CHAPTER 13 IMPLEMENTED STRATEGIES IN BUSINESS-TO-BUSINESS CONTEXTS Arch G. Woodside, Hugh M. Pattinson and David B. Montgomery SYNOPSIS This chapter documents the contributions in the business-to-business (B2B) marketing–buying literature that focus on implemented strategies in specific contexts. Research on implemented strategies often includes thick descriptions of how things actually get done over a period of weeks, months, or years including how decision makers make sense of situations, go about processing information, make choices, interact with other decision makers, participate in specific actions, and interpret events and outcomes. Research on implemented strategies favors ‘‘direct research’’ (Mintzberg, 1979) that includes multiple face-to-face interviews of the same and different participants in B2B processes over the course of days, week, months, or years. Direct research is inherently inductive theory-building and casebased data driven in its theory-empirical approach. Direct research includes applying a number of possible research methods and results in a number of advances in B2B implemented-strategy-in-context theory.
Business-to-Business Marketing Management: Strategies, Cases, and Solutions Advances in Business Marketing & Purchasing, Volume 18, 323–355 Copyright r 2012 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 1069-0964/doi:10.1108/S1069-0964(2012)0000018018
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INTRODUCTION Research on implemented strategies in relevant business-to-business (B2B) marketing–buying contexts is viewable as a unique logic that complements the dominant logic of deductive theory and survey research reports – the dominant logic frequently includes using fixed-point scales. Turnbull and Leek (2003) provide a broad review and useful commentary covering the deductive literature in B2B marketing–buying behavior. However, reviews of the deductive-theory-based literature and the reporting of averageattribute importance and awareness scores fail to capture the dynamics, they do not describe actual processes, nor offer very substantive strategic insights relating to real-life implemented marketing–buying strategies. The core proposition in the present chapter is that deeply examining and reporting real-life B2B marketing–buying implemented-strategies-contexts is a prerequisite for developing and testing implemented-strategy theory (i.e., explanation), that is, B2B marketing–buying implemented-strategy-in-context theory. ‘‘Implemented-strategy-in-context theory’’ is the description and explanation of the antecedents, mechanisms (i.e., configurations or paths), outcomes, and interpretations by participants of what actually occurs in doing a process. This chapter describes research approaches and provides a basic review of the literature that focuses on developing B2B implemented-strategy theory. Implemented-strategy-in-context theory and testing frequently uses qualitative comparative analysis (QCA, see Ragin, 2000), system dynamics modeling (Sterman, 2000), network analysis (see Webster & Morrison, 2004), ethnographic decision tree modeling (e.g., Gladwin, 1989; Howard & Morgenroth, 1968), ethnography and participant observation (e.g., Cyert, Simon, & Trow, 1956; Woodside & Samuel, 1981; Workman, 1991), and other direct research methods (e.g., archival and historical methods, see Christensen 1997; Golder & Tellis, 1993). Several researchers exploring marketing strategy formulation and implementation between firms in the mid-1970 to the early 1980s, align with B2B marketing research groups. The IMP Group focuses on comparative studies of buyer–supplier relationships within and across a number of European countries. Research by the IMP Group describes transactions that could only be examined as episodes in often long-standing and complex relationships between the buying and selling organization (IMP Group, 2008). The Institute for the Study of Business Markets (ISBM) focused on B2B marketing research and practice, initially in the United States, then expanding worldwide. Both IMP and ISBM researchers contribute to understanding implementation (ISBM, 2008) of B2B marketing strategies
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using a rich and diverse range of research methods. The IMP Group in particular, since the early-1990s has developed rich case research methods and applied them to a large range of B2B research projects (see Easton, 1995; Halinen & Tornroos, 2005). This chapter is organized into the following sections: General theory of implemented B2B strategy description, with suggestions for research and strategic practice. Contingency approach analysis of B2B implemented strategies. Cognitive perspectives, sensemaking, and hermeneutic analysis for B2B implemented strategies. System dynamics research on B2B implemented strategies. Historical research method applied to B2B implemented strategies. The comparative method in research on B2B implemented strategies. Emerging virtual world research methods on B2B implemented strategies. Summary, conclusion, and suggestions for additional work.
