Business Marketing and Purchasing
This group has strong international links with the IMP research community, a world-leading business marketing and purchasing group of scholars who investigate markets as networks of business relationships; and can claim to be the leading UK group working in this area.
The members of staff within this research group are involved in the IMP group's research programme, and can claim to be the leading UK university working in this specific area. In addition, the group has strong links with other colleagues in LUMS and the university, namely Dr Martin Spring in Management Science.
The IMP view of business marketing and purchasing is based upon a behavioural theory of decision making and a resource dependence perspective. The antecedents of this approach lie in studies of interaction and relationships in business markets, in distribution channels research and in theories of the internationalisation of the firm. However, there are also more distant sources of inspiration for the work that has been carried out under this banner.
- Edith Penrose's "A Theory of the Growth of the Firm" See also the essays in "The Growth of the Firm: The Legacy of Edith Penrose" edited by Christos Pitelis.
- Cyert and March's "A Behavioral Theory of the Firm" as well as George B. Richardson's seminal article "The Organisation of Industry" (Economic Journal, Vol. 82, 1972, pp. 883-896) are important landmarks in the development of this research tradition. Ian Macneil's studies of relational contracting (see e.g. The New Social Contract: An Inquiry into Modern Contractual Relations, New Haven, CT., Yale University Press, 1980) was also an important inspiration for this approach.
The IMP Group and the interaction approach
The most direct predecessor of the networks approach to business markets is the interaction approach developed by the IMP Group. The IMP Group was formed in the middle 1970s by researchers originating from the Universities of Uppsala, Bath, UMIST, ESC Lyon and the Ludwig Maximilians University (Munich). The group developed a dynamic model of buyer-supplier relationships in business markets (the interaction model) and illustrated its applicability through comparative studies of buyer-supplier relationships within and across a number of European countries (France, Germany, Italy, Sweden, UK).
The main conclusion of these pan-European studies was that buying and selling in industrial markets could not be understood as a series of disembedded and serially independent transactions. Instead, transactions could only be examined as episodes in often long-standing and complex relationships between buyers and sellers. These relationships seemed to be fairly stable when studied over long periods of time, but turned out to very dynamic when examined at closer quarters. The results of these studies were published in two books that are still widely used and cited.
- International Marketing and Purchasing of Industrial Goods: An Interaction Approach. By the IMP Group, edited by Håkan Håkansson. Chichester, John Wiley, 1982 (the contents of this book can be downloaded from the IMP website)
- Strategies for International Industrial Marketing: The management of customer relationships in European industrial markets. Edited by Peter W. Turnbull and Jean-Paul Valla. London, Croom Helm, 1986
The IMP Group is now embedded in a wider community of researchers concerned with business marketing and purchasing. Since 1984 the Group has organised an annual conference that has become an important meeting place for all researchers sharing an interest in interorganisational relationships and networks. Conference papers from 1999 onwards are available on-line at the IMP Group's website. A selected sample of papers from various conferences have been published in book form and in special issues of journals, namely Industrial Marketing Management and the Journal of Business Research.
The network approach to markets
In the middle 1980s researchers at Uppsala and Stockholm began to explore the implications of strong and stable relationships for the structure of business markets. If markets were traditionally conceived as atomistic and frictionless, the findings of the early IMP studies resulted in a fundamental rethinking of the nature of markets. The "markets-as-networks" approach came to view business markets as networks of interfirm relationships. A network is thus a web of relationships where one actor is connected directly and indirectly to other actors through exchange relationships. These relationships may vary from weak to strong, depending on the connections between resources, the complementarity of activity structures and the bonds established between individual actors. Complex and strong relationships imply a degree of connectedness of relationships – a change in one of these relationships may have widespread repercussions on other relationships.
These views contrast sharply with other views on business relationships, namely those that regard relationships as formal cooperative agreements for competitive advantage (e.g. joint ventures). The network approach shares some concerns with transaction cost economics (e.g. what accounts for the existence of different governance structures) but rejects the static, comparative framework of this approach as well as its reliance on unbridled opportunism as a hard-wired feature of human nature. And, whereas the network approach takes into account the social embeddedness of business relationships, it does not regard business relationships as quintessentially social or primarily explained by trust and commitment as in more recent relationship marketing approaches. Instead, it stresses the importance of business relationships as a coordination mechanism on a par with markets and hierarchies, and their role in promoting learning and innovation in business markets. In this sense, the network approach retains a strong Penrosian flavour about the nature of firms whilst capitalising on Richardson's seminal insights about cooperation as a coordination mechanism in business markets.
The two most widely cited publications in industrial networks are:
- Axelsson, B. and Easton, G. (1992), (eds.), Industrial Networks: A New View of Reality, Routledge, London
- Håkansson, H. and Snehota, I. (1995), Developing Business Relationships, Routledge, London (the contents of this book can be downloaded from the IMP website)
Three other books focusing on a network approach to technological development made landmark contributions:
- Håkansson, H. (1987) (ed.), Industrial Technological Development: A Network Approach, Croom-Helm, London
- Håkansson, H. (1989), Corporate Technological Behavior: Co-operation and Networks, Routledge, London
- Lundgren, A. (1994), Technological Innovation and Network Evolution, Routledge, London
A useful compilation of key articles can be found in:
Understanding Business Marketing and Purchasing
David Ford (ed)
Thomson Learning (3d edition), 2002
The Business Marketing Course. Managing in Complex Networks
For recent textbooks using an IMP perspective see:
David Ford, Lars-Erik Gadde, Håkan Håkansson and Ivan Snehota
John Wiley, 2006 (2nd edition)
Managing Business Relationships
David Ford, Lars-Erik Gadde, Håkan Håkansson, Ivan Snehota
John Wiley, 2011 (3d edition)
Supply Network Strategies
Lars-Erik Gadde and Håkan Håkansson, and Goran Persson, John Wiley, 2010 (2nd edition).
Rethinking Marketing. Towards a New Understanding of Markets
edited by Håkan Håkansson, Debbie Harrison and Alexandra Waluszewski
John Wiley, 2004
Business Marketing Management. Understanding, Creating, and Delivering Value
James C. Anderson, James A. Narus and Das Narayandas
Prentice-Hall, 2009 (3d edition)