Week
04 Assignment 01-Application Assignment-Academic Article Review
A review of: Managing in complex business networks
Ritter, Wilkinson and Johnston
Throughout the class reading for this week, we have
been introduced to the concepts and theories of creating and managing various
levels of collaborations through networks and alliances. These networks and
alliances are based on several facets of the organizations that participate in
them. This review will focus on the some
of the social factors that are involved in networks and alliances.
Gulati (1998) introduces “the notion that a firm’s
social connections is one of the primary drivers in providing interest and
opportunity in joining in an alliance.”
Organizations are given “many new opportunities for alliances through
their existing alliance partners” (Gulati, 1998). We could use the very simple and basic example
of meeting a new friend or partner through our own group, or network, of current friends. That relationship is initiated by someone we
already know, introducing us to someone
they know, who may share very similar
interests and goals. The similarity of
those interests and goals forms the basis for a new and rewarding friendship. If we accept Gulati’s proposal that this type
of interaction and partnership occurs between, and through organizations in a
similar fashion, the social aspects of those relationships must be addressed in
the overall analysis of networks and alliances.
Ritter, Wilkinson & Johnston propose that “a firm
is embedded in a network of ongoing business and non-business relationships”
(2004). A part of their overall analysis
of networks and firms takes place from the relationship level. In an organization there is the need to “manage
both relationship and network situations” (Ritter, et al., 2004). Networks and alliances can be based on both
inter-organizational and intra-organizational relationships. Ritter, et al., also point out that these
relationships paths are driven by “actors” or individuals, within each part of
the relationships (2004). These actors can be viewed from both “isolated” and “the
individual dyad”, or relationships between individuals (Ritter et al., 2004).
While Ritter et al., look at many angles of managing
the relationships between networks, the salient point for this review is that a
person, or individual is the basic foundation for any alliance to exist and/or
succeed. Individuals bring with them
existing relationships to an organization, and use those relationships to develop
their own personal networks over time.
These personal networks of “actors” can then be connected to the
organizational networks, both internally and externally. (2004). An
individual’s knowledge and experience can be shared with the organization to
which they belong. The organization can use
that person’s resources to connect with other “actors” in other organizations
as the basis for new networking and alliance opportunities (Ritter et al.,
2004). This interaction between individuals, organizations and networks that
are naturally formed or negotiated is much like that of a “living organism,
working in harmony with other members of the ecosystem to maintain productive
and effective relationships” (Ritter et al., 2004). If a relationship reaches the desired state
of effectiveness and productivity for “all organisms within the ecosystem
(network or alliance)” (Ritter et al., 2004), then it would follow that the
entire ecosystem would reap positive and rewarding benefits of that successful
interaction.
References
Gulati, R. (1998). Alliances and networks. Strategic Management Journal, Vol. 19, 293-317.
Ritter, T., Wilkinson, I.F., & Johnston, W. J. (2004). Managing in complex business networks. Industrial Marketing Management, 33(3), 175-183. Retrieved from http://www.impgroup.org
David, how would Gulati (1998) feel about your statement that the "individual is the basic foundation for any alliance to exist and/or succeed"? Thinking about our readings this week, are there factors external to the individual that would affect the success of an alliance?
ReplyDeleteGulati states that the social structure of an organization has influence on choosing alliances, and the success of those alliances (1998). Within the social structure, there are two areas of embeddedness, structural and relational (Gulati, 1998). Both of these areas purposes include "the quest for information to reduce uncertainty"(Gulati, 1998).
ReplyDeleteStructural embeddedness "focuses on the informational role of the position in an organization in the overall network" (Gulati, 1998). As far as the relational embeddedness is concerned, it's focus is on "actors who are strongly tied to each other and the likelihood of those ties supporting shared understanding"(Gulati, 1998). It is the "strong, socializing relations which influence the actions of the actors" (Gulati, 1998). Gulati says that the actors in social structures would be expected to adopt "behavioral conformity" with the social and structural components of the networks internally (Gulati, 1998).
Gulati makes a point to note that research in the study of relational embeddedness is not as deep as the study of structural embeddedness (Gulati, 1998). Looking at my statement from Gulati's perspective, I believe he would tell me to provide more solid proof of an assumption. Unless it empirically proven, it would remain an assumption.
It would be very safe to assume that there would be many external individual influences that could make or break a network or alliance. In the Gulati article, he makes reference to an idea presented by Zukin and DiMaggio. That idea is that "embeddedness includes structural, cognitive, institutional and cultural elements" (1990). The cognitive and cultural background and experience from a personal perspective could highly influence the role of an individual within an alliance. Those areas could be considered unique to the individual, their learning and life experience. Cognitive and cultural influences that are not congruent with the organization or alliance might have to be re-shaped for one to reach full potential. Or, those uniquely personal experiences could actually help the organization to move into alliances and networks that had not been considered before. The external influences could therefore be considered a "double-edged sword."
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ReplyDeleteDavid,
ReplyDeleteI was intrigued by your statements about both intra and inter-organizational relationship, as well as your claim that individuals are the building blocks of partnerships/alliances/networks.
I think you would agree with Kanter (2010) when he claims that chemistry and compatibility between companies is vital to a successful partnership.
Coming from a true Political Science major: I believe that individuals are often only as important as the group, business unit, and/or colleagues they work with. This is because an individual's nature often changes whenever he is working together with others. For this reason, an effective mission statement and stategic direction, as well as the job-fit of those employees in key positions, are also critical when examining a company's eligibility to seek valuable partnerships.
I got a little bit off topic there but I really enjoyed your post.
Hi Casey,
ReplyDeleteIntrigued? Hmmmm. That is intriguing. :) I hope we are given some "wiggle room" to express our views on the theories and concepts we are learning. I know our views are not highly-researched concepts. But our personal perceptions do shape the way we interpret, and even implement, a certain management theory or concept. The foundations and frameworks of what we are learning are absolutely vital. But further thinking on our part might help to make an improvement on a process or structure.
I totally agree with Kanter. But where does that chemistry originate from in its most basic form? It comes from the individual. It is an organization's leaders' responsibility to build their management teams in a way that meets the firm's basic strategic goals and purpose. And based on our even casual knowledge of psychology, it would follow that those individuals, using their personal experiences and networks along with the learned expectations of their workgroups or companies, can potentially have significant effect on the process of developing partnerships or alliances.
As you state, individuals' importance is highly influenced by the groups and other individuals they work with. But going back to your point about chemistry and compatibility, would it not be just as important for those elements to flow both ways, between the individual members and the corporations themselves, in the analysis of alliance/partnership formation?
I may be missing the boat here with my thoughts. The point I am trying to make is that individuals can have influence on the concepts we are discussing.
Thanks again for reading the review and for your comments. You have been very helpful in pushing me to do some further analysis of what I presented.