GENERAL THEORY OF IMPLEMENTED B2B STRATEGY-IN-CONTEXT WITH SUGGESTIONS FOR RESEARCH AND STRATEGIC PRACTICE In the relevant literature, theory on strategy formulation receives attention well ahead of research on real-life strategy implementation (or implemented strategy) theory. By the late-1990s researchers began discussion on concepts relevant for incorporation into a theory of strategic Implementation (Pryor, Anderson, Toombs, & Humphreys, 2007). Parallel to this scenario is a rich vein of B2B marketing–buying strategy formulation research, but no formal theory addressing implemented strategy. Development of a general theory of implemented B2B market–buyer strategy may be useful in particular to crafting middle-range theories because a general theory provides a road map or template of what to look for and how to go about looking for, describing, understanding, and predicting industry-specific (i.e., middle-range) theories. The following propositions are relevant for crafting a general theory of implemented B2B strategies (see Fig. 1): 1. Implemented strategies are dynamic happenings – case-based, historicalbased, or variable-based data must be collected at multiple points in time or continuously.
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Implemented B2B Strategy Theory - Propositions 1. Implemented strategies as “dynamic happenings” 2. Implementation occurs in different contexts 3. Implementation of a specific action does not preclude very similar action being repeated in a later time period 4. Implementation involves multiple actors and multiple firms 5. Implementation strategy research indicates that contingent thinking is the dominant form for framing problems, evaluation options, and making choices 6. Most thinking occurs unconsciously and informants edit what they think they know when talking with an interviewer
Fig. 1.
Propositions Relevant to Development of Implemented B2B Strategy Theory.
2. Implementation occurs in contexts and contexts differ substantially by location, time, props, and people present – case-based implementation strategy data needs to record information about the industry and multifirm context to achieve accuracy. 3. Implementation of a specific action does not preclude very similar action being repeated in a later time period; feedback loops occur often in reallife implementation – systems dynamics studies are particularly useful for estimating feedback influences in B2B implementation strategy research. 4. Implementation involves multiple actors (e.g., executives, consultants, sales representatives, buyers) and multiple firms; accurate B2B implementation strategy research requires interviews and observing interactions of different participants in the process rather than relying on the views of one informant because participant’s views of what is happening and outcomes usually vary widely. 5. Implementation strategy research indicates that contingent, not compensatory, thinking is the dominant form of controlled (conscious) mechanism for framing problems, evaluation options, and making choices – research applying seven-point scales, compensatory rules, and key success factors fails to capture real-life conjunctural, multiple path, and what-if processes in B2B implemented strategies. 6. Because most thinking occurs unconsciously (Wilson, 2002) and informants edit what they think they know when talking with an interviewer, multiple interviews of the same informant on different days and requests for top-of-mind automatic responses to what-if situations are important aids for learning both implicit and explicit beliefs and attitudes of implementation participants.
