CHAPTER 2: METHODOLOGY
2.4 Account of the research process
visualization of the triadic relationship. Do they see it as a chain or is their interpretation corresponding with the theoretical conceptualization of the relationship as triadic?
Background interviews have also pointed towards a number of additional issues of importance for the understanding of value creation in the triads:
Pricing issues related to discounts and profits
The concept of the proficient timber merchant
Competition in the industry
Decision making in the building material industry
The importance of / influence from merchant chains
These issues are included in the interview guide in order to get data on the atmosphere of the relationships, and on the environment.
At the end of each interview the respondents are asked if further value dimensions influence the value creation process. No respondents indicated so, but an un-anticipated administrative activity occurred during the first customer interview: In some situations the merchants make thorough basic calculation of tenders and quotations for their customers, based on the material that the customers receive from the ordering parties. Consequently, this element of administrative services was included in all further interviews.
context of my thesis, suppliers are paying commission to intermediaries. This is a give constellation, and intuitively it is assumed that the suppliers must get something in return e.g. that the merchant perform value creating activities from which the customer can profit. However, the suppliers are also active parties in value creating activities for the customer. Thus, the suppliers’ give constellation is apparent both in money (the
commission paid to the merchant) and resource investments (the activities performed and relationship building with customers). But the get constellation for the supplier; the value of the intermediated system is less apparent. Therefore, value and value creation are given priority over cost and value appropriation in this study.
The research process began with two long interviews with the project managers in the two participating companies and was followed by several short-term internships. The CEO’s signalled that all managers and employees were expected to support my research through dialogue, and I was given full and open access to any information that I would like to get. I profited from this and conducted 26 semi-structured interviews with employees in the two suppliers’ companies during the initial stage. (See appendix B for a complete list of interviews).
So, from the very beginning a platform of dialogue was established, and I was offered an abundance of information and interesting perspectives. On several occasions I was invited to present my transitional observations and results. These meeting were opportunities for me to get managers’ and practitioners’ response. The close dialogue and the initial interviews first of all confirmed the relevance for practitioners of the study. Moreover, they offered first insight into activities and relationships, seen from the suppliers’
perspective, which inspired the interview-guide. And finally they gave me the background knowledge for understanding the structure of the industry, which has informed my analysis of contingencies.
Gradually I realized that if I was to understand the value created for customers I had to study their relationships with the suppliers as well as the merchant, as both are interacting with the customers. This phase of the research resulted in two initial research questions which initiated the first literature review on which to found the content of the interview guide for my data collection: How do the actors in a triadic business relationship create value for and with each other? And what are the key value dimensions in a triadic structure, composed of a supplier, a merchant and a customer?
As my approach is a Markets-as-Networks approach I regard three party constellations as micro-networks. The MAN approach conceptualizes networks as structure emerging from
dyadic interaction which can be studied at three levels; actor bonds, resource ties and activity links. Data on activities are relatively simpler to access directly than resources. So activities are an obvious choice for a study of the interaction. However, networks are composed of relationships and actors. The possible influence of the actors’ positions on value and value creation is to be included. Therefore, two further initial questions were phrased: What value creating activities are performed by whom, for whom and with whom? And what is the value of position and how does position influence the value creation in triadic business relationships?
First literature review
The purpose of the first literature review was to find out how to define activities. Value studies (chapter 6) offer a number of conceptualizations of relevance for my research. But most importantly for the process was the distinction offered between direct and indirect value functions as related to activities and network access. This became the backbone of the interview guide, which also encourage respondents to describe their relationships with the other respondents. However, studies of B2B value also point to the significance of contextualizing indicators for the specific local context of the study. The three-party constellation includes an intermediating merchant. Consequently, the possibility of contextualizing activities for an intermediated context was evident. Channel research (chapter 7) is an obvious domain for that purpose and offers precise categorization of intermediation activities. And this categorization of activities is applicable for a study which takes a MAN approach in spite of the incompatibility between channel research and the MAN in the conceptualization of channels and intermediaries.
Moreover, I had to consider what type of findings I would be able to sustain, when choosing an interview-based case-research as my method, and the initial steps in forming the methodological foundation of the study were taken. During the process, I also realized that a triadic approach was not common in business studies, and that I would have to find theoretical foundation to sustain this approach.
First round of interviews and first analysis of data:
The good dialogue with the two partnering supplier companies made it easy for me to set up customer interviews. I was assisted in selecting respondents based on criteria that I decided, and the first four customer interview included small and large accounts from both suppliers using merchants from various chains. The sales-personnel made the initial contacts, asking whether the customers would be willing to give interviews. From that point on, the sales-men were excluded from the process. I set up appointments with the
customers and sent them a short memo of who I am, including an account of the organization of the research consortia, and the purpose. The interviews were conducted within a month, and I was welcomed with much interest and open-minded dialogue.
