Avoiding Triadic Reductionism: Serial Tetrads - a Useful Concept for Studying Connected Relationships?

This paper focuses on the concept of 'connection' in the Industrial Network Approach. The concept of 'triad' has been proposed in order to overcome 'dyadic reductionism'. However, use of 'triads' seems to impose some limitations on further theory development. The concept of 'serial tetrads' is proposed in order to avoid 'triadic reductionism'. PROLOGUE In 1923, the religion philosopher Martin Buber wrote the book "I and Thou" on the dialogue between man and God based on Judaism. In this book he discusses living with Nature, living with people, and living with the spiritual realities. In this book he discusses two pairs of words. The first is 'I-Thou' and the second is 'I-It'. Buber (1923, p. 5-7) explains the two pairs of word, and relates them to each other, in the following way: "The first cardinal word is the word pair I-Thou. The second cardinal word is the word pair IIt. Because, in the cardinal word I-Thou, the I is different from the I in the cardinal word IIt." "No I exists per se, only the I belonging to the cardinal word I-Thou and the I leading to the cardinal word I-It. When man says I, he implies one of the two. When he says Thou or It, the I from the one or the other cardinal word is present, too." "The one saying Thou has no Something as an object. Because where there is one Something, there is another Something, any It borders with other Its, It is only there because it borders to others. But when one says Thou, there is no Something. Thou have no borders. The one saying Thou, has no something, it has nothing. But he is in the relation." INTRODUCTION AND PURPOSE OF THE PAPER During the last twenty years, a lot of empirical studies have been carried out focusing on what industrial markets generally look like. See for example Dubois (1998); Ford (1990); Gadde and Mattsson (1987); Håkansson (1982, 1989); and Turnbull and Valla (1986). Such studies have shown that industrial markets are characterised by the existence of long-term customer and supplier relationships, and that these relationships in turn are both complex and vary with regard to content and processual aspects. With that as a starting point several concepts and frameworks have been developed which have contributed significantly to our understanding of how business relationships can be characterised and analysed. For a detailed description of some of these concepts, see for example Dubois (1998); Dwyer, Dahlstrom and DiNovo (1995); Dwyer, Schurr and Oh (1987); Ford et al. (1998); Frazier, Spekman and O’Neal (1988); Gadde and Håkansson (1993); Håkansson and Snehota (1995); Powell (1990); and Wilson and Möller (1995). Recently, there has been a change from studying dyadic buyer-supplier relationships to examining such dyadic business relationship in the context of other relationships the participating firms may have. These studies have shown that firms (and relationships) do not exist in isolation, but rather that they are connected to a network context through direct and indirect relationships (Anderson, Håkansson and Johanson 1994; Axelsson and Easton 1992; Blankenburg 1992; Havila 1996; Laage-Hellman 1989; Pedersen 1996 and 1998). This implies that in addition to characterising individual relationships, the studies have shown that single relationships also are affected by and affect developments in other relationships. Thus, a single business relationship exists both in itself and, at the same time, is embedded in a context, through its connections to other relationships. This is also stressed by Granovetter (1992, p. 33): "’Embeddedness’ refers to the fact that economic action and outcomes, like all social action and outcomes, are affected by actors’ dyadic (pairwise) relations and by the structure of the overall network of relations. ... The structural aspect is especially crucial to keep in mind because it is easy to slip into ‘dyadic atomization’, a type of reductionism.” Grabher (1993, p. 4) seconds this proposition stating that: "The structural aspect is especially crucial to keep in mind because it is tempting to slip into the sort of 'dyadic reductionism' that is prevalent in Williamson's transaction-cost approach: the treatment of dyadic activity as if this were structured by the norms and interests entailed in the roles of buyer and seller." Hence, within Economic Sociology, Granovetter (1992) and Grabher (1993) have pointed out the problem of 'dyadic reductionism', i.e. treating a dyad as if it existed separate from its context. Within the Industrial Network Approach, 'dyadic reductionism' is avoided by conceptualising relationships as being connected. This has e.g. lead to the introduction of the concept of a 'triad' which is proposed to be the smallest unit of analysis in which it is possible to study connections between relationships. In this paper, we review the different conceptualisations of 'connected relationships' within the Industrial Network Approach, e.g. 'serial triads' and 'unitary triads'; 'implicit', 'open', 'semi-closed' and 'closed' triads. On the basis of this review, we discuss whether the present conceptualisations of 'connected relationships' are consistent with the main assumptions of the Industrial Network Approach, the main theory development aimed at, and the primary unit of analysis. Consequently, the purpose of the paper is twofold. Firstly, the purpose is to review the ways in which 'connected relationships' or 'connection' is presently conceptualised within the Industrial Network Approach. Secondly, the purpose is to discuss the extent to which these conceptualisations are consistent with the ideas on which the Industrial Network Approach is based. On the basis of the review and discussion, we suggest the concept of 'serial tetrads' as a point of departure for future studies of 'connection', as 'serial tetrads' enables us to avoid 'triadic reductionism' and the identified problems related to the use of the concept of 'triads'. In the final section of the paper, we suggest points of departure for further research on 'connection'. THE CONCEPT OF CONNECTION The concept of connection within Social Exchange Theory In order to define what we mean by connection within the Industrial Network Approach, we usually borrow a definition from Social Exchange Theory. Emerson (1972 in Cook and Emerson 1984, p. 3) has defined the concept of connection in the following way: "Two exchange relations are connected to the extent that exchange in one relation is contingent, positively or negatively, upon exchange in the other relation". This implies that two relationships must affect each other to be connected. This view of the concept of connection is also used