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Additional perspectives highlight types and frequency of B2B marketingbuyer behavior. Loewenstein (2001, p. 503) stresses that ‘‘people do not seem to have all-purpose algorithms for deciding how to behave. Instead, they often seem to behave according to a two-stage process in which they first attempt to figure out what kind of situation they are in and then adopt choice rules that seem appropriate for that situation.’’ Similarly, Herbert Simon provides the metaphor of a pair of scissors for thinking about rational behavior: one blade has to do with the psychology of the organism and the other with the structure of the environment (reported in Goldstein et al., 2002, p. 173). For achieving deep understanding of the process and outcomes of the multiple meetings occurring over weeks, months, and sometimes years in organizational marketing– buying relationships, the metaphor needs to be expanded to include two or more sets of scissors. This point builds on the contingent nature in effective selling behavior (Weitz, Sujan, & Sujan, 1986) and the contingent relationships observed in buying behavior (Woodside & Wilson, 2000). Two key points can be drawn from these B2B marketing–buying behavior perspectives. First, each party to the marketing–buying interaction likely would benefit from understanding the nature of contextual influences on the other’s decisions and behaviors. Second, contexts change, evolve, and consequently, ‘‘behavior will change abruptly and radically when the individual’s construal of the situation she is in does change’’ (Loewenstein, 2001, p. 503). In B2B marketing–buying behavior, members of a marketing organization and a buying organization are likely to interact among themselves and with the other organization over several days, week, or months. Consequently, how members in each organization view the context of their interactions and related problems/opportunities likely evolves and/or changes abruptly. Cyert, Simon, and Trow’s (1956) pioneering research provided one of the first detailed reports of such contextual dynamics. In their case study covering an 18-month time period, the buying committee in the organization that they describe became unable to cope with the buying task because of increases in felt risk in the purchase situation. By the end of the case, the decision was made not to buy from any supplier – to flee from the problem. Based on that case this chapter develops an epistemology of knowledge possessed, shared, and reinterpreted between B2B executives (Subjects – S) and researchers interviewing (Interviewers – I) them to seek deeper insights on B2B marketing–buying decision making (see Table 1). B2B researchers seek to unearth deep insights through mining into the subject’s knowledge/beliefs. The expression and reporting of those insights are also affected by the interviewer’s knowledge/beliefs. Multiple iterations
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Table 1. SKT SKU SKC SKCI IKCS IKC IKU IKT
Subject and Researcher (Interviewer) Knowledge/Beliefs.
Subject’s total knowledge/beliefs Subject’s unconscious knowledge/beliefs Subject’s conscious knowledge/beliefs Subject’s conscious knowledge/beliefs reported to interviewer Subject’s conscious knowledge/beliefs not reported by subject but still reported by interviewer Interviewer’s conscious knowledge/beliefs about the subject, reported by interviewer, not by subject Interviewer’s unconscious knowledge/beliefs Interviewer’s total knowledge/beliefs
of interaction between the Subject and Interviewer should enable the Interviewer to unearth more insights that were initially unconscious or seen not relevant to the subject. However, there are also challenges for the Interviewer infusing reported insights with more of their knowledge/beliefs through multiple interactions with the subject. Both the Subject and the Interviewer may recall or check up on insights brought up in previous interactions and report those differently in subsequent interactions. Axiology refers to the nature and types of values underlying research. Axiological discussions frequently emphasize that research can never be value free but must reflect the value judgments of the investigator concerning what topics are interesting, what approaches worthwhile, and what results are important. ‘‘Here, the best we can hope for is that researchers make their values explicit and reveal any personal biases so that readers of their work can take these into account’’ (Holbrook, 1995, p. 185). In this spirit this chapter advocates replacing or at a minimum augmenting the dominant logic of most B2B research. The current B2B dominant research logic by academics relies mainly on: responses to closed-end questions (e.g., 1–7 Likert scales), mail surveys completed by one participant at one organizational level (e.g., senior executives), among marketers only or buying organizations only, data files with less than 30% useable responses, and explicates few details into the contingencies in interorganizational marketing–buying processes. In part, the chapter showcases the now subordinate logic of using openended questions, asked repeatedly to the same persons in two and often multiple, face-to-face settings, in multiple organizations, in both marketing
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and buying organizational units – along with collecting and recording direct observations. The point here is that a general theory of implemented B2B marketingbuyer strategy is moderated by the way decisions are made, expressed, revisited, reinterpreted, extended, and the ‘‘iterativity’’ of research into these decisions. ‘‘Iterativity’’ here means the number interviews/interactions that researchers go through with the decision maker. Such moderation is examined through a diverse range of research methods and B2B researchers have focused on a range of research methodologies that may be used singularly or collectively within case study research strategies. Inevitably B2B marketing–buying activity involves multiple subjects within and across organizations. This complexity represents huge challenges for B2B researchers. Fig. 2 highlights several subjects across manufacturers, distributors, and customers.
