Theoretical Concepts

This research was viewed from the individual firm’s perspective, as described by individual actors as employees of the firm operating within the network. The focus of the study is business to business (b2b) networking but as Granovetter (1985) argues, network analysis begins with the assumption that actors within a network, whether they are acting as individuals or as part of a group, are embedded as part of a myriad of social relationships. As such, it is impossible to understand actor behaviour within a network without understanding the relationship context in which it functions (Galaskiewicz 1996).

We also know from earlier network analysis conducted by the social and behavioural science literature, exemplified by the ‘Hawthorn Studies’ conducted by Roethliberger and Dickson (1939), that actors are interdependent rather than independent and that the relationships that actors have with each other are channels or conduits through which ideas and resources flow. It is also stated that network analysis should be concerned with relationships as well as behaviour, leading to what was subsequently described as the network approach to understanding relationships in networks (Galaskiewicz 1985;

Wasserman and Galaskiewicz 1994).

The markets as networks approach to researching business networks shares some of the antecedents and concerns of other network approaches reviewed in the previous chapter but presents some unique features too. The relationship and interaction approach associated with markets in networks has extended dyadic studies to become an established systematic level of analysis through the concept of connectedness in network relationship studies, as acknowledged by Iacabucci (1996). This approach is exemplified by the innovative studies conducted by Håkansson and Snehota (1989), in collaboration with with other leading adacemics within the IMP Group research community.

As part of the process to review the literature domain associated with understanding the research into markets as networks, a table was developed to summarise the concepts and connections of the network terms found in the literature. The networking terms listed in the Table 3.1 in alphabetical order, are considered to be influentual in the development of the constructs used to describe the variables in the emerging conceptual framework, to explain networking outcomes and the measurement of networking performance.

TABLE 3.1

Network concepts associated with networking performance

Network Terms Author(s) Theoretical description Link to conceptual

The frequency of activation of network ties is considered important in determining networking outcomes. The activation of network ties may be formal or informal, via digital

Network Environment

Network Terms Author(s) Theoretical description Link to conceptual model of face to face communications

in network meetings or on a one to one basis.

Allegiance exists where two or more potential exchange partners share the perception of goal compatibility, trust and

Networks described as having a discernable atmosphere, said to be a precursor to understanding the identity of the network.

Network profile is linked to the network atmosphere. The term atmosphere is also recognised as being problematic due the conflicting use of the terms environment and atmosphere. considered a prelude to social interaction and important in

process wherby actors seek to develop close relationships based on mutually beneficial acts. Network behaviour is seen to be a reliable indicator of networking performance. as a firm’s ability to develop and use inter-firm relationships measured by task execution and qualifications.It is also seen as the process of developing

Network Terms Author(s) Theoretical description Link to conceptual model Anand &

Khanna (2000) organisational relationships to access resources for networking. to the firm’s focal perspective.

Ritter found a strong correlation between positive network as the skills, knowledge and resources to perform network tasks. It is seen as a core competence of a firm using networking as a root to competitive advantage.

Network analysis was based on studying the dyadic connections between actor nodes and the subsequent ties in a network.

From this the study of the interconnections and relations in

Defined as the degree to which actors are embedded in a network and likely influence networking outcomes. The degree of embeddedness in a network is an established network concept and is likely to influence the action and described as enabler of network performance and the idea of the

Networking Performance Network

Network Terms Author(s) Theoretical description Link to conceptual model Thorelli (1986) equal power network, where

where members develop close relationships based on reciprocal and supportive actions based on their behaviour. Therefore networks are said to have a discerable environment.

Behaviour Network Intensity

Network Identity Achrol (1997) Achrol& Kotler firms see themselves in a network and how they are seen by others. Network identity is how the network is perceived from the viewpoint of the actors in a network and is seen as part of the atmosphere of a network.

Network identity is said to capture the attractiveness of a firm as an exchange partner in a network. as the extent to which actor resources are committed to the network relationship, measured by frequency of contact and the volume of resourses exchanged.

Network orientation allows a firm to identify and concentrate on those business activities to which it is best suited,

characterised by the of scale and resource exchange.

SME’s can access resources external to the firm, improving firm performance. developed from the notion of

Networking Outcomes

Network Terms Author(s) Theoretical description Link to

Defined as how the network is perceived from the viewpoint of the actors in the network.

Network relationships. It is said to

possess three dimensions:

A network requires a number of actors to be considered effective.

It is not sufficient to simply count the nodes or connections in a network , as netwoks

Organisation size is a dimension of network capability. As the size of an organisation increases, the probability of external defined as the ability of a firm to develop and manage

relationships with others in the network.

Network Characteristics Strong vs weak ties

Network Terms Author(s) Theoretical description Link to strengths supported by a range of strong and weak network ties.

The notion of strong versus weak ties in networks has featured frequently in the

Trust is an important dimension in relationships. It is defined as having a reliance and confidence in truth, of being reliable and being trustworthy. Network trust is dependent on and mediated by the network framework in which the relationship is embedded.

Networking Characteristics

In the process of developing the conceptual framework, the theoretical perspectives from the markets as networks approach to understanding the indicators of networking performance have been investigated based on the most cited concepts and terms summarised in Table 3.1.

The development of a conceptual framework to investigate the linkages between networking activity and networking performance (NP) is based partly on the study of relationships in networks (Håkansson and Snehota 1995). This is one of a number of early studies at the core of the markets as networks approach, conceptualised in the framework developed to provide a method for understanding networks within a marketing context The research undertaken within the markets as networks literature

recognises the interdependencies, interaction and relationships, as important generic aspects of firms’ behaviour and network orientation (Håkansson 1982). This is seen as the focal firm’s perspective within the dyadic network construct and was influential in this study and the development of a conceptual model explaining NP.

In summary, by understanding what has influenced networking outcomes from prior literature, Table 3.1 has highlighted the constructs and measures of networking activity considered most likely to influence networking outcomes in the future. It is evident that a four constructs have been cited more often than others in describing the outcomes from networking, identified as; 1) network atmosphere, 2) network environment, 3) network capability, 4) network characteristics. These network constructs are highlighted in the emerging conceptual framework described in the following section.