THE IDEAS AND APPROACH OF THE IMP GROUP HAKAN HAKANSSON AND DAVID FORD IMP GROUP

BACKGROUND 1976 FIRST MEETINGS IMP 1 PROJECT – FIVE COUNTRIES, c 1000 INTERVIEWS FIRST BOOK 1982

CONTINUING…………. FIRST IMP CONFERENCE 1984 IMP 2 PROJECT 1995 impgroup. org 23RD ANNUAL IMP CONFERENCE MANCHESTER 2007

EMPIRICALLY BASED CHALLENGES ANALYSIS OF DISCRETE PURCHASES

EMPIRICALLY BASED CHALLENGES ANALYSIS OF DISCRETE PURCHASES: RELATIONSHIPS

EMPIRICALLY BASED CHALLENGES ANALYSIS OF DISCRETE PURCHASES: RELATIONSHIPS MANIPULATION OF MIX VARIABLES

EMPIRICALLY BASED CHALLENGES ANALYSIS OF DISCRETE PURCHASES: RELATIONSHIPS MANIPULATION OF MIX VARIABLES: INTERACTION

EMPIRICALLY BASED CHALLENGES ANALYSIS OF DISCRETE PURCHASES: RELATIONSHIPS MANIPULATION OF MIX VARIABLES: INTERACTION ATOMISTIC STRUCTURE OF MARKETS

EMPIRICALLY BASED CHALLENGES ANALYSIS OF DISCRETE PURCHASES: RELATIONSHIPS MANIPULATION OF MIX VARIABLES: INTERACTION ATOMISTIC STRUCTURE OF MARKETS: STABILITY

EMPIRICALLY BASED CHALLENGES ANALYSIS OF DISCRETE PURCHASES: RELATIONSHIPS MANIPULATION OF MIX VARIABLES: INTERACTION ATOMISTIC STRUCTURE OF MARKETS: STABILITY SEPARATE ANALYSIS OF CUSTOMER AND SUPPLIER: SIMILARITY

PUTTING THESE CHALLENGES TOGETHER…. THE CHALLENGE TO STRUCTURE THE CHALLENGE TO PROCESS

TWO CHALLENGES….. THE CHALLENGE TO STRUCTURE: COMPANIES AND MARKETS OR NETWORKS AND RELATIONSHIPS

TWO CHALLENGES….. THE CHALLENGE TO STRUCTURE: COMPANIES AND MARKETS OR NETWORKS AND RELATIONSHIPS THE CHALLENGE TO PROCESS: INDEPENDENT ACTION OR INTERDEPENDENT INTERACTION

WHAT HAS HAPPENED IN THE REAL WORLD? DIVERSITY OF MODELS SPECULATION VS POSTPONEMENT GREATER INTERDEPENDENCE EASIER CO-ORDINATION SEPARATION OF TECHNOLOGIES/FUNCTIONS BETWEEN COMPANIES

WHAT HAS HAPPENED TO OUR CHALLENGE TO STRUCTURE?

EVERYONE TALKS ABOUT RELATIONSHIPS:

WE BELIEVE THAT THE IDEA OF RELATIONSHIPS HAS ONLY BEEN PARTIALLY ADOPTED

EVERYONE TALKS ABOUT RELATIONSHIPS….. …..BUT AS A TECHNIQUE

LOOKING MORE CLOSELY AT RELATIONSHIPS… RELATIONSHIPS ARE AS FUNDAMENTAL AS ORGANISATIONS THEMSELVES. EXISTING INTERDEPENDENCIES FORM CONTEXT FOR RELATIONSHIPS INTERDEPENDENCIES ARE THE OUTCOME OF RELATIONSHIPS. DYNAMICS TEND TO OCCUR WITHIN HETEROGENEOUS RELATIONSHIPS,

WHAT HAS HAPPENED TO OUR CHALLENGE TO PROCESS?

…..AN INTERACTION VIEW IS DIFFICULT TO RELATE TO A SINGLE COMPANY VIEW.

INTERACTION….. IS BEYOND THE CONTROL OF AN INDIVIDUAL ACTOR. THE EFFECTS OF ANY ACTION DEPEND ON THE PERCEPTIONS AND REACTIONS OF OTHERS. IT IS INCREMENTAL, NOT DISCONTINUOUS IT CAN ONLY BE UNDERSTOOD IN ITS RELATIONSHIP/NETWORK CONTEXT.