Second Distributor in Local Area Carrying M’s product line
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Fig. 2. Field of Study for Business-to-Business Implemented Strategy Research: Persons Usually Found to be Actors in One or More Stages of the Marketing– Buying Process and Examples of Principal Communication Flows. Note: High impact vertical and horizontal communications found within and between organizations. Manufacturer M sales reps talk face-to-face with persons in two levels at least of dealer firm. Dealer sales rep often has communications with three levels in customer organization.
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Application of a networking approach can identify subjects across and within organizations, adding insights on resources and activities between subjects. The IMP Group encourages this approach using case study strategies incorporating a rich and diverse range of research methods and applications. IMP scholars advocate such a paradigm shift to greater adoption of direct research (e.g., see reports by members of the IMP Group, such as Hakansson, 1982; Hakansson & Wootz, 1975; Mo¨ller, 1983).
CONTINGENCY APPROACH ANALYSIS FOR B2B IMPLEMENTED STRATEGIES A contingency approach to researching B2B marketing–buying decision making is often expressed as identifying subjects and their decision making in flowchart form – or decision systems analysis (DSA). Figs. 3–5 illustrate contingency maps of the implemented strategies linking both a marketing organization with each of multiple buying firms. Note that such mapping represents a middle-range theory of implement strategy for one industry – marketing and buying office furniture. Note in Fig. 3 that whether or not the buying organization has budget approval (diamond box number 3) is a relevant issue for both the buying and selling firm early in the process. Data collection resulting in the contingency models represented in Figs. 3–5 include multiple interviews inside 27 buying organizations, attending and observing 20 plus sales rep and buyer meetings, and 30 meetings with sales reps and the sales manager of one office furniture distribution firm (Woodside, 2003). Substantial details of the individual buying processes are not included in the contingency maps as an attempt is made to generalize across the 27 cases. As in the case of a road map, the loss of detail of the immediately surrounding terrain is necessary to learn the major intersections – turning points – and direction being taken across the cases. The resulting maps of the major arteries of purchasing strategies are broad summaries only of the sequences of events, decisions, and interactions that are likely to be found. Some ‘‘direct research’’ (van Maanen, 1979; Mintzberg, 1979) involving participant observation is necessary to gain an in-depth understanding and explanation of real-life organizational purchasing strategies. Fig. 6 illustrates contingency modeling of the buying decision process in another industry. The contingency map is part of Montgomery’s (1975) findings of the contingency process of a supermarket buying committee in
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Office Furniture Contingent Streams in Purchasing Processes. Source: Woodside (2003).
accepting and rejecting carrying new product offerings from manufacturers. In Fig. 6, if the manufacturer has a highly favorable reputation (denoted as 1 versus 2–5 in Fig. 6) and the committee judges the product to be very new (rating of 1 or 2), the decision to accept is reached. Decisions to accept for manufacturers with poor reputations follow a relatively complex path that more often leads to rejection; see Fig. 6 for details. The research by Montgomery and by Woodside (2003) stress a major focus of B2B implemented strategy research – the research favors capturing and reporting complexity over simplification. ‘‘It’s always more complex than it appears to be,’’ is the watchword in implemented strategy research – and complexity varies based on nuances in the contingency branches, some branches lead to more complex steps than others. While ratings appear in Fig. 6, the ratings are really processed in the form of combinations of yes/no binary rules. Montgomery’s findings indicate what professional supermarket buying decisions look like in an external,
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23 Criteria: • Inside track with buyer? • Manufacturer X’s other distributor making similar request? 21 Distributor starts bid preparation
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Contingency Model of Large Order Marketer Bid Preparation and Buyer Award Process. Source: Woodside (2003).
