Markets-as-networks theory: a review

This paper exposes the development of markets-as-networks theory from formal inception in the mid-1970s until 2010 state-of-the-art, en route presenting its historical roots. This largely European-based theory challenges the conventional, dichotomous view of the business world as including firms and markets, arguing for the existence of relational governance structures (the so-called ‘‘interfirm cooperation’’) in addition to hierarchical and transactional ones.

Multidimensionality of Actors in Business Networks: The Influence of Social Action in Pharmacy Networks in Finland

In the markets-as-networks approach business networks are conceived as dynamic actor structures, giving focus to exchange relationships and actors’ capabilities to control and co-ordinate activities and resources. Researchers have shared an understanding that actors’ actions are crucial for the development of business networks and for network dynamics. However, researchers have mainly studied firms as business actors and excluded individuals, although both firms and individuals can be seen as business actors. This focus on firms as business actors has resulted in a paucity of research on human action and the exchange of intangible resources in business networks, e.g. social exchange between individuals in social networks. Consequently, the current conception of business networks fails to appreciate the richness of business actors, the human character of business action and the import of social action in business networks. The central assumption in this study is that business actors are multidimensional and that their specific constitution in any given situation is determined by human interaction in social networks. Multidimensionality is presented as a concept for exploring how business actors act in different situations and how actors simultaneously manage multiple identities: individual, organisational, professional, business and network identities. The study presents a model that describes the multidimensionality of actors in business networks and conceptualises the connection between social exchange and human action in business networks. Empirically the study explores the change that has taken place in pharmaceutical retailing in Finland during recent years. The phenomenon of emerging pharmacy networks is highly contemporary in the Nordic countries, where the traditional license-based pharmacy business is changing. The study analyses the development of two Finnish pharmacy chains, one integrated and one voluntary chain, and the network structures and dynamics in them. Social Network Analysis is applied to explore the social structures within the pharmacy networks. The study shows that emerging pharmacy networks are multifaceted phenomena where political, economic, social, cultural, and historical elements together contribute to the observed changes. Individuals have always been strongly present in the pharmacy business and the development of pharmacy networks provides an interesting example of human actors’ influence in the development of business networks. The dynamics or forces driving the network development can be linked to actors’ own economic and social motives for developing the business. The study highlights the central role of individuals and social networks in the development of the two studied pharmacy networks. The relation between individuals and social networks is reciprocal. The social context of every individual enables multidimensional business actors. The mix of various identities, both individual and collective identities, is an important part of network dynamics. Social networks in pharmacy networks create a platform for exchange and social action, and social networks enable and support business network development.

Negotiating the Business Environment: Theory, Practice for all Governance Styles

The business environment across the globe is today characterised by three primary governance arrangements - bureaucracies, markets and networks. For organisations operating within each of these business contexts the terms of engagement in regard to negotiation are different. Rather than starting from a broad ‘how to’ approach or a specific cultural interface, Negotiating the Business Environment looks at governance arrangements within the business environment and at how such governance arrangements impact on how negotiation occurs. This text provides an Australian—not an overseas—perspective on negotiations that will be a welcome change for Australian students. Uniquely, it takes into account the context in which negotiations take place. Negotiating the Business Environment demonstrates how responding to business style in negotiations can effect successful outcomes. It include strong pedagogy including: key terms, key points, further reading lists, case studies, and end of chapter questions

Learning Challenges in Biogas Production for Sustainability : An activity theoretical study of a network from a swine industry chain

