Technological changes and business network dynamics: A longitudinal perspective from the optical recording media industry

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Abstract

In the past thirty years, the IMP Group’s Interaction and Network Approach has gained its increasing popularity in researching economic behaviours among resource-dependent business actors through relational linkages (Håkansson et al., 2004; Turnbull et al., 1996). Within network research, understanding the dynamics in business networks, in which interfirm relationships are regarded as crucial constituents, has been of particular interest (Johnston et al., 2006; Möller and Halinen, 1999). Moreover, technology has been identified as an important component driving the evolution of a business network, where technological change may bring about positive and negative effects on the relationships embedded in this network, and consequently, results in network dynamics (Afuah, 2000; Christensen, 1997; Håkansson and Waluszewski, 2002b; Lundgren, 1995). A perspective of resource interaction (e.g. Håkansson et al., 2009) suggests that technological change needs to be treated as a process rather than a critical event. However the nature of this process as well as how it impacts on the configuration of a technology-based business net and on dynamics of relationships constituting this net remains under-examined.Based on qualitative research methods, a longitudinal single-case study is chosen to conduct an empirical investigation in the optical recording media industry, in order to address the above research problems. To facilitate the data collection, a focal net perspective and an input-process-output model are employed. The focal net under study is characterised as a value-creating and technology-bundled business net. A total of 72 interviews were carried out in three stages and with the focal actor, its customers, suppliers and a complementor. The empirical data allows the research to reconstruct the evolution of the focal business net, which covers a time-span of more than 10 years from 1998 to 2008, and in which major technological change has taken place three times, from CD-R to DVD-/+R, DVD Double Layer and HD/Blu-ray technologies. In the development of the optical recording technology, the focal net has experienced four net reconfigurations in which radical changes of relationships as well as disturbance in resource interaction are observed. Based on the case study result, empirical observations are offered and new insights into the process of the arrival of technological change and net reconfiguration and relationship dynamics affected by this technological arrival are developed. Moreover, theoretical contribution, managerial implications, limitations and future research directions are provided.

Keyword(s)

Business relationship; Network dynamics; Network position; Technological change

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