descriptive, decision processes, and do not necessarily match with the descriptions of the processes that managers on the committee might provide – the contingency diagram is Montgomery’s etic interpretation from his observing the committee’s deliberations. Howard and Morgenroth (1968) offer a contingency model of pricing decisions by an oil refinery firm developed from direct observations and document analysis of data collected over a 12-month period; their report includes testing the predictive accuracy of the final version of the model. Woodside and Wilson (2000) provide thick descriptions of the thinking and interaction processes within and between marketing and buying firms of industrial solvents – including bidding, pricing, and buying the solvents. Gladwin (1989) provides training guidance for collecting contingency data using ethnographic methods. Gladwin (1989), Woodside and Samuel (1981), as well as Howard and Morgenroth (1968) stress the need for ‘‘member checking’’ and revising draft contingency maps; such member checking includes taking the draft models back to the informants for comments and suggestions and continuing this
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Small Order Marketing – Purchasing Process. Source: Woodside (2003).
process through multiple rounds until both all informants and the investigator are satisfied as to the accuracy being displayed in the models. Morgenroth (1964) provides a series of redrawn implemented strategy designs that he crafts based on a series of member check reports in this forerun report to Howard and Morgenroth (1968) report. For Woodside and Samuel (1981), this continuing member checking step resulted in Samuel (a mid-level purchasing executive in a multinational firm) becoming Woodside’s co-author on the resulting scholarly publication.
COGNITIVE PERSPECTIVES, SENSEMAKING AND HERMENEUTIC ANALYSIS FOR B2B IMPLEMENTED STRATEGIES A cognitive approach offers rich deep insights into B2B marketing–buying decision making. Researchers attempt ‘‘sensemaking’’ through mapping decision making. Weick (1995) emphasizes that all ‘‘sensemaking’’ is
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Gatekeeper Analysis of Supermarket Buying Committee Decision Making. Source: Montgomery (1975).
retrospective, that is, an individual or organization crafts an understanding of their lived experiences by reflection. The following question expresses Weick’s view of sensemaking, ‘‘How do I know what I think until I hear what I say and see what I’ve done?’’ Because sensemaking is the basis for individual’s mental models of reality and the causes of reality, research in B2B decision making that provides thick descriptions of participants’ views of what happened and why (i.e., emic sensemaking) complements and extends decision-making researchers’ views of decisions–actions–outcomes (i.e., etic sensemaking). From a postdecision and post-action perspective, emic sensemaking reports often
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indicate more structure and rationality while etic sensemaking of the same events more often describe anarchical (e.g., Cohen, March, & Olsen, 1972; Hickson, Butler, Cray, Mallory, & Wilson, 1986) and iterative sequences (Mintzberg, Raisinghani, & Theoret, 1976) with feedback loops and delays occurring often in organizational decision making. Langley, Mintzberg, Pitcher, Posada, and Saint-Macary (1995) advocate conceptually and empirically ‘‘opening-up decision making’’ to: (1) the ambiguities that surround the relationship between commitment and action; (2) the critical role of insight in transcending the bounds of cerebral rationality – the need to examine organization history, experience, affect, and inspiration (e.g., will and vision); (3) dynamic linkages so that isolated traces of single decisions come to be seen as interwoven networks of issues; and (4) using multiple research perspectives and tools – such as zooming in closer to people and processes under study and zooming out to exploring the ramifications of issue networks and the histories of organizations over long time periods (e.g., Pettigrew, 1975). Regarding their fourth suggestion, Langley et al. (1995) advocate focusing on people and personalities not just events and on reanalyzing previously analyzed decision processes not just new ones. Compared to Weick’s (1995) view, these researchers advocate embracing a more catholic view for research on decision making: As researchers, we may all be acutely aware of the boundedness of cerebral rationality. But that does not justify us in promoting methods that deny the existence of ambiguity, insight, interaction. Decision making is prospective, introspective, and retrospective, sporadically rational, ultimately affective, and altogether imaginatively unbounded. (Langley et al., 1995, p. 277)
Dynamic (re)sensemaking research includes data collection on more recent sensemaking of both earlier decisions-actions as well as earlier sensemaking. As such, dynamic sensemaking relates to and advances from hermeneutical research – achieving understanding of a specific situationproblem-decision-action-outcome by reflective analysis of autonomous text including resolving contradictions among and between individual elements (micro-events) and the entire process under study, which is, applying a hermeneutical circle. Examples of autonomous text include news clips of McNamara’s speeches during the 1960s and Harvard Business School cases describing the histories of enterprises along with specific problems-actionsoutcomes for these firms. See Arnold and Fischer (1994) and Thompson (1997) for thorough discussions on hermeneutics in consumer research and for deriving marketing insights.