INTERACTION….. INTERACTION MAKES IT IMPOSSIBLE TO MAKE SENSE OF WHAT HAPPENS BETWEEN COMPANIES BY LOOKING AT JUST ONE OF THEM. THE DIRECTION OF A BUSINESS RELATIONSHIP IS OUTSIDE THE CONTROL OF A SINGLE COMPANY. SUCCESS OR FAILURE FOR A RELATIONSHIP CANNOT BE EXPRESSED SIMPLY FROM THE PERSPECTIVE OF A SINGLE COMPANY.

WHY HASN’T THE IDEA OF INTERACTION BEEN ADOPTED? BUSINESS MODELS START OUT FROM A SINGLE ACTOR - “MARKETING IS A COMPANY AFFAIR”.

SOME IMPLICATIONS FOR RESEARCH INTERACTION INVOLVES SPECIFIC OTHERS INTERACTION IS CLOSELY ROOTED IN THE PAST ALL INTERACTION IS JOINT THE TANGIBLE ASPECTS OF BUSINESS ARE ACTUALLY LESS SUBSTANTIAL THAN THE INTERACTION BETWEEN THEM. STRATEGY IS ABOUT ASSESSING INTERACTIVE PROCESSES IN THEIR WIDEST SENSE INTERACTION MEANS THAT NO COMPANY IS ANY WHERE NEARLY IN CONTROL OF ITS OWN DESTINY!

INTERNATIONAL BUSINESS NETWORKS EXISTENCE OF INTERNATIONAL BUSINESS NETWORKS RESULT OF TWO DIFFERENT TRENDS DEVELOPMENT OF EXTENSIVE RELATIONSHIPS BETWEEN BUSINESS PARTNERS BREAKING UP OF INTEGRATED INTERNATIONAL COMPANIES

NETWORKS – EFFECTS NEGATIVE: MANIPULATIVE, NON- DEMOCRATIC, POLITICAL (SERVING OWN INTERESTS), DIFFICULT TO SEE THROUGH POSITIVE: CREATE OPPORTUNITIES FOR CO-EVOLUTION WITH EFFECTS ON BOTH EFFICIENCY AND INNOVATIONS

A NETWORK CASE NETWORKS ARE COMPLEX AND DEVELOPMENT MULTIDIMENSIONAL A VERY SIMPLE PRODUCT (BARALDI 2003) IF IMPORTANT NETWORK EFFECTS MORE COMPLEX PRODUCTS CAN BE EXPECTED TO INCLUDE EVEN MORE OF SUCH EFFECTS

The Lack table

Enrico Baraldi 1 IKEA (in 2003) IKEA: 65,000 people >550 directly controlled business units 180 retail outlets (30 countries), 230 million visitors/year 25 Distribution Centres 40 Purchase Offices (in 33 countries) 12,000 products, SEK100 billion turnover IKEA catalogue: 110 million copies Strategic heart: “IKEA of Sweden”, 600 people, 12 GBAs (>30 “Istras”) A production-led retailer: Develop & design products for affordability, manufacturing, logistics and last-mile in cooperation with >2,000 direct suppliers, 10,000 (?) indirect ones

Enrico Baraldi 2 ”Lack”: an unusual coffee table “Lack”: Retail price SEK99 for basic version. CONSTANT for 22 years! Sales: 2.5 million pieces, SEK300 million Sole supplier: Swedwood Poland (IKEA-owned) Technology: “board-on-frame” Inputs: HDF, honeycomb filling, lacquers, chipboard, veneers Constantly developed: technology & concept, for sales & costs Hundreds of projects in close cooperation with key suppliers Technology then applied to other IKEA products

Enrico Baraldi 3 ”Lack”: an interactive development story >20 B. units involved, mostly outside IKEA GBA2 at IKEA of Sweden: complete responsibility on “Lack” Swedwood BoF-division, Poland (three plants): produce IKEA TSO, Poland : purchase Wicoma, Poland: engineering partner KronoPol, Poland: HDF, chipboard supplier Becker-Acroma and Akzo-Nobel, Sweden: lacquer suppliers Sorbini, Italy, Bürkle, Germany: coating line suppliers IKEA Sales Organizations, Retail Units, Distribution Centres