This study is about the challenges of learning in the creation and implementation of new sustainable technologies. The system of biogas production in the Programme of Sustainable Swine Production (3S Programme) conducted by the Sadia food processing company in Santa Catarina State, Brazil, is used as a case example for exploring the challenges, possibilities and obstacles of learning in the use of biogas production as a way to increase the environmental sustainability of swine production. The aim is to contribute to the discussion about the possibilities of developing systems of biogas production for sustainability (BPfS). In the study I develop hypotheses concerning the central challenges and possibilities for developing systems of BPfS in three phases. First, I construct a model of the network of activities involved in the BP for sustainability in the case study. Next, I construct a) an idealised model of the historically evolved concepts of BPfS through an analysis of the development of forms of BP and b) a hypothesis of the current central contradictions within and between the activity systems involved in BP for sustainability in the case study. This hypothesis is further developed through two actual empirical analyses: an analysis of the actors senses in taking part in the system, and an analysis of the disturbance processes in the implementation and operation of the BP system in the 3S Programme. The historical analysis shows that BP for sustainability in the 3S Programme emerged as a feasible solution for the contradiction between environmental protection and concentration, intensification and specialisation in swine production. This contradiction created a threat to the supply of swine to the food processing company. In the food production activity, the contradiction was expressed as a contradiction between the desire of the company to become a sustainable company and the situation in the outsourced farms. For the swine producers the contradiction was expressed between the contradictory rules in which the market exerted pressure which pushed for continual increases in scale, specialisation and concentration to keep the production economically viable, while the environmental rules imposed a limit to this expansion. Although the observed disturbances in the biogas system seemed to be merely technical and localised within the farms, the analysis proposed that these disturbances were formed in and between the activity systems involved in the network of BPfS during the implementation. The disturbances observed could be explained by four contradictions: a) contradictions between the new, more expanded activity of sustainable swine production and the old activity, b) a contradiction between the concept of BP for carbon credits and BP for local use in the BPfS that was implemented, c) contradictions between the new UNFCCC1 methodology for applying for carbon credits and the small size of the farms, and d) between the technologies of biogas use and burning available in the market and the small size of the farms. The main finding of this study relates to the zone of proximal development (ZPD) of the BPfS in Sadia food production chain. The model is first developed as a general model of concepts of BPfS and further developed here to the specific case of the BPfS in the 3S Programme. The model is composed of two developmental dimensions: societal and functional integration. The dimension of societal integration refers to the level of integration with other activities outside the farm. At one extreme, biogas production is self-sufficient and highly independent and the products of BP are consumed within the farm, while at the other extreme BP is highly integrated in markets and networks of collaboration, and BP products are exchanged within the markets. The dimension of functional integration refers to the level of integration between products and production processes so that economies of scope can be achieved by combining several functions using the same utility. At one extreme, BP is specialised in only one product, which allows achieving economies of scale, while at the other extreme there is an integrated production in which several biogas products are produced in order to maximise the outcomes from the BP system. The analysis suggests that BP is moving towards a societal integration, towards the market and towards a functional integration in which several biogas products are combined. The model is a hypothesis to be further tested through interventions by collectively constructing the new proposed concept of BPfS. Another important contribution of this study refers to the concept of the learning challenge. Three central learning challenges for developing a sustainable system of BP in the 3S Programme were identified: 1) the development of cheaper and more practical technologies of burning and measuring the gas, as well as the reduction of costs of the process of certification, 2) the development of new ways of using biogas within farms, and 3) the creation of new local markets and networks for selling BP products. One general learning challenge is to find more varied and synergic ways of using BP products than solely for the production of carbon credits. Both the model of the ZPD of BPfS and the identified learning challenges could be used as learning tools to facilitate the development of biogas production systems. The proposed model of the ZPD could be used to analyse different types of agricultural activities that face a similar contradiction. The findings could be used in interventions to help actors to find their own expansive actions and developmental projects for change. Rather than proposing a standardised best concept of BPfS, the idea of these learning tools is to facilitate the analysis of local situations and to help actors to make their activities more sustainable.

Thanatos Empresarial : evolución del Sector de la construcción en Colombia.

Esta investigación está orientada hacia la identificación de características de la internacionalización de la economía colombiana, específicamente en el sector de la construcción, los cuales han logrado otorgarle un especial dinamismo durante esta última década. En el desarrollo del documento se evalúan los modelos de internacionalización basados principalmente en tres temas fundamentales; el primero es la teoría económica, el segundo es la teoría como proceso, y por último la teoría de redes. Cada uno de estos modelos basados en su respectiva teoría, enseñan conceptos de cómo podrían las empresas implementar planes para entrar a otros mercados, empezando por países similares tanto en aspectos sociales, económicos, culturales, y políticos, logrando así de esta manera una posición aventajada frente a sus competidores. Al lograr este posicionamiento pueden empezar su expansión a países más lejanos puesto que ya han conocido y fortalecido sus ventajas competitivas, obteniendo una mayor experiencia de adaptación a nuevos mercados, con esto alcanzando captar mayores recursos económicos, de conocimiento y de otras índoles que ayudan a disminuir el riesgo de inversión que realizan las organizaciones en diferentes naciones.

Profundización, apertura y cierre de mercados de exportación a nivel sectorial en Colombia : una estimación de los márgenes del comercio y su relación con el ciclo económico

En este trabajo se explora, desde el punto de vista empírico, el comportamiento de la profundización, apertura y cierre de mercados de exportación a nivel sectorial para Colombia durante el periodo 1997- 2010, con énfasis en los dos periodos de recesión que presenta la economía durante el mismo. Para ello se emplea una metodología de descomposición de los cambios registrados por el comercio, en sus márgenes intensivo y extensivo, que permite la identificación de estos fenómenos y su observación tanto a lo largo del tiempo como a nivel transversal. Los resultados indican que, en el corto plazo, el margen intensivo del comercio explica la mayor parte de las variaciones en las exportaciones, en tanto que en el mediano plazo se encuentra una importante contribución del margen extensivo a éstas. Adicionalmente, desde el punto de vista sectorial, la crisis de 1997-1999 no presenta un patrón homogéneo en términos del comportamiento de los márgenes del comercio, en tanto que la de 2008- 2009 se caracteriza por presentar un patrón más homogéneo a través de los distintos sectores de la actividad económica.

On the fringe: barriers to participation in the new economy in regional areas

Electronic commerce offers tools which potentially support the development and re·invigoration of regional economies because of their ability to /ink enterprises and labour markets in networks across dispersed geographical areas. However. the evidence that regional areas of Australia benefit from this development in accordance with optimistic forecasts of the potential is, at best, mixed. This paper examines the constraints on the development of IT-based activity in regional areas and identifies barriers to full participation of those areas in Australia. It argues that regional areas are unlikely to benefit from the 'new economy' without a major changes in government thinking about regional development.

