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Network Forms of Business Organization in the BRICS Countries

Priority areas of development: management
2012
Head: Tretyak, Olga, Sheresheva, Marina Yurievna
Department: Laboratory of Network Organizational Forms

Research studies devoted to network forms of business organization are of high importance in contemporary management science. The issue of network business organization has a special meaning in the context of globalization. The key characteristics of the most common types of networks of business organization, their performance, formation, and dynamics depend on the economic, cultural, and institutional features of different countries and regions, including emerging markets. The abstract reveals the most significant results of the study of network forms of business organization in the BRICS countries, conducted by the Laboratory for Network Organization Forms in 2012.

The object of this study is inter-firm interaction. The goal was to study inter-firm networks in the BRICS countries (Brazil, India, China, Russia, and South Africa) with special attention paid to the economic, cultural, and institutional specifics which can influence inter-firm networking in these markets. In particular, the following tasks were considered:

- Analysis of the patterns of interaction in the value chain, a more detailed study of the model taking into account the impact of the dominance and bargaining power distribution within the value chain;

- Cross-cultural analysis of inter-firm, networking-development conditions in the BRICS countries;

- Identification of the main differences and similarities in inter-firm networking in the BRICS countries.

The research project used a range of methods, including inductive and deductive methods, the case study method, in-depth interviews and participant observation as a data collection method, statistical methods of analysis, and modeling.

For all the points mentioned above, meaningful results are being obtained.

The concepts of "value" and "value chain" are analyzed in detail and represented by the variety of their interpretations. The classification of the existing theoretical value creation models is being carried out. Based on the analysis of the existing approaches to the assessment of the results of marketing activities, a conceptual model of client flow is being proposed. The benefits of value chain thinking are being highlighted. A tractable framework to analyze the impact of the bargaining power distribution within the value chain on firms’ incentives for investments in quality improvements is being developed.

The analysis of the BRICS countries’ economic growth and development being conducted revealed the positive dynamics of these markets evolving from the periphery to the core of management practice. The obtained results suggest that significant differences in the growth rates of China and India on the one hand, and Russia and South Africa on the other hand, are due not only to a higher share of investment in GDP but also to a more efficient use of investment to achieve higher GDP growth per unit of investment in fixed assets.

A cross-cultural analysis of the BRICS countries was conducted, based on Hofstede's theory of cultural dimensions and Gesteland’s patterns of cross-cultural business behavior. Culture is considered to become an important aspect of business relationships in the BRICS countries since the considerable heterogeneity of BRICS cultures and their difference from the industrialized markets make it inevitable for researchers and practitioners to rethink the issues of public policy and managerial practices.

The challenges and opportunities of innovative development of inter-firm networks, clusters in Russia as compared to other BRICS countries, are investigated. The research is based on the results obtained in 2011 in a pilot field study of the environment of potential participants of inter-firm networks -- innovative business organizations. In 2012, efforts were made to make estimates for a more homogeneous group of BRICS countries. These countries are compared using three indicators which characterize the prevailing perceptions of the opportunities and risks of business: perceived opportunities; perceived capabilities; and fear of failure. The analysis clarifies more precisely the idea about the causes of low innovation activity in Russia which lags behind other BRICS countries. The current state of the Russian institutional environment is described, highlighting today's strategic challenges for inter-firm networking and major opportunities for the future.

The results of the study of network forms of business organization in the BRICS countries provide opportunities for the development of future directions for research in this area, including more in-depth study of the network coordination mechanism, which can be analyzed with respect to specifics of inter-firm interaction in the emerging markets.

Publications:


Sheresheva M. Y., Peresvetov S. B. Inter-firm Relationships of Russian SMEs: A Way to Survive the Crisis and to Innovate // Journal of Entrepreneurship & Innovation. 2012. Vol. IV. No. 4. P. 1-19. 
Sheresheva M. Y., Peresvetov S. B. Inter-firm Relationships of Russian SMEs: A Way to Survive the Crisis and to Innovate // Journal of Entrepreneurship & Innovation. 2012. Vol. IV. No. 4. P. 1-19. 
Колесник Н. А., Мальков Д. Концепция верификации сетей в межфирменном взаимодействии, in: Современный менеджмент: вопросы теории и практики. Сборник статей аспирантов и студентов. Москва : Издательский дом НИУ ВШЭ, 2012. С. 72-85.