Frontpage  About  admin@impgroup.org
Paper info: Strategizing in industrial networks. Fallacies of customer order based production

Title


Strategizing in industrial networks. Fallacies of customer order based production

Authors


Benedikte Borgström
Chalmers University of Technology
Sweden
Benedikte Borgström and
Susanne Hertz
Jönköping International Business School
Sweden
Susanne Hertz

Place of Publication


The paper was published at the 24th IMP-conference in Uppsala, Sweden in 2008.

Download


Download paper
(206.8 kb)

Abstract


Recently, it was claimed that the overall contribution of the IMP approach to the strategy literature has been insignificant and that, within the strategic management field, the strategy-as-practice research is of particular interest to exchange ideas regarding industrial network's strategising. In this paper, we are theoretically concerned with how people's activities links to organizational strategies, both in term of content and in term of process. The promise of customer order based production is related to customer orientation as well as to cost reductions. Our standpoint is that strategy is not something an organization or a supply chain has, it is a practice that people do. Therefore dynamics is important to understand fallacies of customer ordered based production and thereby strategic development.Our purpose is to describe and analyse how strategizing influences the intended outcome of a customization strategy.The theoretical framework is based on supply chain strategies, especially, customer order based production. Strategizing in industrial networks is the major theoretical contribution. We use illustrations based on an automotive in-depth case study to analyse dynamics of the strategy. The strategy in practice forms phases of a pattern in the strategy development. Interactive strategizing (such as new-owner rhetoric) reframes and realigns goals while procedural strategizing (such as routines for supply chain planning and production) resists unplanned change. Shifting demand and irregular profitability are examples that create goal ambiguity regarding standardization / customization and that influence especially interactive strategizing towards increased importance of costs. When low costs become a means to an end of increased profit it is fallacious to expect retained customer responsiveness.