Stroi Network FUTURE BUSINESS NETWORKS IN RUSSIA Kalle Kähkönen

Kalle Kähkönen and Pekka Huovila FUTURE BUSINESS NETWORKS IN RUSSIA FOR PROJECT BASED BUSINESS 2 PROJECT MANAGEMENT Single project procurement practices PROJECT NETWORKS Temporary PROJECT BUSINESS Strategic sourcing Long-term view PROJECT BUSINESS NETWORKS Long-term Single project Many projects FirmMany firms

3 How to respond successfully to the demands of changing markets? Vision Business Strategy Business Model Business Networking Economic logic to deliver value Environment, business, own position Situation Specific Partnering Leading Business Network Vision = From traditional business networking towards more agile solutions enabled by new goals and roles. Virtual Networks provides highest needed flexibility  Aims to create preparedness of participating players to set up a virtual organisation (VO) to meet market challenges  Different levels of commitments and rules possible

Broker centric business networks 4 Broker centred business networks for sales Broker as a new role for some existing partner Possible focus areas: Joint tender development, Finance agent Broker centred production and deliveries Broker as a new role for some existing partner Possible focus areas: Logistics management broker, subcontractor management broker

TYPES OF BUSINESS NETWORKS 5 Virtual Networks provides enrichning novel approach over various business networks. Uncompelled Business Networking 1. Long-term business network 2.Short-term project network 3.Business breeding networks (casual-contact networks, Virtual Breeding Environment) Technology enabled Business Networking 4.Online networks (Collaborative Innovation Network, sales network) Service oriented Business Networking 5.Service organizations (consultants, local agents) 6.Professional associations (knowledge networks) 7.Social/business organizations

Project business networks 6 Different suppliers and other stakeholder brought together around temporary projects in different stages of the production process strongrelationship weakrelationship X X Actorparticipatingtocurrentproject Actornotparticipatingtocurrentproject A E G D C F J I H B Project 1 A E G D C F J I H B Project 2 time A E G D C F J I H B Project 3 time

Control of business networks – METHOD 7

Control of business networks – EXAMPLE 8

Institutional factors in Russia affecting the creation and maintenance of business networks Personal bonding and contacts  As key instruments for for the creation and maintenanance inter-personal relationships of strategic importance “Third persons”  The interpersonal networks involve persons beyond the simple dyadic relationship Expatriates staying > two years  Short staying do not provide opportunities for establishing strong inter- personal relationships. ”Silence” to be avoided  Maintaining the relationship and contacts between projects and also during the project execution is a Russian expectation 9

Conclusions and recommendations Employ systematic procedures for business network management.  Tools, regular reviews, item in management meeting agenda Broker approach for business network development  Use of inter-personal relationships as a catalyst for new kind of business networking Malfeasance safeguarding based on long-term relationships  Competitive advantage and difficult to imitate Project start-up needs more attention  The initial project delivery determines how the relationship can be strengtened 10