Managing Opportunity Development in Business Networks

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Managing Opportunity Development in Business Networks

Edited by

Pervez Ghauri

Amjad Hadjikhani

and

Jan Johanson

* © Pervez Ghauri, Amjad Hadjikhani and jan johanson 2005

Softcover reprint of the hardcover I st edition 2005 978-1-4039-4769-7

All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission.

No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP.

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The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988.

First published in 2005 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world.

PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin's Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries.

ISBN 978-1-349-52457-0 DOl I 0.1057/9780230379695

ISBN 978-0-230-37969-5 (eBook)

This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources.

A catalogue record for this book is available from the British Library.

Library of Congress Cataloging-in-Publication Data

Managing opportunity development in business networks I edited by Pervez Ghauri,Amjad Hadjikhani and jan johanson.

p. cm. Includes bibliographical references and index. ISBN 978-1-349-52457-0 1. International business enterprises- Management. 2. Entrepreneurship.

3. Business networks - Management. 4. Globalization- Economic aspects. 5. Competition, International. I. Ghauri, Pervez N., 1948- II. Hadjikhani, Amjad.lll. johanson, jan, 1934-

HD62.4.M3672 2005 658' .044--dcZZ 2005046304

10 9 8 7 6 5 4 3 2 14 13 12 11 10 09 08 07 06 05

Contents

List of Figures vii

List of Tables ix

List of Contributors x

Introduction: Opportunity Development in Business Networks 1 Amjad Hadjikhani, Pervez Ghauri and Jan Johanson

Part I Opportunity Development in Business Networks: Conceptual Development

1 Opportunities, Relational Embeddedness and Network Structure 27 Ulf Andersson, Desiree Blankenburg Holm and Martin Johanson

2 The Importance of Competition and Cooperation for the Exploration of Innovation Opportunities 49 Maria Bengtsson, Jessica Eriksson and Soren Kock

3 International Entrepreneurial Culture, International Opportunity Perception and Pattern of International Exploitation: Towards an Integrated Model 67 Pavlos Dimitratos and Marian V. Jones

4 Subsidiary Business Networks and Opportunity Development in Multinational Enterprises: A Comparison of the Influence of Internal and External Business Networks 91 Mohammad Yamin

5 Value Processes in Industrial Networks: Identifying the Creation and Realisation of Value 110 Martin Johanson and Torkel Stromsten

Part II Opportunity Development in International Business

6 Business Opportunities, Subsidiaries and Interpreneurial Activity 127 Cecilia Pahlberg and Magnus Persson

vi Contents

7 International Experience and the Recognition of Business Opportunities in Foreign Markets - A Study of SME's International Experiences and Choice of Location 146 Jukka Hohenthal and Jessica Lindbergh

8 Opportunities of Being Multinational: A Study of Organizational Rejuvenation, Relationships and Knowledge 164 Maria Adenfelt and Katarina Lagerstrbm

9 Learning across the Border? Innovations, Knowledge Sharing, and Business Opportunities in MNCs 180 Fang Lee Cooke

10 Network Opportunities and Obstacles in Mergers and Acquisitions: The Role of Resource Embeddedness 202 Enrico Baraldi and Torkel Stromsten

11 Reputation as Opportunity and Risk 219 Carin Eriksson and Jan Lindvall

Part III Opportunity Development and Networks

12 The Role of Business Opportunity Mediators in the Entrepreneurial Process 235 Bjorn Berggren and Lars Silver

13 Opportunity Development for Ongoing Business Relationships 250 Cecilia Pahlberg and Peter Thilenius

14 Opportunities and Obstacles in Using IT Systems: Embedding Movex in Edsbyn's Resource Network 269 Enrico Baraldi

15 Creating New Opportunities from Old Resources through Contextually Determined Information Asymmetries 288 Anna Bengtson and Susanne Aberg

16 The Emergence and Exploitation of Opportunities in Business Networks 306 Benjamin Stdhl

Epilogue: Opportunity Development in Business Networks 325 Amjad Hadjikhani and Jan Johanson

