Research concerned with business relationships and organizational levels, respectively, has addressed companies' difficulties in realizing their strategies. Studies of business relationships explain this through actions and reactions among business partners. Organizational studies note gaps between strategic and operational organizational levels in perceptions and goals. This paper combines these perspectives to obtain new insights into why company strategies may not materialize. The purpose of this paper is to describe and discuss how actor bonds on various organizational levels in business relationships affect strategy realization. The paper shows that actors on similar organizational levels representing different companies may actually share more understandings and activities than actors within the same company. The paper contributes to research on dyadic business relationships by highlighting differences in perspectives on various organizational levels, adds insights into research studying organizations by including a business-relationship aspect, and increases understanding of why strategic plans sometimes fail to succeed.
The difficulties of realizing strategies have been acknowledged in research on interorganizational business relationships (Gadde et al., 2003 and Håkansson and Ford, 2002). This is explained by actions and reactions among business partners (Halinen, Salmi & Havila, 1999). However, also the own company may impact the strategy realization. Organizational research has shown how company representatives on various organizational levels may view matters in different ways (Aspesi and Vardhan, 1999, Longenecker and Gioia, 1992 and Van Der Velde and Jansen, 1999). Since there are often a number of individuals representing each company in a business relationship (Axelsson and Agndal, 2005 and Webster and Wind, 1972), several actor bonds (i.e. links between individuals representing interacting companies, Håkansson & Snehota, 1995) are established, presumably on various organizational levels, but often interlinking individuals on similar organizational levels of the interacting firms.
This paper brings together the perspectives of interorganizational business relationships, with actors on various organizational levels, to add insights into why company strategies may not materialize. Based on an empirical example, the paper argues that actors on similar organizational levels, but within different interacting companies, may actually share more understandings and act in better accordance with each other, than those on various organizational levels within the same company. This means that the difficulties of strategy realization may result from intraorganizational differences, or from a combination of interorganizational and intraorganizational differences, and that interorganizational actor bonds may be stronger than the perceived intraorganizational ones. The purpose of this paper is to describe and discuss how actor bonds on various organizational levels in business relationships affect strategy realization. The paper focuses specifically on the differences between the top management and operational levels in a dyadic business relationship and how this affects the realization of company strategies.
The paper contributes to research into dyadic business relationships by highlighting the different perspectives of actors on various organizational levels. Networking has come to represent activities performed by a company (Ford & Redwood, 2005) vis-à-vis other parties, but interorganizational activities equally occur at different organizational levels and may differ in their expression. The paper also contributes to the research into organizations and hierarchies by including a business-relationship aspect to the differences among various organizational levels. Organizational studies have pinpointed differences between individuals at various organizational levels (Aspesi and Vardhan, 1999 and Van Der Velde and Jansen, 1999), but have studied this purely from an intraorganizational perspective without connecting it to business relationships. Managerially, this paper helps to increase understanding of why strategic plans are not always realized in business-to-business settings.
The paper is structured in the following way: the next section connects research into the actor dimension of business relationships in marketing to the hierarchical division of organizations described by organizational theory. It does this to frame the overall topic of this paper and to indicate the gap in literature in regard to the consideration of various hierarchical levels of business relationships and their impact on strategy realization. The section thereafter describes the choice of research method, data collection and data analysis. The empirical part of the paper is based on a single case study (the BT Industries / Volvo Group business relationship) researched from the supplier and customer perspective that includes interviews with the top management and various operational levels of the two companies. Descriptions of the companies, their business relationship and change activities are outlined in the section following the description of the method. Differences between organizational levels in business relationships are related to the case study and analyzed using elements from research on organizational levels. Based on the case, three explanations are highlighted: control, closeness/distance, and differences in perception. These provide a basis for why strategies may not be realized. The paper ends with a discussion that includes managerial implications and suggestions for further research.
This paper shows that actors on similar organizational levels, but representing different companies, may actually share more meaning than actors within the same company. This in turn helps to explain why company strategies may not materialize. The reasons for differences among organizational levels of a business relationship could be explained through control mechanisms ( Franklin, 1975 and Lassar and Kerr, 1996) that allow local activities to continue as previously or actors' attempts to remain independent, closeness and distance between parties ( Nielson, 1998), and the different perceptions of individuals based on their organizational ‘location’ ( Lazaric & Raybaut, 2005). How these three explanations relate to previous research and to one another are discussed in this section. Also, reasons as to why strategies may not be realized are discussed in this section. The section ends with managerial implications and ideas for further research.