by Yamagishi, Gillmore and Cook (1988, p. 835), but in the latter article it is presented slightly different "...two exchange relations, A-B and B-C, are defined as connected at B to form the larger network structure, A-B-C, only when exchange between A and B to some extent affects exchange between B and C, and vice versa". Furthermore, Emerson (1972 in Yamagishi, Gillmore and Cook 1988, p. 835) has elaborated on what is meant by positively and negatively connection. He defines these concepts in the following way: "If two relations, A-B and B-C, are positively connected at B, exchanges in the A-B relation facilitate exchanges in the B-C relation and vice versa. If the same two relations are negatively connected at B, exchanges in the A-B relation diminish or prohibit exchanges in the B-C relations, and vice versa." This implies that when relationships are positively connected at B, B e.g. exchanges something (resources, technical know-how, products etc.) to C which B has obtained from A, and which B either exchanges unchanged or further processed. When relationships are negatively connected at B, this often implies that A and C fight over something (resources, technical know-how, products) which is controlled by B. The extensive work done by the authors mentioned above is based on a lot of laboratory experiments where individuals have been tested in different situations. For example, people have been asked to estimate the time spent on professional relations versus relations within the family or to friends. These types of experiments have lead to a more theoretical 129 In the remainder of the paper we shall use the concepts 'connection' and 'connected relationships' interchangeably. 130 Both Cook and Emerson (1984) and Yamagishi, Gillmore and Cook (1988) are based on earlier studies and publications by Richard M. Emerson and Karen S. Cook. See for example Emerson (1972) and Cook and Emerson (1978). discussion about how different relationships are connected, and in what way relationships affect each other. The concept of connection within the Industrial Network Approach Within Social Exchange Theory, the relationships studied are, as mentioned above, between individual actors. Contrary to this, within the Industrial Network Approach we (primarily) focus on relationships between collective actors such as organisations or firms. In the last ten years, studies have been carried out within the Industrial Network Approach focusing on the 'network context' of firms with special regard to how relationships are connected and thereby affect each other. In the rest of this section we shall present some of these studies, which are similar in one aspect: they are all inspired by and rely heavily on the authors presented within the Social Exchange Theory (especially regarding concept development). The different conceptualisations of connection (both related to triads and business context) which will be presented below all focus on connection as something which can be observed between relationships. One article, in which attention has been paid to the context of dyadic relationships within the Industrial Network Approach, is the one by Anderson, Håkansson and Johanson (1994). In this article, the authors discuss how to conceptualise business networks as sets of connected relationships. In relation to this, they define the 'network context' as "The part of the network within the horizon that the actor considers relevant is the actor’s network context" (Anderson Håkansson and Johanson 1994, p. 4). Thus, according to this view it is the focal firm which defines what is the useful context for a given relationship, depending on how the (focal) firm perceives its horizon. The authors identify a lot of possibly relevant actors, related either to the buying or selling firm, in the context that may affect the focal dyadic relationship. Such actors (and relationships) are depicted in figure 1. 131 We shall use the word actor and firm interchangeably. When we talk about individuals as actors this will be outlined specifically in the text. 132 Consistent with the definition of connection presented within Social Exchange Theory, we shall not discuss connections within a relationship in this paper. Håkansson and Snehota (1995, p. 269) on the other hand use the concept of connection both when they identify and discuss relations between three different (but related) layers of substance (activity links, resource ties and actor bonds) within a relationship, and when they discuss relations between relationships. FIGURE 1 Connected relations for firms in a dyadic relationship (Anderson, Håkansson and Johanson 1994, p. 3) Anderson, Håkansson and Johansson (1994, p. 13) emphasise that, within the Industrial Network Approach, business networks are regarded as sets of connected relationships rather than sets of connected firms. Furthermore, dyadic relations are the focal unit of analysis when studying the concept of connection, which is also illustrated in the figure above (by the arrow). Furthermore, Anderson, Håkansson and Johanson (1994, p. 3) discern between the primary and secondary functions of relationships. "By primary functions, we mean the positive and negative effects on the two partner firms of their interaction in a focal dyadic relationship. The secondary functions, also called network functions, capture the indirect positive and negative effects of a relationship because it is directly or indirectly connected to other relationships. However, in a given relationship, secondary functions can be as important as the primary ones, or even more so." Within the Industrial Network Approach, most of the other studies, which more or less explicitly focus on the concept of 'connection', have used the concept of triad. Cook and Emerson (1984) argue that a triad is the smallest unit of analysis which allows us to study connected relationships. Within sociology Simmel (in Wolff 1950) and within social psychology Weick (1969) in similar ways argue that a dyad (with two persons) completely changes when adding a third person. Within the Industrial Network Approach both Blankenburg (1992) and Laage-Hellman (1989) claim that it is useful to study connected relationships within triads because of the possibility to delimit the phenomenon in different ways. "The addition of a third actor represents a leap-wise increase in complexity which makes it possible, in a simplified way, to analyze connections and other network phenomena which cannot be handled in the received interaction model" (Laage-Hellman 1989, p. 31). In the remainder of this section, we shall present four publications, based on the Industrial Other Supplier Unit Third Parties in Commo Other Units in Focal Customer Firm Other Ancillary Firms