This study investigates the tenability of the position that business networks are relatively stable, based on long-lasting inter-firm relationships with limited substitutions of incumbent actors. This is done via a longitudinal analysis on the actor composition evolution with regard to the supplier networks around two car assembly plants. Based on the overall empirical findings, the study concludes that the phenomenon of supplier substitution may be a more widespread reality. Consequently, the article finishes with a series of business implications and recommendations on how to investigate and conceive this matter more thoroughly.
Although network theory is less wedded to stability than neoclassical economic theories are (Johanson & Mattson, 1991), network theorists perceive and conceive evolutions in actor composition of business networks as relatively stable, based on long-lasting inter-firm relationships (Forsgren, 1989, Forsgren et al., 1995, Håkansson & Shehota, 1995, Johanson & Vahlne, 1990 and Rugman & D'Cruz, 2000). Several scholars have conceptually questioned the viewpoint of assuming stability to be a basic structural feature of networks (Easton et al., 1997 and Halinen et al., 1999). However, empirical proof of substantial turnover of actor involvement in business networks is scarce, with Hertz (1993) being an interesting exception to this rule.
In this paper, we want to explore the tenability of this stability thesis.
The empirical material for this explorative research comes from two “one buyer-multiple suppliers” networks operating in the automotive industry. The automotive industry can be considered as a relevant setting for the analysis of business networks, as it is a prominent example of a sector where one encounters inter-firm networks on a large scale (Castells, 1996, Dyer, 1996 and Fine & Whitney, 1996). Therefore, and also to put our own primary research into an adequate perspective, after a review of relevant conceptual literature on actor changes in business networks in general, we discuss empirical literature on composition logics in automotive business networks.
Afterwards, we present the methods and materials applied to the two automotive cases of buyer–supplier networks in question. With regard to both networks, we assess the supplier changes that occur over a period of +/− 10 years, based on evolutions in the respective networks in terms of the subsequent suppliers that are responsible for the delivery of a sample of automotive components.
The applied assessment methods for exploring actor composition stability are both of a quantitative and qualitative nature. The choice for this triangulation of methods was made to be able to provide sufficient nuances to the outcomes of either kind of analytical tools.
The empirical findings demonstrate that one case indeed shows a rather high degree of instability, whereas the other one does less so. Based on the overall research findings, the article concludes that the phenomenon of supplier substitution may be a more widespread empirical reality. Based on that outcome, the paper ends by highlighting a set of research and business implications.
