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Review Versio IMPACT OF DISRUPTIONS ON COLLABORATIVE BUSINESS MODELS AND INTERORGANIZATIONAL NETWORKS IN SUPPLY MANAGEMENT – LONGITUDINAL CONTEXTUAL ANALYSIS OF THE BUSINESS NETWORKS OF TWO FOCAL COMPANIES Hannu Vahtera Sarja/Series A-8:2015 Turun kauppakorkeakoulu Turku School of Economics Custos: Professor Jukka Heikkilä Turku School of Economics Supervisors: Professor Jukka Heikkilä Turku School of Economics Professor Tomi Dahlberg Åbo Akademi University Pre-examiners: Professor Arto Rajala University of Vaasa Professor, Emeritus Ari Heiskanen University of Oulu Opponent: Professor Arto Rajala University of Vaasa Copyright Hannu Vahtera & Turku School of Economics The originality of this thesis has been checked in accordance with the University of Turku quality assurance system using the Turnitin OriginalityCheck service. ISBN 978-952-249-441-2 (print) 978-952-249-442-9 (PDF) ISSN 0357-4652 (print) 1459-4870 (PDF) Publications of Turku School of Economics, Series A Suomen yliopistopaino Oy – Juvenes Print, Turku 2015 "It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change." Charles Darwin ABSTRACT A combination of the following two observations lead to this dissertation being written. Firstly, companies that lead their industry often, over time, seem to lose some of their emblematic capability to exploit disruptions or cope with disruptive events caused by other companies. Secondly, academic as well as professional literature is filled with studies and commentaries on dynamic technology enabled network capabilities that companies can use in order to exploit rapidly arising business opportunities. The factual evidence on companies knowingly engaging in and profiting from such virtual value creation systems is, however, far more scarce. These two observations highlight the need for more information on the contributing factors affecting a company’s internal as well as external abilities to collaborate and execute required transformations and adjustments, so that it is able to exploit opportunities. Therefore, the intended contribution of this thesis is to add to the knowledge on the impact of disruptions on collaborative business models and inter-organizational networks. From its philosophical standpoint this thesis is interpretive. The research ap- proach of the study is a longitudinal contextualist analysis deriving data from multiple sources. The case research method is used for the construction and anal- ysis of its empirical part. And a reflective practitioner approach is used as the methodological backbone for utilizing the applicative knowledge as a source of complementary value to the theory and for the validation of the research findings. Sources of theoretical knowledge that are most relevant for the purposes of this study may be classified into three distinct research domains: 1) collaborative business networks, 2), disruptive innovation and collaborative business models, and 3) focal company strategy. The analysis of the collaborative business net- works highlights the different types of collaborative objectives that companies require for different types of network structures and capabilities. The chosen network typology and the role of individual economic actors within the collabo- ration are furthermore demonstrated to have significance for the coordination, management and performance of a collaborative network, and are thus identified as important elements to be acknowledged in the design, strategizing, and im- plementation of a collaborative business model. Study on disruptive innovation and collaborative business models investigates the type, nature and effect of disruptive innovation – as an embodiment of change – in driving and enabling changes in the collaborative business models of companies in a collaborative network. The analysis demonstrates the ability of companies to successfully manage and exploit innovation in collaboration with other companies as having a strong dependence on the collaborative business model design, network typology, and the longer-term operational sustainability and relevance of the collaborative network. Analysis on the focal company strategy discusses the multiple meanings and comprehension of the concept and its significance for the sustainability and suc- cess of the companies individually, and as part of a collaborative network. The result of the analysis is that the dynamic nature of strategy is discovered to be often unplanned and susceptible to disruptions, which demonstrates a need for careful planning, strategizing, implementation and management by all the part- ners in a network. Furthermore, this needs to take place on all the levels of a col- laborative network to ensure that the necessary strategic flexibility and opera- tional