Networks as learning organisations

Citation

Peters, L.D. and Pressey, A.D. (2010), "Networks as learning organisations", Journal of Business & Industrial Marketing, Vol. 25 No. 6. https://doi.org/10.1108/jbim.2010.08025faa.001

Networks as learning organisations

Article Type: Guest editorial From: Journal of Business & Industrial Marketing, Volume 25, Issue 6

The topic of learning in business networks is a relatively new yet important area of business research. It draws upon two of the most fundamental assets in value creation – i.e. knowledge and relationships (Ford and Hakansson, 2006). These concepts are clearly not mutually exclusive. Companies engage in value creation activities not only through making their offerings more intelligent but by making their customers and suppliers more intelligent as well (Thirkell, 1997). Put differently, the most effective networks will also be the most intelligent in creating value through their underlying systems and activities (Möller and Rajala, 2007). New initiatives, such as CRM 2.0, seek to understand the influence of such “intelligent” customers and suppliers on organisational learning. The useful knowledge created in such networks might be via formal processes or through informal situations and fortunate circumstance. In whatever form and manner knowledge is created, if it is transient in nature then this represents a lost learning opportunity. This, then, raises a rather obvious but relatively under-examined question: how do networks create, learn from, and retain ‘useful’ knowledge (Johnston et al., 2006)?

Evidence points to companies such as Honda who have increased their consumer products market share in North America partly as a result of their approach to supplier relations. These organisations strive to understand their suppliers’ operations and cultures in order to better support and develop their capabilities as well as learn themselves (Liker and Choi, 2004). Similarly, 3M describes itself in terms of a “culture of innovation” reflected in its emphasis on human creativity and learning capabilities (Hatch and Schultz, 2000). In sum, organisations and networks that emphasise continuous learning and improvement opportunities stand to generate useful knowledge in the areas of improved production processes, new market opportunities, competitor threats, scarce sources of supply, and innovation among many other key competitive drivers.

Developing inter-firm relationships and the coordination of activities among network members raises questions regarding network partner choice, learning capabilities, and realisable and desirable performance outcomes. This is reflected in the concerns of Hunt and Lambe (2000, p. 14), who ask: “under what circumstances will firms developing relationships with such entities as suppliers, competitors, employees and customers be likely to lead to enhanced [financial] performance?”.

In our original call for papers, we proposed that the answers to such questions may be found, at least in part, in:

• •

  the nature and purpose of the interactions which take place between network partners; and

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  the collective learning capabilities which may result from such interactions.

These views raise questions about networks and the manner in which they learn:

1. 1.

   How do networks learn and how do they learn to learn?

2. 2.

   What aspects of collaborative activity enhance learning in networks?

3. 3.

   What activities stimulate incremental knowledge and learning?

4. 4.

   How might different levels of network analysis (individual, group, firm, and industry) aid our understanding of the learning process?

5. 5.

   What are the social processes of knowledge production?

6. 6.

   How and when does learning in networks lead to innovation?

7. 7.

   To what extent would the level of knowledge codification in a network and the ability to access and share knowledge between network partners affect the learning capabilities and outcomes in networks?

8. 8.

   How do firms learn from the capabilities of network partners?

9. 9.

   How might new initiatives, such as CRM 2.0, redefine organisational learning in business to consumer markets?

The papers selected for inclusion in this Special Issue give us a number of insightful contributions, both academic and practitioner, to these questions. We start with two invited papers, one practitioner and one academic. We then present five peer-reviewed contributions in our Special Issue.

