Managing the Embedded Multinational

Managing the Embedded Multinational

A Business Network View

Mats Forsgren, Ulf Holm and Jan Johanson

This book expands the business network view on managerial issues in multinational corporations. Specifically, it scrutinises the importance of a subsidiary’s external and internal business network for its strategic and organizational role within the corporation.

Chapter 4: Development of a Business Network – The Case of Danke

Mats Forsgren, Ulf Holm and Jan Johanson

Subjects: business and management, international business


In the previous chapter we described the development of relationships in which Danke was engaged during periods of business exchange lasting anything from 20 to 50 years. We observed that Danke’s business had developed within an essentially stable network, although certain aspects of its longterm relationships changed over the years. It was clear that every relationship with a customer or a supplier affected Danke’s business behavior, both its volume and its technological competence, albeit to a varying degree and at different times. In this chapter we illustrate the evolution of relationships from the arm’s-length stage to the close and more profoundly cooperative level. We then relate this development to the connectedness of relationships, and describe the way that two of Danke’s most important relationships – with Aspi and Bitte – have influenced the company’s exchange in its other business relationships. The chapter closes with some comments on certain important characteristics of connectedness and some of the issues facing management. THE DEVELOPMENT OF A BUSINESS NETWORK The more immediate part of Danke’s network consists today of a mix of local and foreign business relationships with suppliers and customers. As we saw in Chapter 3, as a result of direct cooperation and the requirements thus generated, these relationships have driven Danke to acquire a special competence in the development, manufacture and sale of new product qualities. The creation of new solutions has made the business relationship with Danke more significant to its customers; its competitive strength is no longer limited to the local market...

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