Challenges of Managing a Network Business

Industrial Marketing Management

This study addresses tension and its consequent hurdles to the collaborative nature of value co-creation. Substantial research has focused on the benefits of value co-creation but much less so on its dark side. While some tension is inevitable, escalated tension can harm anticipated value and business relationships. The overlaps and disparities of formal and informal communication networks of two large construction projects are examined along with the tensions arising. To increase the breadth and depth of the empirical investigation, the presented network case study draws on survey data analyzed with Social Network Analysis as well as 45 in-depth managerial interviews. Structural, emotional and behavioural tensions are identified. The study suggests that tension triggered by one or a few actors can destabilize the network by creating unsustainable communication structures. Social Balance Theory is applied to study how unsustainable communication structures seek balance at a network level. We identify network patterns that can signal the presence of tension and structural imbalance in value co-creation, categorize several types of tension, and provide managerial implications.

International Journal of Physical Distribution & Logistics Management, 2004

This is a theoretical paper that examines the interplay between individual and collective capabilities and competencies and value transactions in collaborative environments. The theory behind value creation is examined and two types of value are identified, internal value (Shareholder value) and external value (Value proposition). The literature on collaborative enterprises/network is also examined with particular emphasis on supply chains, extended/virtual enterprises and clusters as representatives of different forms and maturities of collaboration. The interplay of value transactions and competencies and capabilities are examined and discussed in detail. Finally, a model is presented which consists of value transactions and a table which compares the characteristics of different types of collaborative enterprises/networks. It is proposed that this model presents a platform for further research to develop an in-depth understanding into how value may be created and managed in collaborative enterprises/networks.

Production Planning & Control, 2011

Strategic networks such as Collaborative Networked Organisations (CNOs) and Virtual Customer Communities (VCCs) show a high potential as drivers of value co-creation and co-innovation. Both look at the network structures as a source of jointly value creation and open-innovation through access to new skills, knowledge, markets and technologies by sharing risk and integrating complementary competencies. This collaborative endeavour is able to enhance the adaptability and flexibility of CNOs and VCCs value creating systems in order to react in response to external drivers such as collaborative (business) opportunities. Strategic business networks are active entities continuously adapting to their environment in order to enhance their capabilities to respond to short-term business opportunities, and therefore allow their business ecosystems to follow the rhythm of industry dynamics, and customers changing needs and preferences. Value co-creation is the new trend in open-business models trying to integrate organisations" competencies and involve customers" individual preferences into network and community formations for the co-creation of the next level of value for products, services and experiences to be launched into the market. This paper presents a literature review on value co-creation and co-innovation concepts and styles, and proposes a reference framework for creating interface networks, also known as "experience-centric networks", as enablers for linking networked organisations and customer communities in order to support the establishment of sustainable user-driven and collaborative innovation networks.

International Journal of Management and …, 2011

Leveraging Knowledge for Innovation in Collaborative Networks, 2009

Strategic networks such as Collaborative Networked Organisations (CNOs) and Virtual Customer Communities (VCCs) show a high potential as drivers of value co-creation and collaborative innovation in today's Networking Era. Both look at the network structures as a source of jointly value creation and open innovation through access to new skills, knowledge, markets and technologies by sharing risk and integrating complementary competencies. This collaborative endeavour has proven to be able to enhance the adaptability and flexibility of CNOs and VCCs value creating systems in order to react in response to external drivers such as collaboration (business) opportunities. This paper presents a reference framework for creating interface networks, also known as 'experience-centric networks', as enablers for linking networked organisations and customer communities in order to support the establishment of user-driven and collaborative innovation networks.

International Journal of Quality and Service Sciences, 2010

Purpose: A common thread in the modern marketing theories, such as service-dominant logic and viable systems approach VSA , is the notion value co-creation: the locus of value creation is no longer perceived to reside within firm boundaries but value is considered to be co-created between various actors within the networked market. The evolution of value creation, from value creation by the manufacturing firm to value cocreation in a network, necessitates a corresponding change in the concepts used to depict value creation. The present research investigates business models as a broader conceptualization of value co-creation that captures this change. Design/methodology/approach: The topic is approached by a combination of literature review and interactive research (Gummesson, 2002a), including interactions with managers from 12 international companies. Findings: Business models are defined as configurations of twelve interrelated elements, covering market, offering, operational, and management viewpoints. The effectiveness of a business model in value co-creation is defined by the internal configurational fit between all business model elements and the external configurational fit between provider's and customers' business models. Practical implications: A firm can radically improve the value co-creation by designing business models that have high degree of internal and external configurational fit. Originality/value: For a scholarly audience the article contributes to the discussion on value cocreation by providing a conceptualization of the business model construct depicting the value cocreation in a network. For a practitioner audience it offers ideas for improving business performance through conscious business model development.

The Learning Organization, 2009

European Journal of Information Systems, 2019

Organisations operate in increasingly dynamic environments, internetworked in cooperative arrangements that cocreate value. They pursue the cocreation of value through collaborative networks, rather than in isolation. However, there is insufficient understanding of how networked organisations cocreate value in the network through the innovative use of information systems (IS): existing multi-firm studies are largely concerned with dyadic relationships. In terms of capturing value from the cocreation process, many studies have reported either enhanced organisational efficiencies (exploitative capability) or resulting innovations (explorative capability), but rarely both aspects simultaneously. This study attempts to draw a comprehensive picture of IS-based value leverage by reporting both the value cocreation process (network level) and value capture (organisational level) through a case study of innovative IS use in a large business network. This network links a public hub organisation with a large number of firms in the South Korean broadcast advertising industry. Drawing on Grover and Kohli's framework for value cocreation, the case study investigates the detailed process by which network-level value cocreation occurs in the four layers of relational arrangements. It also highlights, from an organisational ambidexterity perspective, how the cocreated value is appropriated through ambidextrous activities by the networked organisations.

This paper deals with value creation in industrial networks. The argument put forward is that value is realised in the exchange between two business actors. However, the antecedents of the value must be search for both beyond the focal exchange of resources, as well as below the same. Therefore we argue that the industrial networks contains two layers. The first is exchange layer and the second is the resource layer. Furthermore, the authors claim that the exchange layer is embedded in the resource layer. In order to find potential value and realise the value of an exchanged resource, a firm must recognise and manage the embeddedness. The arguments are supported by a case from the pulp and paper industry, where a specific paper grade is exchanged between two major European firms within this field.

Journal of Management Studies, 2006