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The hermeneutical framework that this chapter describes incorporates the use of decision systems analysis (DSA, see Hulbert, Farley, Howard, 1972; Woodside, 2003), cognitive mapping (see Huff and Huff, 2000), computer software based text analysis (e.g., NVivo and TACT (Textual Analysis Computing Tools, 1997)), and the long interview method (McCracken, 1988) for mapping the mental models of the participants in specific decisionmaking processes as well as mapping the immediate, feedback, and downstream influences of decisions–actions–outcomes. DSA includes conducting several rounds of interviews with multiple informants to construct accurate flowcharts of information and decision systems within organizations. Several rounds of interviews are necessary to integrate the views of the multiple participants involved in the decisionmaking process under study and to validate the work of the researchers; thus, the informants examine drafts of the flowcharts and text descriptions of the researchers over several interviews until both the informants and researchers are satisfied as to the accuracy and completeness of model of the information and decision system (see Capon & Hulbert, 1975; Howard, Hulbert, & Farley, 1975; Hulbert, 2003). TACT (1997) and NVivo (QSR International, 2002) are computer software programs that enable text coding and mapping for displaying complex associations of concepts. Such displays are created to examine both the details and gestalt of the mental models as expressed in the text. Cognitive mapping includes creating models of the thinking processes of individuals and/or organizations (see Huff, 1990). Huff and Huff (2000) present an in-depth case study of how cognitive mapping can provide foundation data for building system dynamic models and running simulations of how organizations respond to environmental changes and engage successfully and unsuccessfully in new product development. The long-interview method includes selecting informants based on their known involvement and participation in the issue under study, using probing open-ended questioning methods, and displaying documents and other exhibits (e.g., possibly products) during the interview as topics of discussion; long interviews range from 2 to 4 hours. The long interview aims to acquire a deep understanding and description of the lived experiences, beliefs, attitudes, and intentions in informants’ own words (e.g., an emic perspective of what happened and why it happened). While applying the framework is useful in itself for achieving deep understanding and description of the issue under study; the proposed application of hermeneutic interpretation represents valuable data collection methods for building dynamic models of complex systems (cf., Maani &
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Maharaj, 2004; Sterman, 2000, p. 80). A basic tenant in the systems dynamics literature is that feedback loops, delays, hidden demons (i.e., positive relationships in feedback loops creating vicious versus virtuous cycles of system failure), and unintended (often downstream) consequences go unnoticed by most participants involved in a strategic business unit (e.g., see Hall, 1976; Maani & Maharaj, 2004). The proposals for applying advances in hermeneutical interpretations provide useful insights and tools for explicating these implicit loops, delays, demons, and consequences. Fig. 7 summarizes the multiple iterations associated with the hermeneutic analysis framework outlined here for exploring B2B marketing–buying decision making. For a full discussion on the advanced hermeneutic analysis framework and its application to a B2B environment see Woodside, Pattinson, and Miller (2005) and Pattinson and Woodside (2007). Fig. 8 summarizes the initial levels of understanding and research on B2B decision making. Level I depicts B2B executives descriptions and explanations of what happened and why it happened for a focal decision-making issue. For example, a quote or summary description of what an executive reports happened when she met with the president of a customer firm is an example of Level I data. Note in Fig. 7 that Level I shows that mental models are crafted and revised during the decision and action under study – at time t.