Due to the triadic interaction pattern, I found it interesting if I could get the merchants’
and the suppliers’ perspective on their relations with the customers that I had interviewed.
Owing to the positive reception among customers, I decided to contact them again and ask how they would feel, if I made the same interview with their merchants and suppliers. All of them agreed to this idea. The purpose was not to get the customers’ data ascertained, but to get the merchants’ perspective on value dimensions, the value creation process and the interaction pattern in the triadic relationships.
I subsequently contacted the merchants, and three out of four accepted my request for interviews. Unfortunately, one of the three was later cancelled due to the merchant’s personal circumstances. But two were successfully conducted, and consequently I could close this round of interviews with supplier interviews yielding two complete triadic relationships. This choice is also in accordance with the conceptualization of value as a bi-directional process. A triadic relationship does not reflect the advantages or value potential of the structure for the customer alone. Therefore a study of the value potential of a triadic structure demands the collection of data from all three parties.
During the first analysis of interviews it became clear to me that it was not enough to analyze triadic relationships as sets of three dyads. In order to understand them I had to conceptualize them as triadic structures. This directed my interest towards
interconnections; how relationships influence each other and a final initial question was phrased: How can constellations of interconnections be conceptualized as a value dimension in business triads?
Second literature review:
The search for the answer to this question sent me back into the MAN literature and I realized that there was some sort of link between motives for action and the value potential of the structure. And as motives are part of the actors’ agency, motives have the potential to form a bridge to perceived interconnections.
The review of the MAN literature pointed to another aspect of the problem in linking structure and value potential. Interconnection is defined as the way in which a relationship influences another relationship. However, relationships are structural phenomena, and structures have no agency. Thus, interconnection defined as a structural phenomenon
seemed ambiguous, and I re-conceptualized interconnection as the actors’ perception of structures and dependencies. But the link between the triad as a structure and value creation as a process was still unresolved. The interviews had supported the distinction between direct value functions as related to activities and the indirect as related to market access. But theoretically there were no studies which offered a conceptualization of the value function of interconnections.
Second round of interviews
During the search for the answer to the above theoretical questions, the second round of interviews took place. Due to the fact that only two triads had been completed in the first round, I had decided to make another round of interviews. Not for replication, but in order to get more details on triadic business relationships. This time I chose respondents in the region around the capital. Building activities had been very intense in this region for a period of time, but had more or less come to a stop due to the financial crisis setting in during 2008. And this was an interesting phenomenon to include. The procedure was the same as last time, with the small difference that I could ask the customers, before leaving them, whether they would concede to my interviewing their merchants. The two
respondents did, and this time the two merchants also accepted my request for interviews.
This round of interviews was finalized with two supplier interviews, and the data on triadic relationships doubled. To some extent information was ascertained, but new data also emerged.
As I was unresolved to the significance of interconnection for value creation, I decided not to change my interview guide. Experience from the first round had shown that I was able to collect rich and detailed information on the basis of the guide. Consequently, I believed that four cases based on the same approach was a better choice than two set of data collected with different methods. However, my attention to the significance of interconnections made me realize that the data about relationships that I collected included elements which related to interconnection. But the conceptualization of the value of interconnections was still missing.
Third literature review
Due to my struggle with triads as networks and the concept of interconnection, I chose to attend a PhD-seminar on social network analysis. It proved to be most instructive, because the literature presented enabled a comparison between an interaction based network approach and a structural approach to networks. This was much rewarding, and the inclusion of the SNA perspective inspired the final step in conceptualizing the relationship
between the process of value creation and the triadic structure. I was able to point out that triadic relationships, which display the same structure, e.g. open triadic structures, can be motivated differently. But SNA does not offer conceptualization of networks which capture this feature of networks. Thus, the problem that I was trying to solve could be re-interpreted as the link between structure, value potential and motivation for participation.
Causation
By combining the insights from my literature reviews and the data it finally became clear to me that there was a link between structure, motivation, value potential and actor
perceived interconnections. It gave a new perspective on the literature that I had reviewed and resulted in the phrasing of a number of theoretical research question. These questions resulted in the conceptualization of patterns of intermediation as a core construct which captures that: The combined direct and indirect value potential of the triadic constellation is the phenomenon which motivates the actors to participate. This is the link between motivation for participation, value potential and structure.
During the research process, data had been analyzed, but a comprehensive perspective was missing. The conceptualization of patterns of intermediation changed that. It facilitated the development of a framework which reflects the three elements of the triadic structure. And it defines value functions for each element. These functions have been contextualized for an intermediated context which facilitates the analysis of channel relationships as value creating networks. The application of the framework to the analysis of data confirmed the practical adequacy; i.e. the explanatory quality of the framework.
Moreover, it emphasized that the value potential of a structure is not an objective phenomenon. It is the result of a focal actor’s evaluation.