Paper info: Netquakes - Describing Effects of Ending Business Relationships on Business Networks
Netquakes - Describing Effects of Ending Business Relationships on Business Networks
Jönköping International Business School
Place of Publication
The paper was published at the 21st IMP-conference in Rotterdam, Netherlands in 2005.
Business network dynamics and change in business networks are most often discussed from the perspective of a focal business relationship and business relationships, for example customers and/or suppliers, connected to the focal dyad. This type of studies focus on how one relationship influences another directly connected relationship. Most often the indirectly connected business relationships, such as customers’ customers, are not considered. This means that we still know very little about how change spreads further in business networks.The purpose of this paper is to elaborate further on the spread of change in business networks by focusing on the process following the ending of a business relationship. For understanding this process of change in business networks we propose a framework that is inspired from the study of earthquakes in seismology, here called “netquakes” (Dahlin, Havila & Thilenius, 2004). When enough “stress” is involved in the relationship it needs to be released. In some situations this “stress” leads to termination of the business relationship. This, in turn, could start a netquake process in the surrounding business network. The strength of the netquake process can be observed through the effects of the ending business relationship in the connected relationships. The higher the effect in the business network the stronger the netquake. The ending of the business relationship, in turn, “releases energy” into the business network causing uncertainty that can be observed by the effects in the business network. The ending of some business relationships “shake the ground” far away from the ending business relationship, whereas some business relationships end without any effect on the surrounding business network. We illustrate our discussion on the different types of netquake processes by three empirical examples.