Paper info

Change options through network relations

Lars Huemer , Manuel Becerra and Randi Lunnan

The paper was published at the 17th IMP-conference in Oslo, Norway in 2001.

This paper takes up the ideas of Gulati, Nohria and Zaheer (2000) and Håkansson andFord (2000) who propose that network relations have a dual side. On one hand,networks offer access to resources, such as learning and new knowledge andinformation. On the other hand networks constrain and limit firm activities. This dualnature of networks is particularly relevant in times of change, as networks offerresources that improve the change positions in firms, e.g. enhance firm platformoptions (Kogut and Kulatilaka 1994). At the same time networks restrain therepertoire of actions by linking the firm to the network structure (Håkansson and Ford2000).In this paper, we take these ideas a step further by trying to understand what theseresources and constraints are all about. First, we draw on a quantitative study givinginformation both on how the firm perceives its network in total and some of itsnetwork partners. On the network level we see that firms that claim to get valuableresources from the network are also those that feel most "locked in". On therelationship level we can see that access to knowledge vary between networks. Whatis interesting to see is that those firms that get most knowledge out of their networkrelations are those that perceive risk to be lowest. This suggests either that knowledgeis only transferred or created in situations of low risk, or that risk is secured throughtrust or adequate safeguards. Through these variables, we were able, throughdiscriminant analysis, to distinguish between three different networks, giving someinsight about the nature of resources and constraints, and the relation between them.To understand these differences further, and to explore more in depth the changeoptions nature of these dual concepts, we suggest to perform interviews with firmsfrom these networks. To this date, only one of these interviews has been performed.We end this paper by discussing insight from this interview.