These first two invited papers deal in particular with the impact of technology on networks and learning. Our first paper, entitled “The impact of CRM 2.0 on customer insight”, is by practitioner Paul Greenberg, author of the bestselling book CRM at the Speed of Light; Essential Customer Strategies for the 21st Century, President of consultancy firm The 56 Group, and founding partner of the CRM training company BPT Partners. His paper looks at what CRM 2.0 is and how it impacts customer insights. It shows how CRM 2.0’s incorporation of social tools and strategies with traditional operational functions meets the demands of 21st century “social” customers. He asserts that the new breed of customer requires corporate transparency, authenticity and interaction. To affect this intelligent, aggressive social consumer, richer insight than that of the past is necessary. CRM and social tools use combined provides the capability for this insight. In conclusion, he maintains that any company that understands that their customers are demanding something more and different will adopt CRM 2.0 strategies to gain greater insight into their customers and to support creation of mutual value.

Our second invited paper, entitled “Organizational network legitimacy and their impact on knowledge networks: The case of China’s TD-SCDMA mobility technology”, is by academics Brian Low (University of Western Sydney, Australia) and Wesley J. Johnston (University of Georgia, USA). Prior to academia, Dr Low spent some 16 years in the automotive, information technology and telecommunication sectors, in various marketing and research positions. He has also consulted for a range of American, European and Chinese companies on marketing and internationalising strategies and regulatory policies in the telecommunication sector in the Asia Pacific region. Professor Wesley J. Johnston is the CBIM RoundTable Professor of Marketing and Director of the Center for Business and Industrial Marketing in the Robinson College of Business at the Georgia State University. Their paper examines why and how organisational network legitimacy facilitates firm’s access to knowledge and reciprocal knowledge exchange between stakeholders. They propose that because subsidiaries of multinationals operating in China are more inclined to pursue organisational network legitimacy initiatives they have stronger proactive and collaborative aspirations towards exploiting emerging technological opportunities in the external environment and developing technological capabilities. In conclusion, they assert that internalising efforts driven only by market and/or technology legitimacy falls short of realising organisational network legitimacy goals, but must also include cognitive understanding of the net sum of relational, investment and social legitimacies. These elements are cognitively as binding as well as benefiting to subsidiaries of multinationals in accessing knowledge networks.

The remainder of our Special Issue is devoted to five peer-reviewed papers. Each of these papers highlights a unique and interesting aspect of learning in networks. The first three look specifically at the notion of networks as learning organisations, and address issues related to why and how networks learn. The final two papers each address specific environmental factors which may drive learning processes in networks, that of technological change and of internationalisation.

Our first peer-reviewed paper is by Linda D. Peters, Wesley J. Johnston, Andrew D. Pressey and Terry Kendrick, and is entitled “Collaboration and collective learning: networks as learning organisations”. It examines why network partners may decide to collaborate in order to learn. They argue that in many instances firms collaborate to become part of a knowledge network – to learn about their industry and collectively use their knowledge to serve their own customers more effectively in a competitive environment. They state that it is necessary to expand traditional approaches in understanding networks to include the nature and purpose of the interactions between the firms, as well as the structural features of the network and the development of shared meaning and consensus among the network participants. Their conceptual paper is illustrated by examples from the automotive industry, and they demonstrate that there is a need to take a broader view of learning and collaboration in networks, and that for many industries the basis of future competition will be collaborative learning communities versus collaborative learning communities rather than OEM versus OEM in competing for resources and market share.

Our second paper is by Gareth Veal and Stefanos Mouzas entitled “Learning to collaborate: a study of business networks”. Their paper gives empirical examples of the processes whereby networks learn to collaborate. Specifically they examine efforts to learn to collaborate in response to the challenge of climate change. They contend that existing research on collaboration over environmental issues highlights the prevalence of cognitive deficiencies, an abundance of conflicts and disputes and the ignorance of exchange opportunities among interdependent actors. Based on a theoretical review and an empirical case study, they put forward a framework that involves three stages in learning to collaborate:

1. 1.

   framing the problem;

2. 2.

   negotiating; and

3. 3.

   achieving wise trades.