Enrico Baraldi 4 ”Lack”: complex technology under the surface Board-on-frame: more components and complex construction Coating technology: expensive, delicate and highly adapted Necessary close interaction with technology specialists/suppliers Key facilities affecting Lack (costs, quality etc.): Leg line, 3 bordering lines, veneering line 6 coating lines, 2 print-on-wood lines Warehouses at production plant and distribution centres Transport equipment (damages, costs, time) Retail stores Hard to balance and tune the effects of all facilities, components etc: Impossible to “optimise” or “adapt” everything: 10,000 other Ps Small but continuous steps and experimenting!

TSO Poland Local Ikea Distribution Centres GBA2/IOS 3 Swedwood plants (PL) Becker Acroma Lacquer Surface line Warehouse DC house Akzo-Nobel Ikea Stores Retail Store Border line Krono (PL) HDF Local Ikea Sales Organiz. "Lack" -Product -Facility -Business unit -Business relationship The “resource network” involved in producing and marketing Lack

CONTENT OF BUSINESS RELATIONSHIPS WHAT DOES A WELL-DEVELOPED BUSINESS RELATIONSHIP LOOK LIKE? LONG TERM AND BROAD INFORMAL ADAPTATIONS CO-OPERATION BUT ALSO CONFLICTS BUT ALSO “BURDEN OF RELATIONSHIPS”

CONTENT OF BUSINESS RELATIONSHIPS (CONT.) DEVELOPMENT – CO-EVOLUTION OF THE TWO PARTIES TECHNICAL CONNECTIONS SOCIAL BONDS KNOWLEDGE – LEARNING, TEACHING, JOINT KNOWLEDGE BUT THEY ARE NOT ISOLATED DYADS!

EFFICIENCY IN NETWORKS CONNECTED RELATIONSHIPS AS A MEAN TO LINK INTERDEPENDENT ACTIVITIES PRODUCTION ACTIVITIES LOGISTIC ACTIVITIES (TRANSPORTATION AND HANDLING) ADMINISTRATIVE ACTIVITIES ECONOMIZING ON EXISTING AND CREATED INTERDEPENDENCIES

EFFECTIVENESS IN NETWORKS CONNECTED RELATIONSHIPS AS A MEANS TO TIE RESOURCES PHYSICAL RESOURCES SUCH AS FACILITIES OR PRODUCTS ORGANIZATIONAL RESOURCES SUCH AS KNOWLEDGE AND CAPABILITIES SUCCESSIVELY CHANGING AND DEVELOPING THE EMERGING ECONOMIC STRUCTURE

MARKET AND ACTION: NETWORK AND INTERACTION STRUCTURE AND PROCESS Defined by product. Anonymous members Atomistic Heterogeneity inside units Competitive Competition/independent companies Vendors and customers separate Stable (except counterparts) Change from external sources. Product life cycles within market STRUCTURE AND PROCESS Defined by threads, nodes. Individually identifiable members Particular Heterogeneity also between units Conflictful and cooperative Relationships/ inter-dependent companies Multiple/unclear roles Changing (except in counterparts) Different trends and changes All mediated through relationships

MARKET AND ACTION: NETWORK AND INTERACTION ACTIONS ACTIONS OF SINGLE ACTORS COMMON MODES OF BEHAVIOUR ACTIONS A RESULT OF INDIVIDUAL STRATEGY HOMOGENEOUS PRODUCTS FOR MULTIPLE CUSTOMERS SINGLE SUPPLIER CONTROLS MARKETING MIX DISTRIBUTION MANAGED BY PRODUCER MARKET IS DEMAND DRIVEN DIFFERENT ACTIVITIES FOR SUPPLIERS AND CUSTOMERS INTERACTIONS INTERPLAY BETWEEN ACTORS. INDIVIDUAL MODES OF BEHAVIOUR INTERACTIONS A RESULT OF HOW COMPANIES RELATE HETEROGENEOUS OFFERINGS FOR INDIVIDUAL CUSTOMERS MULTIPLE COMPANIES INVOLVED IN OFFERINGS. COORDINATION OF OFFERING ABSENT /MANAGED ANYONE NETWORK IS PROBLEM DRIVEN ALL COMPANIES ENGAGED IN NETWORKING