---
# System prepended metadata

title: '<center><i class="fa fa-edit"></i>INTERACTION AS A WAY OF DEALING WITH RELATEDNESS, VARIETY AND MOTION </center>'
tags: [International Business Development and Networking]

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# <center><i class="fa fa-edit"></i>INTERACTION AS A WAY OF DEALING WITH RELATEDNESS, VARIETY AND MOTION </center>

###### tags: `International Business Development and Networking`

::: info
**GOALS:**
- [x] Three main features of the Business landscape 
- [x] The Need for a Different Theoretical Approach
- [x] A Business Landscape Populated by Interacting Companies
- [x] Interaction as a Way of Dealing with Relatedness 
- [x] How to Create Benefit from Relatedness
- [x] Relatedness as an Organizing Force
- [x] Interaction as a Way of Dealing with Variety
- [x] How to Create Benefit from Variety
- [x] Variety as a Source of Opportunities
- [x] Interaction as a Way of Dealing with Motion
- [x] How to Create Benefits from Motion
- [x] Motion in a Moving World
- [x] Interaction and the Larger Business Landscape

:::

[Download Here](https://docs.google.com/presentation/d/1EFALGz9H32_tYQKVuqlfAi_X1Sq4T0gn/edit?usp=sharing&ouid=113964392267877547356&rtpof=true&sd=true) <iframe src="https://docs.google.com/presentation/d/1EFALGz9H32_tYQKVuqlfAi_X1Sq4T0gn/preview" width="100%" height="400"></iframe>

### Three main features of the Business Landscape
In the previous meeting, we divided three characteristics of the Business landscape by using the rainforest metaphor. The main features of the landscape are:
* Variety (ex: Think broadly about what you can give and develop a new variety of products)

* Motion (You acquire knowledge from outsiders to create movements for your company. In other words, focus on what you learn and find higher purposes )

* Relatedness (Partnership. for instance, the air company needs to share the customers from the same destinations. Ex: Identify common interest) 

**The objectives of this chapter are:**
* an overview of how companies engage **in direct interaction with each other in order to deal with variety, motion and relatedness and
*  how these features are expressed in terms of time and place specificity.


### The Need for a Different Theoretical Approach

Learning various theoritical approaches can avoid us from the clash with established business theory because our attention was not triggered by personal emotions. This aimed to have the development of long-lasting business relationship between customers and suppliers is the normality of business. The search for an explanation of the empirically observed phenomena of interaction and relationships became the starting point for the development of a new field of research.

Nowadays,producers and users hold on to each others for many years, instead cheating or jumping among counterparts. Here, The need for framework could capture the content and effects of longterm interaction became obvious in the beginning of the research.From this basis, this phenomena will affect both parties and their social and technological assets. Thus, business in practice appeared to be a process of creating benefits through voluntarily relating and adapting to each other.

The first IMP project started in 1976 and included investigations of the content and effect of more than 1000 supplier–customer relationships (Håkansson 1982; Turnbull and Valla 1986).
The outcome of the study can best be described as a ‘discovery’, or as overwhelming testimony that to do business is to create benefits together with others.The most immediate finding from the research was that the relationship pattern across the European business landscape appeared to be very stable and the average European business relationship was over 12 years old



> Three challenges identified in the IMP Project 
> * the concentration of industrial-buyer-behaviour literature on a narrow analysis of a single discrete purchase
> * the view of industrial marketing as the manipulation of the marketing-mix variables
> *  the view which implies an atomistic structure in industrial markets.


### A Business Landscape Populated by Interacting Companies
![](https://i.imgur.com/r61nZHk.png)


summarizing some of the main empirical findings by relating them to the three basic characteristics of the business landscape introduced in Chapter 1: relatedness, variety and motion.

### Interaction as a Way of Dealing with Relatedness

According to first IMP project, we can assume that it built long-term nature of the relationship between suppliers and customers. The empirical investigations underlined that relationship continuity is favourable for both customers and suppliers in relation to companies’ attempts to achieve both stability and change.  A long-term orientation also enables sellers to create or rationalize efficient supply systems and to capitalize on development opportunities. Continuity is also valuable in helping to reduce some of the uncertainties that both parties face in doing business with each other (Ford et al. 2003). These uncertainties may centre on exactly what a customer should seek from a supplier and what a supplier should offer to a customer.Continuity not only affects the relatedness between individual customers and suppliers. It also profoundly affects the character of the business landscape as a whole.

Reasons why companies increase their dependence on a few main counterparts
* strong relatedness has important structural effects in the business landscape
* relatedness also has important dynamic effects in the business landscape

### How to Create Benefit from Relatedness
The use of direct relatedness between companies is often rather obvious. However, there is also an indirect and less visible relatedness between companies which is still of great economic importance.

### Relatedness as an Organizing Force
interaction and business relationships are of key importance in creating benefits from relatedness.Relatedness means that any greater or lesser change in the business landscape produces reactions.As soon as two companies adapt in relation to each other by changing a product, a process or an organizational routine then the effects are distributed to other related solutions of other producers, users and complementary firms. The business solutions that are already embedded across company borders will force new developments to take particular directions.

