Martin Johanson

Sudden Death : Dissolution of Relationships in the Russian Transition Economy

A case study of a printing house in Russia is used to analyse relationship dissolution after the Russian transition to market economy in 1992, when many customer-supplier relationships inherited from the plan-governed economy were dissolved. The thin networks around the relationships, together with mutual lack of knowledge and weak interdependence between firms, made the relationships fragile and easily dissolved when exposed to shifts in demand and supply and to the new rights of the firms to choose their customers and suppliers.

Opportunities, relational embeddedness and network structure

The thesis of this chapter is that the characteristics of the business network surrounding the firm have a profound impact on how the firm finds and exploits opportunities. Characteristics of networks and relations between network actors have been increasingly researched during recent decades (see e.g. Dyer and Chu, 2000; Grabher, 1993; Granovetter, 1985, 1992; Gulati, 1998, 1999; Gulati et al., 2000; Hakansson and Snehota, 1995; Halinen and Tornroos, 1998; Kogut, 2000; McEvily and Zaheer, 1999; Rowley et al., 2000; Uzzi, 1996, 1997; Zukin and Di Maggio, 1990). In parallel, a wide and strong tradition of research has emerged on the nature of opportunity, especially among entrepreneurship researchers (see e.g. Ardichvili et al., 2003; Eckhardt and Shane, 2003; Shane, 2000). We aim to combine these two traditions and seek to develop a model for analyzing the relation between different types of opportunities and different types of relationships and networks. Entrepreneurial behavior and social networks have previously been explored (Ardichvili et al., 2003; Ellis, 2000; Jack and Anderson, 2002; Kenney and Goe, 2004; Simsek et al., 2003). These studies have observed that there seems to be a relation between finding an opportunity and the characteristics of the social network, but to our knowledge there are no studies investigating the character of relationships and network configurations and how it influences the firm’s way of finding and exploiting opportunities.

Integration of relationships and business network development in the Russian transition economy

The transition to market economy in Russia in the 1980s and 1990s is analysed in terms of fragmented and integrated relationships in business networks. A longitudinal case study of the relationships of a Russian company shows that integrated relationships are replacing fragmented ones, that is, relationships which only include either exchange connections or resource use dependence are phased out in favour of relationships which include both these dimensions. This development towards a network of integrated relationships is driven by the pressure of change generated by the incompleteness of fragmented relationships but slowed down by the complexity of multilateral use dependence.

Networks in internationalisation

Purpose – The purpose of this chapter is to provide a review of literature that analyses the internationalisation of the firm, through the function and role of networks. Design/methodology/approach – A total of 23 papers (published between 1988 and 2008) explicitly using network as a research framework to study the internationalisation process of the firm were selected. They have been analysed according to a range of factors, including the author, journal, time frame in which they were published, type of focal firm, country of origin of focal firms, market entered, methods applied in the studies, theories adopted and research topic. Findings – Networks have emerged as one of the dominant frameworks used to explain the phenomenon of internationalisation. Having originally been applied in studies of firms from developed countries entering similar markets, network theories are now as popular in studies of firms both originating in and entering emerging markets. This review also finds that both qualitative and quantitative methods have been adopted in the studies; however, few papers have tried to combine the two. Furthermore, the network approach has been used for comparative analysis with findings from FDI theory, as well as to supplement international new venture (INV) and born global theories. Lastly, this review highlights topics that have been explored in previous studies and suggests areas for further research. Originality/value – This is the first review paper on this subject and as such it contributes to the growing body of knowledge on the network approach and assists in understanding the internationalisation phenomenon of the firm.

