansson (1982)

Answer 1

The interaction approach describes the interaction process between the seller and the buyer

It could be a short-term interaction including:
— product/service
— information
— financial
— social
which would be exchanged in episodes.

The interaction could also be long term including
— institutionalizations
— adaption
and would be exchanged through relationships

In the ATHMOSPHERE The interaction will be affected by
— Power/dependence
— cooperation
— closeness
— expectations

In the ENVIRONMENT the interaction is affected by:
— market structure
— dynamism
— internationalization
— position in the manufacturing channel 
— social systems

(Described according to the figure)

Question 2

Describe the network model

Answer 2

The network consists of three key dimensions networks (ARA) activities, resources and Actors.

ACTORS
— Actors could be at different levels, from individuals to groups of companies
— actors aim to increase their control of the network

RESOURCES
— Resources are heterogenous, human and physical and mutual dependent

ACTIVITIES
— activities includes the transformation act, the transaction act, activity cycles and transaction chains

ACTOR-RESOURCE relation
— Actors control resources; some alone and other jointly. — Actors have a certain knowledge of resources

ACTOR- ACTIVITY relation
— actors perform activities
— actors have certain knowledge of activities

ACTIVITIES- RESOURCE relation
— activities link resources to each other
— activities change or exchange resources through use of other resources

Question 3

What does a relationship consist of?

Answer 3

A relationship consists of varying parts of:
1. Actor bonds
—> individuals learn to know each other and create trust
2. Activity links
—> JIT solutions
3. Resource ties
—> physical ties - pipelines
—> heavy resources - process industry
—> system suppliers who adapt production equipment to certain customers

And the concentration of each of these varies within different relations

Question 4

what different types of business relations are there?

Answer 4

Different business relationship fulfill different purposes

— activity link
— resource ties
— actor bonds

Question 5

How does relationship develop?

Answer 5

1. the character of a relationship changes over time

2. The different phases of relationships
—> pre-relationship
—> exploratory
—> developing
—> stable

Each phase has a certain character with regards to example, learning, investments, adoptions, trust and distance

Question 6

What are the different phases of relationship development?

Answer 6

1. pre-relationship stage
— high inertia 
—> what will we both get?
—> how much investment?
—> what adoptions?
—> what learning?
—> trust?

2. Explanatory stage
   —> investment of time for learning and distance reduction
   —> no routines or commitment
3. Developing stage
   —> intensive mutual learning
   —> building trust through investment and informal adoption
4. Stable stage
   —> routine and interstutionalisation

Question 7

what is the average duration od supplier relationships according to Dubois and Gadde (2003)?

Answer 7

11.4 years

Question 8

name some facts about relationships and networks!

Answer 8

1. networks consist of connected relationships
2. variety among relationships
3. indirect relationships
4. coordination between relationships

Question 9

Describe supply networks

Answer 9

The company has different first tier suppliers, which in turn has some different suppliers, second ties suppliers, which in turn has suppliers and so on

Question 10

Describe distribution networks (use IBM:s network)

Answer 10

1. component suppliers distributes component to different suppliers

2. The suppliers then distributes:
— direct to customer
— to independent distributor
— to software house
— to joint venture partners
—to value added distributors (VAD)
— to dedicated partners

3. which in turn sends to:
—> full-service retailers
—> value-added reseller (VAR)
—> main-order companies
—> installer

4. End user get the product

Question 11

what is a network layer?

Answer 11

1. activity pattern
   —> the pattern of activities in the network, related to for example production, logistics, administration, design, product development
2. resource constellation
   —> how resources are distributed in the network and how these are tied to each other

—> resources ties are established through adaptations of production equipment I different firms or by historical resource combinations

3. web of actors
   —> what firms, organizations and individuals are part of the network and how do they relate

Question 12

What are the different characters of networks?

Answer 12

1. activity centered networks
   —> automotive industry
   —> coordination of activities are crucial
2. resource centered networks
   —> paper industry
   —> large fixed resources
3. actor centered networks
   —> dominated by large and powerful companies
   —> fashion industry (nike, Benetton, marks and spencers)

Question 13

What is network position?

Answer 13

1. firms have network positions
   —> defined by the characteristics of the relationships and the benefits and obligations relating
2. the analysis of a network needs to start somewhere
   —> e.g. a comany or relationship
3. by changing focal point new possibilities can be identified
4. changing network position as strategizing

Question 14

Name three network concepts

Answer 14

1. network horizon
   —> how extended a company’s view in the network is
2. Network context
   —> the part within the network horizon
3. Network identity
   —> how firms see themselves in network and how they are seen by others