Advanced Hermeneutic Analysis Framework • Iterations – First Level: • EMIC1 (Internal View of Decision Maker)
– Second Level: • ETIC1 (Researcher Who Wrote First Story)
– Third Level: • ETIC2 (Researcher Who Developed DSA Package)
– Fourth Level: • EMIC2 (View of Decision Maker After Reviewing DSA Package)
– Fifth Level: • ETIC3 (Revision of DSA Package By Researcher Who Developed DSA Package)
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Advanced Hermeneutic Analysis Framework for B2B Implemented STRATEGY Research.
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The executive’s later (t þ 1) interpretation and reporting of what happened represents both a summary and an elaboration of the mental models originating during the decisions-actions. What the executive reports happened to herself and colleagues is subject to self-editing, memory failure, and personal prejudices and biases. Research on the stories (i.e., narrative structure and contents of a participant’s sensemaking about what happened and why) support the conclusion that each participant quickly crafts a summary holistic story of what happened, why it happened, and the consequences of the process (see Gergen & Gergen, 1986). If asked, each participant in the process under study is capable of retrieving and discussing some details of people, places, and events. Most case study research reports are based, in part, on participants’ holistic stories and retrieved details of the process and outcomes. Storytelling reflects both plot and sensemaking by participants and case study researchers. The reported stories are data files for hermeneutical interpretation. The current (early 21st century) dominant logic in B2B research stops at collecting Level I data. Examples include Internet or mail survey reports on executives’ beliefs, attitudes, and descriptions of decisions concerning a specific issue without the researcher acquiring independent confirmatory data. These survey data are usually analyzed using empirical positivistic
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(e.g., analysis of variance and structural equation modeling) in efficacy tests of relationships among proposed antecedent, mediating, and outcome variables. Arrow a in Fig. 7 represents a summary of what the participants in the enterprise report about the decision process under study. Level II recognizes that a participant’s t þ 1 interpretation of what happened a week, month, or year ago, and why it happened, is just one view of specific situation, decisions, and outcomes. This participant’s emic view is not taken to reflect a complete nor a completely accurate account of reality. The researcher provides commentary and often judgments (arrow c) on the participant’s sensemaking account. The research collects (arrow b) additional interviews with other participants and/or analyzes documents to confirm, deny, and elaborate on the participant’s report. Most B2B case study research reflects the use of Level II research (see Woodside & Wilson, 2003). Level III research reflects Langley et al.’s (1995, p. 277) ‘‘suggestion 5, reanalyze previously analyzed decision processes not just new ones.’’ Thus, Level III provides two etic interpretations and involved an additional time period and most likely independent researchers. Note in Fig. 7 that etic 2 interpretations include commentaries of etic 1, emic 1, and mental models and decision process at the time of the original situation – relationships d, f, and e, respectively. Level III analysis may include chronologically mapping events of the decision process and outcomes reported by the etic 1 researcher, that is, the etic 2 researcher may conduct decision systems analysis (DSA, see Howard et al., 1975) based on the text of the original case study done by the etic 1 researcher. Also, Level III analysis may include content analysis assisted by software tools (e.g., TACT, 1997 and NVivo QSR International, 2002). The research steps in the Red Hat case study reported below include DSA, TACT, and NVivo. Level IV analysis includes a new round of interviewing of one or more of participants involved in the case study reported by the etic 1 researcher. Level IV research includes asking these participants a series of questions concerning several issues: The accuracy of the whole text and the key individual elements in the text in the etic 1 case study report. Possible revisions in the sensemaking expressions by participants that the etic 1 case study reports. The accuracy and possible improvements in etic 2 interpretations (arrow g in Fig. 7). Updating of decisions and events subsequent to the process reported in the original etic 1 case study.
