In the context of the transition to market economy as a way to accommodate new ways of managing supply, the paper analyses the chain of activities performed in four supplier relationships in the wood-processing industry in Russia. In contrast to what might be expected, the chains of activities in the cases demonstrate different orders of activities, implying that firms tend to organise their chains differently, depending on the character of the relationship. Moreover, the four cases also indicate that activities usually performed by the supplier in Western market economies are still carried out by the customer in Russia. It also seems that the interfaces in the chains are seldom characterised by mutually adapted activities and that the few mutual adaptations observed are to be found at the customer level. Consequently, the activity link between the supplier and the customer tends to be weak; payment and quality control are the only activities that have been adapted to the relationship as such. The paper concludes with a discussion of three strategies for supply management in transition economies.
Securing supply was perceived by Soviet managers as the biggest problem during the planned economy (Berliner, 1957). The shortage economy meant that establishing and maintaining control over supply was essential for Soviet firms. Despite the fact that the planned economy was replaced by an embryonic market economy (Eliasson, 1998; Fischer and Gelb, 1991; Peng and Heath, 1996), shortage of materials and supply management are still major constraints for Russian firms (Blanchard and Kremer, 1997; Buck et al., 1998; Filatotchev et al., 1996; Gurkov, 1996; McCarthy and Puffer, 1995; Shama, 1992), but so far there is limited knowledge about how firms manage their supply in the transition economy. Johanson (2004), Peng and Heath (1996) and Salmi (1996) argue that the firms should shift from an intra-organisational to an inter-organisational strategy. Consequently, a relationship perspective seems appropriate for the purpose of this paper, as it supports how Russian firms, 5 years after the so-called transition was introduced, perform activities in relationships with their suppliers.
The literature on inter-organisational relationships has evolved as one of the major research streams in supply management over the past few years. Partnership (Johnson and Lawrence, 1988), outsourcing (Mullin, 1996; Venkatesan, 1992), and supply chain relationships (Christopher and Jüttner, 2000) are some of the research traditions that focus on the relationship between customer and supplier in a supply perspective. This paper draws on the research tradition, initiated by the Industrial Marketing and Purchasing (IMP) group (Ford, 1997; Håkansson, 1982), and on the studies within that tradition, which have their focus on the interaction and organisation of the activities in supplier relationships (Araujo et al., 1999; Gadde and Håkansson, 1993; Gadde and Snehota, 2000). Common to these studies is their treatment of the activities the firms perform by using either the relationship or the network as the unit of analysis.
Three critical issues follow from this point of departure:
(1)
How is the chain of activity in the relationship constructed, that is, what is the order of the activities in the relationship?
(2)
Who is doing what? In other words, is the customer or the supplier performing the activity?
(3)
How are the interfaces built between the activities in the chain?
The paper is organised as follows. The first section discusses supply management in the planned economy and attempts to argue that a specific activity structure evolved as a result of plan governance. The next section defines the activity concept, and then presents the organisation of activities in supplier relationships in the transition economy. The method section follows. Four case studies are then presented and analysed in two steps, first giving the background to the relationships and secondly presenting a cross-case analysis. The paper ends with a discussion on the theoretical contribution to the development of the activity concept and how firms can manage activity chains in Russia.
