Authors: Louise Young; Nigel Bairstow
Abstract:
This paper investigates the value delivered by an events-based methodology for
understanding of how business networks and their performance equilibrate and change over
time. Particular attention is given to forms of analysis that systematically map processes of
change in business markets and the insights emerging from these (Reisman 1993).
A focus on events and processes leads to a different approach to explanation that is more
relevant for understanding dynamics and change. Processes are the “flow” of relationships in
which events occur however commonly-used approaches to network study are not
particularly effective at identifying them. Field studies in the natural sciences and historical
research are much more concerned with processes as they try to understand how things work
or what led to a particular outcome. Common to these approaches is that they are concerned
with synthesis, i.e. identifying patterns of behaviour or outcomes that lead to allow the
replication of observed phenomena (Rong and Wilkinson 2011).
There has been a small amount of theoretical and empirical research that has focused on the
dynamics and evolution of marketing and business systems (Wilkinson 2001). This includes
(1)Stage models where a pre-specified sequence of stages is assumed and used to analyse the
processes involved in relation and network development (Ford 1980, Dwyer et al 1987), (2)
Descriptive characterisations of relationship and network histories e.g. case studies that
sometimes highlight some of the processes going on (e.g. De Rond and Bouchikhi 2004,), (3)
Theories and schematic models that depict process and suggest that feedback effects drive the
changes within relations and network, (e.g. Wilkinson 1990, Narayandas and Rangan 2004,
Bairstow and Young, forthcoming). (4) Speculations as to the patterns of change and
evolution emerging from descriptions of relations and networks (e.g. Johanson and
Hakansson 1993), (5) Description and analysis of some mechanisms and processes involved
in the dynamics and evolution of business relations and networks (e.g. Halinen 1998, Haase
and Kleinaltenkamp 2011, Wilkinson and Young 1997, 2001). In addition, work dealing
with channel evolution in terms balance and equilibration is relevant. “By balanced state (or
situation) is meant a harmonious state, one in which the entities comprising the situation and
the feelings about them fit together without stress” (Heider 1958, 180). Equilibration is the
ways that entities move or attempt to move back to balance (Young and Johnston 1997)
Our investigations of the evolution of networks, equilibration and their processes are (in line
with some of the above authors) embedded in a framework of Complexity Theory. Networks
are complex adaptive systems (CAS) in that they are active and creative have bottom-up, self
organising properties (order emerges as a result of the processes of micro actions and
interactions taking place among connected actors rather than as a result of central direction
and innate tendencies), irreversible order (Prigogine,1997) and subject-object differentiation:
(where small events can have large impact) and are sensitive to starting conditions. This
approach is also in line with our own in that it recognises the centrality of events in
understanding evolution.
In line with this, the focus of research reported here is on process and events. For the
purposes of this research, “events” are defined as important markers in the evolution of
channels of distribution. As a method particularly suited to research processes, narrative
event analysis was the primary analysis method. Narrative event analysis involves stories
and the systematic investigation of chains of events and/or actions that lead to a conclusion
(Abell 1987, Anderson 2003). This enables consideration of important explanations emerging
from considering the timing, ordering and interaction of events – akin to ‘moving pictures’ of
networks as they evolve (Ford, Gadde & Håkansson 2006).
The use and value of narrative event analysis is illustrated via a study of the Australian IT
channel’s evolution. Multiple data sources were used with nearly 90% of the data coming
the archives of the main IT trade journals (Computer Reseller News and Australian Reseller
News) and industry reports from 1986 to 2007. A total 605 journal articles were coded in
terms of the kind of events they contained. The archival data was augmented by the insights
of eight industry experts who had substantial industry and channel experience (minimum of
20 years) and multiple perspectives of channel issues (specifically that they had worked for a
substantial period for one or more IT vendors and one or more IT distributors). The
interviews were used to verify the nature and importance of key events and to identify any
further the key events overlooked by the trade journals.
The paper presents several process-based maps of the channel’s evolution and describes the
way these provide insights. Mapping of events enable identification four phase changes, i.e.
where a critical event changed the character of the industry, including substantial changes to
the way the channel functioned. Comparing these phases provides a valuable overview.
Examination of these patterns assisted in the identification of the probable critical incidents
that precipitated imbalance (Chell 2004, 1998) and thus indentified where to commence
searching for the equilibration processes that are the focus of this research. A process of
ongoing equilibration where this channels sought to create a new form of balance after radical
change was identified.
Keywords: networks, evolution, equilibrate, process, methodology, narrative, events,
mapping
Journal: ( – )
Web Address:
Publish Year:
Conference: Glasgow, Scotland (2011)