Index 332

List of Figures

LI Opportunity development process 12 1.2 Balance/imbalance in the opportunity elements 14 1.1 Relational embeddedness 31 1.2 Open (A) and closed (B) networks 34 1.3 The rent accruing position in an open network 35 1.4 Rational use of limited resources in an open network

according to Burt (1992a) 36 1.5 Impact on finding and exploiting opportunities by

embeddedness and network structure 37 1.6 An open network with a low degree of relational

embeddedness 38 1.7 A closed network with a low degree of

relational embeddedness 39 1.8 An open network with a high degree of

relational embeddedness 41 1.9 A closed network with a high degree of

relational embeddedness 42 1.10 A semi-open network with different degrees

of relational embeddedness 45 2.1 Networks characteristics and opportunity seeking patterns 57 2.2 Network slack and network dynamics 61 3.1 A Simple integration: international entrepreneurial

culture, international opportunity perception and international opportunity exploitation 68

3.2a The entrepreneurial process 70 3.2b The international entrepreneurial process 71 3.3 Towards a detailed integration: international

entrepreneurial culture, international opportunity perception and international opportunity exploitation 72

5.1 A model of the creation and realisation of value 119 5.2 An illustration of the creation and realisation of value 120 6.1 The characteristics of business opportunities 130 6.2 The locus of interpreneurial activity 139 7.1 Percentage of first entries in the same cultural block

as the home market 155 7.2 The relationship between international presence,

managerial experiential knowledge and choice of location 157 9.1 Corporate entrepreneurship: the link between innovations

and business opportunities 185

viii List of Figures

9.2 Communication links in knowledge sharing in the MNCs 190 13.1 Opportunity development for ongoing business

relationships 257 14.1 The effects of an IT system on resources 273 14.2 Movex and the surrounding network of resources 279 14.3 Four types of IT-related opportunities, closer to and

farther from the IT core 283 14.4 Classifying IT-related opportunities and obstacles

for Edsbyn 285 15.1 The electronic payment resource network 291 15.2 Some of the actors involved in the ISDN network 295 16.1 ATD stock, data/product flow 315 16.2 Mutual opportunity in business networks 319

List of Tables

4.1 Subsidiary business network: Internal versus external business networks 97

7.1 The indicators 157 9.1 Strategies for creating business opportunities and

activities of knowledge management in the case study MNCs 187

10.1 Three types of opportunities driving mergers and acquistions 206

12.1 The role and contribution of the business opportunity mediator in the four cases 246

13.1 Indicators of areas of change in the business relationship 260 13.2 Indicators of connections in the business network 261 13.3 Areas of changes and connections as

opportunity development 262

List of Contributors

Maria Adenfelt, Department of Business Studies, Uppsala University, Sweden Ulf Andersson, Department of Business Studies, Uppsala University, Sweden Enrico Baraldi, Department of Business Studies, Uppsala University, Sweden Anna Bengtson, Department of Business Studies, Uppsala University, Sweden Maria Bengtsson, Department for Business Administration, Umea University,

Sweden Bjorn Berggren, Centre for Banking and Finance, Royal Institute of

Technology, Stockholm, Sweden Desiree Blankenburg Holm, Department of Business Studies, Uppsala

University, Sweden Fang Lee Cooke, Manchester Business School, The University of Manchester,

UK Pavlos Dimitratos, University of Strathclyde and University of Glasgow, UK Carin Eriksson, Department of Business Studies, Uppsala University, Sweden Jessica Eriksson, Department for Business Administration, Umea University,

Sweden Pervez Ghauri, Manchester Business School, The University of Manchester, UK Amjad Hadjikhani, Department of Business Studies, Uppsala University,

Sweden Jukka Hohenthal, Department of Business Studies, Uppsala University,

Sweden Jan Johanson, Department of Business Studies, Uppsala University, Sweden Martin Johanson Department of Business Studies, Uppsala University,

Sweden and Mid Sweden University Marian Jones, University of Strathclyde and University of Glasgow, UK Soren Kock, Hanken, Swedish School of Economics and Business

Administration, Finland Katarina Lagerstrom, School of Business, Economics and Law, Goteborg

University, Sweden Jessica Lindbergh, Department of Business Studies, Uppsala University,

Sweden Jan Lindvall, Department of Business Studies, Uppsala University, Sweden Magnus Persson, Department of Business Studies, Uppsala University,

Sweden Cecilia Pahlberg, Department of Business Studies, Uppsala University,

Sweden Lars Silver, Centre for Banking and Finance, Royal Institute of Technology,

Stockholm, Sweden

x

List of Contributors xi

Benjamin Stahl, Department of Business Studies, Uppsala University, Sweden

Peter Thilenius, Malardalens Business School, Sweden Torkel Stromsten, Stockholm School of Economics, Sweden Mohammed Yamin, Manchester Business School, The University of

Manchester, UK Susanne Aberg, Department of Business Studies, Uppsala University, Sweden