Anatomy of relationship significance: a critical realist exploration

Markets-as-networks (MAN) theorists contend, at least tacitly, the significance of business relationships to the firm – that is, business relationships contribute somewhat to corporate survival or growth. One does not deny the existence of significant business relationships but sustain, in contrast to the consensus within the MAN theory, that relationship significance should not be a self-evident assumption. For significance cannot be a taken-for-granted property of each and every one of the firm’s business relationships. The authors adopt explicitly a critical realist metatheoretical position in this conceptual paper and claim that relationship significance is an event of the business world, whose causes remain yet largely unidentified. Where the powers and liabilities of business relationships (i.e., relationship functions and dysfunctions) are put to work, inevitably under certain contingencies (namely the surrounding networks and markets), relationship effects ensue for the firm (often benefits in excess of sacrifices, i.e., relationship value) and as a consequence relationship significance is likely to be brought about. In addition, relationship significance can result from the dual impact that business relationships may have on the structure and powers and liabilities of the firm, that is, on corporate nature and scope, respectively.

Networks in the shadow of markets and hierarchies : calling the shots in the visual effects industry

The nature and organisation of creative industries and the creative economy has received increased attention in recent academic and policy literatures (Florida 2002; Grabher 2002; Scott 2006a). Constituted as one variant on new economy narratives, creativity, alongside knowledge, has been presented as a key competitive asset, Such industries – ranging from advertising, to film and new media – are seen as not merely expanding their scale and scope, but as leading edge proponents of a more general trend towards new forms of organization and economic coordination (Davis and Scase 2000). The idea of network forms (and the consequent displacement of markets and hierarchies) has been at the heart of attempts to differentiate the field economically and spatially. Across both the discussion of production models and work/employment relations is the assertion of the enhanced importance of trust and non-market relations in coordinating structures and practices. This reflects an influential view in sociological, management, geography and other literatures that social life is ‘intrinsically networked’ (Sunley 2008: 12) and that we can confidently use the term ‘network society’ to describe contemporary structures and practices (Castells 1996). Our paper is sceptical of the conceptual and empirical foundations of such arguments. We draw on a number of theoretical resources, including institutional theory, global value chain analysis and labour process theory (see Smith and McKinlay 2009) to explore how a more realistic and grounded analysis of the nature of and limits to networks can be articulated. Given space constraints, we cannot address all the dimensions of network arguments or evidence. Our focus is on inter and intra-firm relations and draws on research into a particular creative industry – visual effects – that is a relatively new though increasingly important global production network. Through this examination a different model of the creative industries and creative work emerges – one in which market rules and patterns of hierarchical interaction structure the behaviour of economic actors and remain a central focus of analysis. The next section outlines and unpacks in more detail arguments concerning the role and significance of networks, markets and hierarchies in production models and work organisation in creative industries and the ‘creative economy’.

Agency services for the management of distributed energy networks using parallel auction markets

[ES]En las próximas décadas, el sistema de generación, transmisión y distribución de energía eléctrica afrontará los retos más importantes de su historia. La escasez de los recursos energéticos tradicionales, los efectos de los gases invernadero y el aumento imparable ,de la demanda llaman a transitar hacia un nuevo tipo de infraestructura capaz de explotar el potencial que ofrecen las nuevas fuentes de energía renovable, y de conceder autonomía y capacidad de decisión a los usuarios. Este nuevo modelo de red eléctrica es conocido como Smart Grid, y es habitualmente propuesto como una red distribuida, reactiva e inteligente.

Turbocharging Networks in the Public Sector

Networks have come to occupy a key position in the strategic armoury of the government, business and community sectors and now have impact on a broad array of policy and management arenas. An emphasis on relationships, trust and mutuality mean that networks function on a different operating logic to the conventional processes of government and business. It is therefore important that organizational members of networks are able to adopt the skills and culture necessary to operate successfully under these distinctive kinds of arrangements. Because networks function from a different operational logic to traditional bureaucracies, public sector organizations may experience difficulties in adapting to networked arrangements. Networks are formed to address a variety of social problems or meet capability gaps within organizations. As such they are often under pressure to quickly produce measurable outcomes and need to form rapidly and come to full operation quickly. This paper presents a theoretical exploration of how diverse types of networks are required for different management and policy situations and draws on a set of public sector case studies to understand/demonstrate how these various types of networked arrangements may be ‘turbo-charged’ so that they more quickly adopt the characteristics necessary to deliver required outcomes.

From the consciousness industry to the creative industries : consumer-created content, social network markets, & the growth of knowledge

In studies of media industries, too much attention has been paid to providers and firms, too little to consumers and markets. But with user-created content, the question first posed more than a generation ago by the uses & gratifications method and taken up by semiotics and the active audience tradition (‘what do audiences do with media?’), has resurfaced with renewed force. What’s new is that where this question (of what the media industries and audiences did with each other) used to be individualist and functionalist, now, with the advent of social networks using Web 2.0 affordances, it can be re-posed at the level of systems and populations as well.