sustainability can be achieved. The theoretical contributions of this study include further illustration on the usability and value of longitudinal contextual analysis in describing change in its organizational and social context. In addition, the concept of technology frames and the process of framing are demonstrated to yield value for the design, im- plementation, and evaluation of inter-organizational collaboration. The findings of the thesis present the, so called, network phenomena as a holistic change pro- cess that impacts on the individual and collaborative strategies of companies and their business models. For its practical contribution, this study provides an empir- ical comparison of the two distinct approaches that the investigated focal compa- nies adopted for the establishment of their networked collaboration. It further- more introduces a classification of the disruptions that have an effect on the in- vestigated focal companies’ business models and their inter-organizational sup- ply networks. The results of the longitudinal contextual analysis signify the col- laborative business model design, the network structure, and the nature of the collaboration to influence the capability and willingness of a company to partici- pate in business model transformation- and for these to play a role in the success and sustainability of the networked collaboration. Keywords: Disruptions, discontinuities, disruptive innovation, business models, collaborative business networks, focal company strategy TIIVISTELMÄ Disruptioiden vaikutus yhteistoiminnallisiin liiketoimintamalleihin ja yritystenvälisiin tarjontaketjuihin – kahden napayrityksen liiketoimintaverkoston kontekstuaalinen pitkittäistutkimus Seuraavat kaksi havaintoa johtivat tämän väitöskirjan kirjoittamiseen: Monissa tapauksissa teollisuudenalojen johtoyritykset näyttävät ajan kuluessa menettävän ainakin osan leimallisesta kyvystään luoda, hyödyntää sekä mukautua disruptioihin. Toiseksi, huolimatta laaja-alaisesta akateemisesta tutkimuksesta ja moninaisista ammattikirjallisuudessa esitetyistä puheenvuoroista, käytännön esimerkit tilanteeseen räätälöityjen, dynaamisten, teknologiatuettujen verkostojen käytöstä uusien, usein nopeasti ilmaantuvien, liiketoimintamahdollisuuksien hyödyntämiseksi ovat harvemmassa. Johtopäätöksenä näistä havainnoista onkin se, että lisätietoa tarvitaan niistä asioista, jotka myötävaikuttavat näihin yritysten sisäisiin ja ulkoisiin kyvykkyyksiin mukautua yhteistoiminnallisten liiketoimintamallien edellyttämällä tavalla ennalta asetettujen tavoitteiden saavuttamiseksi. Tämän työn tarkoituksena on näin ollen lisätä tietoa disruptioiden vaikutuksista yhteistoiminnallisiin liiketoimintamalleihin sekä yritystenvälisiin verkostoihin. Tieteenfilosofisesta näkökulmasta tarkastellen tutkimuksen viitekehys soveltaa tulkitsevaa lähestymistapaa. Menetelmällisesti tutkimusta voidaan parhaiten luonnehtia sisällölliseksi pitkittäistutkimukseksi. Asetettuihin tutkimuskysymyksiin vastatessa työssä hyödynnetään useita eri tietolähteitä. Empiirisen tiedon osalta väitöstutkimuksessa sovelletaan tapaustutkimuksen menetelmiä. Käytännön työkokemuksesta syntyneen ammatillisen osaamisen ja näkemyksen hyödyntämiseksi sovelletaan lisäksi ns. ’reflektiivisen ammattilaisen’ (eng. reflective practitioner) lähestymistapaa teoriatiedon täydentäjänä sekä tutkimustulosten vahvistamisessa. Tutkimuksen kannalta oleellisimmat, vaikkakin osin päällekkäiset, teoreettiset tiedonlähteet voidaan luokitella kuuluvan seuraaviin kolmeen tutkimusalueeseen: 1) yhteistoiminnalliset liiketoimintaverkostot, 2) disruptiiviset innovaatiot ja yhteistoiminnalliset liiketoimintamallit sekä 3) liiketoimintaverkostoja johtavien yritysten strategia. Yhteistoiminnallisten liiketoimintaverkostojen osalta työssä arvioidaan yritystenväliselle yhteistoiminnalle asetettuja vaatimuksia muun muassa tavoitteiden ja kyvykkyyksien näkökulmasta. Tutkimuksessa havainnollistetaan eri yhteistoimintaa varten rakennettujen yritysmuodostelmien vaativan erilaisia rakenteita sekä kyvykkyyksiä riippuen niille asetetuista tavoitteista. Valitun verkostotypologian ja yksittäisen osallistujan rooli, itsenäisenä taloudellisena toimijana, nousee esiin merkittävänä tekijänä yritysmuodostelman sisäise yhteistyön sekä tehokkuuden kannalta. Disruptiivisten muutoksien ja epäjatkuvuustekijöiden vaikutusta yhteistoiminnallisiin liiketoimintamalleihin analysoidaan erityisesti disruptiivisen innovaation näkökulmasta. Analyysin ulostulemana korostuu yhteistyötä määrittelevän liiketoimintamallin, liiketoimintaverkoston typologian, yhteistyötä harjoittavien eri toimijoiden välisten keskinäisten riippuvaisuussuhteiden sekä yhteistyön pysyvyyden osaltaan vaikuttavan yritysten kykyyn yhdessä tuottaa,
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