Entering and Participating in the Turbulent Russian Market: Internationalisation as a Search and Discovery Process

Abstract This paper discusses how foreign firms enter and operate in a turbulent Russian market. Following the internationalisation process model, this paper is based on the assumption that current business activities are a driving force of internationalisation. Since planning in highly turbulent and uncertain markets is difficult, the IP model with its emphasis on gradual learning provides a good starting point. When foreign markets are assumed to be rather static, experiential knowledge can be easily utilised in subsequent actions. However, the Russian market is highly turbulent, which questions the value of experiential knowledge and seems to challenge the validity of the IP-model. In an attempt to address this problem, the paper suggests to deconstruct the concept of current business activities, so that it becomes more powerful in explaining the behaviour of firms in the markets characterised by high turbulence. Drawing on the Austrian Economics, this paper suggests that current business activities in a foreign market can conveniently be seen as consisting of two fundamental processes-search and discovery. The search process occurs when a firm already has knowledge about what it is looking for, but has to search for it. The discovery process initiates as searching for something known, but the turbulence turns it into a discovery of something else. Since the market conditions change rapidly and the knowledge is imperfectly distributed, discovery is an essential part of the firms business activities in the Russian market. In the end, the paper discusses the implications of search and discovery processes for firms both entering and participating in the Russian market. Finally, it advances relationship as a mechanism to handle the market turbulence.

Expectation as the Driving Force for Entry and Exit in the Turbulent Russian Market

Summary The market activities of international firms are now in unstable markets. Their decisions on how to act in such markets depend on their expectations of the future. The aim of this paper is to analyse the process of change in the expectations of a Swedish firm operating in the Russian market and facing dramatic market changes. To study the expectation behaviour of the firm, a longitudinal method covering the period from 1986 to 1993 is employed. The paper examines the expectation change process and the way the firm builds up its future market operation in order to penetrate, expand, and then exit from the Russian market. The absence of stability forced the firm to function either without any experiential knowledge or with knowledge that constantly lost its value. The thrust of this paper is grounded in the explanation that the basis of market activities rests on three forms of expectations: institutional, relationship, and network. The expectation view captured in the study is process-based and was explored through the concepts of commitment and knowledge from the internationalisation process model.

Buyer seller relationships in transition

ABSTRACT Two Russian case studies have been investigated by adopting a relationship marketing perspective and adding a new concept, that of relationship knowledge. Relationship knowledge is assumed to be the main condition for relationship success in terms of and is visible through the more efficient execution of activities and implementation of new resources. The conclusion is that in Russia, the inadequate levels of trust, commitment and business activity lead to low external knowledge of the counterpart, which hampers development.

The performance of international returnee ventures : the role of networking capability and the usefulness of international business knowledge

Abstract This paper sheds light on the international new ventures led by returnee entrepreneurs and investigates the influence of networking capability and the usefulness of international knowledge for the overall performance of so-called international returnee ventures (IRVs). By integrating network theory with a capability view of firm performance, it advances six hypotheses that form a structural model, which is tested with LISREL on a sample of 194 IRVs from China. The findings show that international networking capability has a positive influence on the provision of international business knowledge, which in turn is positively related to the innovation performance, but they have a negative impact on the financial performance. Hence, this study presents a discussion of the usefulness of knowledge gained from the international network relationships of emerging market returnee entrepreneurs.

Time, Temporality, and Internationalization: The Relationship Among Point in Time of, Time to, and Speed of International Expansion

Speed of internationalization is a multidimensional concept with performance consequences, but little is known about the interrelatedness between different time-related concepts. The authors address this deficiency by developing three hypotheses, which are confronted with a data set collected on site at 203 small and medium-sized enterprises. The analysis reveals that (1) the longer the time to internationalization, the lower the speed of international expansion; (2) the earlier the point in time when internationalization starts, the lower the speed of international expansion; and (3) there is an antagonistic interaction effect revealing that the negative effect on the speed of international expansion caused by a longer time to internationalization is moderated by the point in time when internationalization starts. The study contributes to theory by examining the interrelatedness between temporal concepts in the internationalization literature and by showing how the underlying mechanisms influencing internationalization speed change over time. For managers, insights into the importance of time and temporality for successful international expansion are provided.

The internationalization processes of the firm: a new research agenda

This paper examines the fundamental assumptions and features of the Uppsala model of internationalization to suggest they have prevented the exploration of several conceptually relevant aspects of the internationalization of the firm. We identify three neglected issues that offer significant potential for further theoretical and empirical work, specifically the pre-history of internationalization, the internationalization of multiple products within the confines of the growing multinational corporation, and the internationalization of foreign units.