Thus the empirical findings made in the IMP setting provide a very clear message about relatedness: Companies seem not only to accept relatedness, but voluntarily to engage in developing and using it systematically.

### Interaction as a Way of Dealing with Variety
Business relationships are multidimensional. In order to benefit from a relationship and to achieve increased efficiency or innovation, the participants have to relate to each other over time and also in a number of dimensions.
* First, they have to find technological solutions 
*  Secondly, they have to find administrative routines that are compatible with their overall organizational structure and with those of their counterparts
*  Thirdly, they have to find financial solutions that relate to their own economic logic and to that of their counterpart

‘where tiny initial differences produce enormously different effects’ (Waldrop 1992:31)

These studies underline that **the adaptations** made to cope with variety in the business landscape can take two rather different forms.
Adaptations can be carried out in order to 
* decrease the variety of material and non-material solutions.Attempts to decrease variety can be made in order to make the working procedures across company borders smooth and efficienT.
* Increase variety, through technological and organizational development

> These adaptations, aimed at increasing or decreasing variety in order to create efficiency or innovation may take the form of major one-off measures or smaller successive steps over time


### How to Create Benefit from Variety
Variety can be natural or man-made and both forms can be used as business opportunities.
* Variety in nature : the variety of the tree genome consists of about 30 000 genes (related to the supply and use of forest-based products)
* Man-made variety, expressed in tangible, as well as intangible, ways is no less impressive and can be utilized in many ways

### Variety as a Source of Opportunities

Variety provides challenges, it is also an important source of opportunities in the business landscape. Ways of exploiting variety include attempts to decrease variety in order to reach efficiency and attempts to increase variety in order to create innovation. Ways of exploiting variety include attempts to decrease variety in order to reach efficiency and attempts to increase variety in order to create innovation.

### Interaction as a Way of Dealing with Motion
The business landscape is characterized by motion.An early but important indication that doing business involves living with motion was the limited use of formal agreements and contracts between companies.
* Formalized procedures and contracts are common in regulating short-term business exchange. The disadvantages are we must deal with unexpected things but it has normal effects such as uncertainties, conflicts and crises.
* Informal mechanisms such as trust and confidence were considered by managers to be more important than formal contracts in handling the unexpected effects of motion. These findings underline that social interaction and the development of trust is an important way to deal with motion in the business landscape.The role of social interaction and development of trust is not primarily to exclude the uncertainties created by motion, but rather to ensure that it is handled fruitfully.

Although companies tend to develop a balanced way to deal with dependency and power in their business relationships, there will always be conflict. The parties in a relationship will have different interests and their operational and financial interdependence will be affected by motion in that relationship and across the business landscape.

Conflict is an important ingredient in the promotion of innovation and hence is a dynamic force in business relationships (Gadde and Håkansson 1993).

The ways that these processes of learning and teaching evolve over time is central both to relationship development and each company’s prosperity 

**The ability to benefit from motion is related to a company’s ability to utilize another in its development**. Many companies become very skilled in drawing on each other’s resources in technological, organizational and commercial development. Coping with motion through joint development with specific counterparts is similar to dealing with variety. It does not reduce the motion but changes its direction and form.

Motion that is coordinated by participants across the business landscape can, over time, result in both increased efficiency and innovativeness.

### How to Create Benefits from Motion
Motion in the business landscape is a source of opportunities even when it may appear threatening. for instance, the purchase of atantic salmon obviusly involved doing business companies representing fisherman working on the Atlantic sea.Nowadays, Salmon is one of the best export products of pproducers located on miles kilometers away. This actualyy looked like a threatening. when breeding of Atlantic salmon started, many companies tried to build salmon breeders in the opposite globe become an alternative source. from traditional perspective, this motion could only provide severe challenge. however, many chilean companies thought that Ocean was also suitable location breeding for salmon. A whole industry emerged, and involving everything from the development of feeding to the distribution of atlantic salmon in the US.  The possibilities that this motion provided by offering new combinations and development opportunities for established producers’ technologies led to another view emerging.

### Motion in moving world 

The motion of the business landscape affects all companies. Each company tries to develop in a direction that appears to be beneficial to it. But while it is struggling to move in that direction, others are also moving, sometimes in supportive directions and sometimes in directions that hinder. Any movement that a company makes is among companies and organizations that also are in motion. Thus, to be in business in a rainforest-like business landscape is to move in a world that is also in motion.

### Interaction and the Larger Business Landscape

The experience we have presented from the last three or four decades of empirical research on interaction and business relationships is mainly drawn from studies concerned with those directly involved or closely related to particular relationships.

A conclusion of the first joint IMP study about the effect of the interdependencies that arise from mutual adaptations in technology, organization and knowledge was that, ‘the result of this for the whole market system is that it will tend to be rather stable. Instead of free moving units within a market we have companies with very little freedom to move’ (Håkansson 1982:394).


the ways that companies interact and relate to each other have important consequences for the business landscape, regardless of institutional characteristics such as the amount of state coordination and the extent of decentralized public and private decision-making (Whitley 1994, 2000); 

Institutional characteristics, the people that are involved and the functions that they represent also influence the interaction processes going on between companies (Håkansson and Waluszewski 2007).


