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Contents of IMP Journal issue 3, volume 1

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Business Recipes, Historical Narratives And The Discovery Of Networks


Lars-Erik Gadde and Luis Araujo


Both research and practice in recent decades have emphasised the benefits associated with
various types of network structures. Most of these advocates seem to assume that networks are a novel
phenomenon that can be explained as a response to problems inherent in the large, integrated business
enterprise. This perception is representative of a general view of industry dynamics as a succession of
waves of organising, dictated by selection patterns, in which more efficient forms displace outdated ones.
Our point of departure is that networks did not spring out of nowhere in the 1980s. They have
always been there, but were more or less 'hidden' since prevailing frameworks for the analysis of the
business landscape were aligned with business recipes emphasising the characteristics and benefits of
single companies, markets and hierarchies. The paper focuses on the mutual influence between business
recipes and historical narratives of industrial development. We argue that dominant business recipes
at a particular point in time are formed by interpretations of successful patterns of behaviour prevailing
for current conditions. Business recipes tend to build their own momentum and continue to be exploited
long after the conditions that gave rise to their emergence have disappeared. Eventually, new
narratives emerge to explain epochal transformations, expose fissures in old recipes and inspire new
patterns of business behaviour.

Supplier Segmentation "When Supplier Relationships Matter"


Göran Persson and Håkan Håkansson


In recent years, the supply side of companies has become increasingly important with regard to the efforts
to remain or to become competitive. A major challenge in this context and a key issue for many
companies is supplier segmentation, or how to differentiate a company’s approach towards different
types of suppliers. In this paper we will question some of the major assumptions in portfolio models used
for supplier segmentation. Further, we will suggest and discuss an alternative model based on the notion
that collaboration concerns the creation and exploitation of different types of interdependencies. We
will argue that collaboration is always possible, given that the two involved parties are interested and
capable of it. Thus, collaboration is not just beneficial in some specific situations but is always useful.

Key Words: supply management, supplier segmentation, portfolio models, types of interdependencies,
collaboration, and networks.

Contracting In Asymmetric Relationships: The Role Of Framework Contracts


Stefanos Mouzas and David Ford


Manufacturer-retailer relationships demonstrate the existence of asymmetric relationships
among companies. A large number of consumer goods manufacturers negotiate and conclude contracts
with a small number of highly concentrated grocery retailers. Consumer goods manufacturers have expertise
in the areas of sourcing, producing and marketing branded products which are demanded by
consumers. However, these manufacturers need to obtain listing for their brands within few grocery retailers
which represent a significant share of their business. Many companies choose to become dependent
on other strong companies because of the benefits that derive from their relationships, even if
they are asymmetric. The benefits may include securing substantial business size, cost advantages or
rationalisation of production and supply, simplification of business process and business reliance. Mergers
& acquisitions, shifting economic conditions, rapid technological changes, as well as global sourcing
create conditions for growing asymmetric interdependencies among companies. The present paper
deals with an increasingly important question, which is about how companies are contracting in these
asymmetric relationships. Based on empirical research in manufacturer-retailer relationships that covered
the period between 2002 and 2005, the study examines how companies use contracts to manifest
their joint choices over time. In general, contracts are manifestations of consent that give legal effect to
business relationships. In asymmetric relationships, such as manufacturer-retailer relationships, companies
choose to retreat from immediate contracts and arrange framework contracts (often called umbrella
agreements) to balance the need for certainty with the wish to remain sufficiently flexible (Mouzas and
Ford, 2006). A framework contract between two companies is not concerned with contractual decisions.
Instead it articulates a domain consensus by specifying the scope of business; defines the basic rules
and principles that govern an interdependent symbiosis between the parties and expresses the inherent
goal incompatibility between parties by mapping the parties’ relevant interests as well as their business
assumptions. This research provides empirical evidence of three intriguing findings: a) framework contracts
are made in established and continuing relationships and not in new untested relationships b)
framework contracts are more important for the stronger party in asymmetric relationships and c)
framework contracts do not mirror contractual decisions but provide a framework in which contractual
decisions are made. The study discusses these findings and draws conclusions on the role of contracts
and more widely on the nature of interdependence itself.

Keywords: Contracting, Relationships, Interdependences, Asymmetries