Our third paper is by Mika Westerlund and Risto Rajala, and is entitled “Learning and innovation in inter-organizational network collaboration”. This study examines the relationship between a firm’s learning orientation and network collaboration, and aims to investigate how learning orientation and co-innovation enhance network collaboration. Their analysis shows that learning drives a firm’s co-innovation focus in terms of product and process co-innovation. In particular, an explorative learning orientation is found to foster a firm’s network collaboration through product co-innovation, while an exploitative learning orientation promotes process innovations but discourages networking.

Our fourth paper is by Hsin-hui Chou and Judy Zolkiewski, and is entitled “The arrival of technological changes at the business net: a learning process”. Their paper explores the arrival of technological change and how this learning process impacts network evolution. Interestingly, they use a longitudinal, case-based qualitative research approach to illustrate the network dynamics underpinning two technological generations. They find that the arrival of technological change is not only a pivotal event concerning a firm’s long-term competitiveness but challenges the firm’s ability to manage its portfolio of relationships and balance its position in the evolution of business nets. Their findings illustrate the value of analysing technological change from a network perspective. They illustrate the complexity of the process and show that despite cooperation and collaboration, relationships are constrained and/or enabled by organizational learning. They conclude that relationships are determined by a plethora of issues such as strategic fit, functional fit and time fit.

Our final paper is by Yen-Tsung Huang, and is entitled “Learning from cooperative inter-organisational relationships: the case of international joint venture”. Huang maintains that facing increasing global competition, firms must ceaselessly acquire new knowledge and enhance their capabilities in response to rapidly changing customer requirements. Amidst the varying collaborative relationships that occur between firms, it is particularly important for firms to learn from international joint ventures. This study is rooted in the organisational learning perspective, and investigated the learning intent, learning process and learning outcomes of host parent companies taking part in international joint ventures. The empirical results show that a parent company’s learning outcome is affected by the interaction between the parent company and the joint venture, as well as the internal knowledge integration capacity of the parent company. The interaction between the parent company and the joint venture will simultaneously drive the parent’s intra-organisational knowledge integration. Moreover, the parent company’s strategic intent to learn from the joint venture will affect the their knowledge integration along with the interaction between the parent company and the joint venture. Likewise, the parent company’s learning intent will affect its evaluation of the joint venture’s knowledge while further influencing its intra-organisational knowledge integration.

Finally, we would like to thank the many reviewers who gave generously of the their time and expertise. Their many insights and suggestions have improved the quality of the submissions to this Special Issue, and as the unsung heroes of academic research and publication, we wish to recognise their achievement and to thank them for their efforts. Without them this Special Issue would not have been possible.

Reviewers

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  Stuart Barnes, Norwich Business School, University of East Anglia;

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  Laure Cabantous, Nottingham University Business School;

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  Hing-Kai Chan, Norwich Business School, University of East Anglia;

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  Steve Evans, Cranfield Univerity;

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  Keith Fletcher, Norwich Business School, University of East Anglia;

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  Jules Gassenheimer, Rollins College, Winter Park, FL;

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  Hong-wei He, Warwick University Business School;

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  Stephan Henneberg, Manchester Business School;

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  Gillian Hopkinson, Lancaster University Management School;

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  Terry Kendrick, Norwich Business School, University of East Anglia;

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  Fiona Lettice, Norwich Business School, University of East Anglia;

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  Stefanos Mouzas, Lancaster University Management School;

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  Peter Naudé, Manchester Business School;

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  Annmarie Ryan, Lancaster University Management School;

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  Laura Salciuviene, Lancaster University Management School;

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  Simona Spedale-Latimer, Nottingham University Business School;

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  Ken Starky, Nottingham University Business School;

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  Vicky Story, Nottingham University Business School;

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  Paul Trott, Portsmouth Business School, University of Portsmouth;

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  Markus Vanharanta, Lancaster University Management School;

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  Heidi Winklhofer, Nottingham University Business School; and

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  Judith Zolkiewski, Manchester Business School.

Linda D. PetersNottingham University Business School, Nottingham, UK

Andrew D. PresseyLancaster University Management School, Lancaster, UK