Lecture 3a - Analyzing Business Networks (structure, strategy & performance) Flashcards
Network
Group of 3+ organizations connected in ways that facilitate achievement of a common goal.
Four types of network research
- Researchers may, and often, have utilized characteristics and attributes of organizations to explain their relationships with other organizations, focussing on such issues as organizational trust to explain the nature and extent of an organizations involvement with others.
- Researchers may utilize organization-level phenomena to try to explain how individual organizations and their actions might affect outcomes at the network level, such as network structures, stability and effectiveness.
- Researchers focusing at the level of the network have tried to understand the impact of network-level structures and behaviours on individual organizations.
- Researchers at the network level may choose to study the impact on multilevel actions and structures on network level outcomes.
Organizational variables / Individual Organizations
Impact of organizations on other organizations through dyadic interactions.
Relational or network variables / Individual Organizations
Impact of a network on individual organizations.
Organizational variables / Collectivities of Organizations
Impact of individual organizations on a network.
Relational or network variables / Collectivities of Organizations
Whole networks or network-level interactions.
Two levels of analysis
Firm level: which relations should my firm develop to be succesful?
- In what IT should we invest?
- What is our application portfolio?
- What is the networkability of the firm?
- How can we increase the firm’s performance?
Network level: how can my network win?
- In what IT should we invest?
- What is the Business Bus?
- What is the networkability of the network?
- How can we increase network performance?
Organizational indicatures, 6 structural issues
- In-degree and out-degree centrality: does an organization occupy a central or a more peripheral position.
- Closeness centrality: central organizations have short paths.
- Betweenness centrality: the extent to which an individual’s position in the network lies between the positions of other individuals.
- Multiplexity: number of types of links.
- Broker relationships: to what extent does an organization span gaps, or structural goal.
- Cliques: clusters of three or more organizations connected to one another.
Properties of the network as a whole, 5 structural issues.
- Density: overall level of connectedness.
- Fragmentation and structural holes: are all or most networks members connected.
- Governance: what mechanism is used to govern and/or manage the overall network.
- Centralization: to what extent are one or a few organizations in the network considerably more centrally connected than others.
- Cliques: what is the clique structure.
Network horizon
Number of nodes that an actor can see from a specific position in the network.
What are the Network properties?
a. Network structure: what does the network looks like?
- Dense ties improve performance; density and centralization cannot simultaneously be maximized.
- High differentation between nodes occurs with low centralization (of the network).
b. Network development: how does the network change over time.
- Development is influenced by use of resources; rules and norms: preoccupation on past partners.
c. Network governance: who controls the network?
- Shared governance: collectively work on strategy & operations.
- Lead-organization (local firm): one powerful organization & all firms share strategy.
- Network Administrative Organization: similar to lead network, but the core firm is specifically created to oversee the network.
What are the Network performance outcomes?
A. Effectiveness
B. Learning: firms/nodes learn from nearby firms on how to operate and adapt their (internal) processes and (inter-organizational) relations.
C. Societal effects of the network.
D. Sustainability: networks that are formally constructed, not based on existing relationships, have higher risk of instability (structure/processes) & failing (performance).
Balanced Scorecard
- Financial: how do we appear to shareholders?
- Internal: at what processes should we excel?
- Innovation: what should we learn to grow and prosper?
- Customer: how do our customers perceive us?
NEFETI Network
- Strategic drivers for the network
- Which are the key firms of the network?
- Can you identify shared network strategy?
- Do the key firms share customers? - Enabling conditions for the network
- What are the critical enabling conditions and capabilities for the network?
- Do certain enabling conditions for the networking exist?
+ IT drivers
+ Business drivers
+ Information intensity of the network
+ Barriers for entry/exit the network - Structure for the business network.
- Which organizations are involved in the business network?
- What is the overall network structure?
- What are the business relations and linkages in the network?
- How is connect and disconnect implemented in the network? - IT in the business network
- What are the key technologies in the network?
- What are the key applications in the network? - Functioning of the business network
- What are the key business processes in the network?
- What mechanisms are used to coordinate business processes?
- How is the supply and demand of IT planned and controlled in the network? - Performance of the network
- How is the success measured at the organizational level?
- How is succes measured at the network level?
How to assess the structure of a network?
- Simple indicators for structure
- Structure: which nodes do which tasks
+ structure = distribution of tasks across nodes + dependencies between nodes.
+ note that process = how these tasks are done. - Complex indicators for structure
+ Are there structural holes in the network?
+ Network centrality indicator per node/for the total network?
