Business agreements objectives and decisions: a field research

Purpose - Many research studies in operations management (OM) and strategic management (SM) investigate how different kinds of firm decisions regarding business relationships can positively affect a firm's operations performance, resource endowment, and competitive position. Very few studies exist, however, that have attempted to illuminate the actual behaviors of managers when making strategic decisions about their intercompany relationships; rather, most existing studies focus on normative theory. The purpose of this paper is to explore linkages between the “set” of strategic objectives that managers are willing to pursue, the “set” of networking decisions they make, and the “set” of business agreements they sign. Design/methodology/approach - In order to investigate and explore actual managerial behaviors with respect to networking strategy, the study adopts a field research approach based on multiple case studies. Data were collected on 13 business agreements from three manufacturing firms in the mechatronics industry in Italy. Within‐case and cross‐case analyses are used for theory‐building purposes. Findings - The empirical data allow identification four different archetypes of networking strategy. The archetypes capture different connections between the “set” of strategic objectives that managers are willing to pursue, the “set” of networking decisions that they consider, and the “set” of strategic agreements that they actually adopt. Specifically, the identified archetypes are named multi‐alignment, multi‐agreement (diversification), multi‐objective, and mono‐alignment (focus), and these are related to different association multiplicities among objectives, decisions, and agreements. The implications related to these archetypes are three‐fold. First, the multi‐alignment archetype suggests a focus not just on one kind of agreement, but also on the firm's overall portfolio of agreements, in order to facilitate understanding of how different kinds of agreements and networking decisions can play a complementary role in achieving a firm's predetermined business objective/s. Second, the multi‐agreement (diversification) archetype suggests that managers can minimize the risk of losing the potentiality of network collaboration by undertaking different kinds of agreements for the same strategic objective. Third, the mono‐alignment (focus) and multi‐objective archetypes suggest that just one agreement can potentially pursue one or multiple strategic objectives, and thus can allow managers to minimize the cost of managing several networking relationships. Originality/value - The originality of this study lies in its exploration of linkages between objectives, decisions and networking agreements. Unlike most of the existing papers in OM and SM, however, it does not specifically focus on: vertical or horizontal relationships; operations performance (positioning school) or resource endowment (resource‐based view) strategic objectives; or any specific kind of agreement contract (outsourcing, alliance, joint venture, etc.). This paper presents four different networking strategy archetypes that represent different ways of matching a “set” of networking decisions, strategic objectives and business agreements. These are not related to either vertical or horizontal relationships, operations performance or resource endowment objectives, or any specific contract agreement form.