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The label for Level IV is advanced hermeneutic interpretation 1 because the analysis includes gaining an emic interpretation of (1) the decision process reported in the original case study, (2) the etic 1 case study report, and (3) the etic 2 draft sensemaking views of the whole case and details of the process (e.g., via DSA, NVivo, and TACT). Collecting emic data of interpretation of prior etic interpretations is found in several studies in the marketing and contemporary anthropology literatures (e.g., see Howard & Morgenroth, 1968; Whyte, 1943). Howard and Morgenroth (1968) demonstrate collecting data from several rounds of interviews with participants after making revisions to their DSA models following each of these interviews and showing the revisions to the participants for correcting and further elaborations. Fig. 8 adds an etic 3 interpretation that focuses on revising sensemaking views of all prior interpretations based especially on the evaluations and additional updated data from the emic 2 data. If ambiguities, paradoxes, and conflicting views still exist and may be potentially resolvable, additional rounds of emic and etic analysis may be conducted. Referring again to Woodside and Samuel (1981), such additional rounds of interpretations may lead to a participant becoming a co-author to a case study report. Woodside et al.(2005) provide details of applying (re)sensemaking that follows from a Harvard Business School case of the Red Hat Corporation – an innovative software packaging firm; see Woodside et al. (2005) for details. Fig. 9 provides some of the details of Woodside et al.’s (2005) (re)sensemaking study. n
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SYSTEM DYNAMICS RESEARCH ON B2B IMPLEMENTED STRATEGIES System dynamics research tools are relevant for describing, simulating, and predicting alternative outcomes for alternative B2B implemented strategies. System dynamics research recognizes that all contexts represent systems (see Senge, 1990) and systems include over-determined outcomes, hidden/ ignored variables, and pathways (i.e., ‘‘hidden demons’’) to outcomes, feedback loops, and time delays between action and outcomes. Fig. 10 depicts a rudimentary system dynamics model for B2B new product contexts. Fig. 10 indicates several of the core propositions to system dynamics that the previous paragraph briefly describes. Key findings from building and testing simulation models of B2B implemented strategies include the following points (from Woodside, 2006): Organizations, for example, business firms and government departments, unconsciously seek to build in deviation-dampening mechanisms (i.e. variables and relationships) into their systems. This natural bias against change and controlling deviation-amplifying loops is the result of seeking efficiency, the need to reduce uncertainty, and the biological urge toward habit, felt time constraints, and the natural mental inability to handle complex relationships. Because these forces against change are strong and usually unrecognized, most organizations experience long periods (i.e. several years) of steadystate (i.e. deviation dampening) behavior. Decision makers often learn to reject superior innovations that come along (Woodside, 1996). Because seemingly minor paths in a system often include powerful leverage points affecting long-run goals (i.e. profit levels), the following systems-thinking proposition is wise to embrace: all loops in a system have substantial influence.
The fate of a system depends on it achieving an overall deviationdampening effect. This effect occurs when the total system contains an odd number of negative loops. A negative loop is a closed loop that contains an odd number of negative causal relationships. ‘‘If the system contains an even number of negative loops, then their effects will cancel one another, and the remaining positive cycles will amplify whatever deviations may occur’’ (Weick, 1979, p. 76). The natural, implicit, human tendency is to ignore systems thinking and to focus on one-directional linkages, ignoring downstream impacts of actions and feedback loops all together. Systems are simply too complex for each of us to comprehend without making them explicit and empirically testing their operations (see Dyson, 1990; Hall, Aitchison, & Kocay, 1991; Lindbloom, 1959; Senge, 1990; Sterman, 2000; Weick, 1979).
1993-1999 Initial mental model: •Bundle a set of applications to enable Linux to be easily installed and maintained (1st version released in 1993) 1993-2001. Extended mental model: •Initial mental model with Release dates for Red Linux V3 (Set-Dec 1995); V4(Oct 1996); V6 (May 1995) •Shift to focus on providing Red Hat Linux to major computer hardware vendors for their Enterprise/Large Account Customers (e.g. IBM, Dell); revenues mainly from providing technical support to large customers Decisions-actions: •Start-up of support tools for managing Linux open-source operating; market launch without beta test; RDC of 6 new releases; Absorbed into Red Hat” in 1995 on 3rd release (became Red Hat Linux Version 1); IPO August 1999; Red Hat V7 (Sep 2000); V8 (Sep 2002)
Emic 1 view: •“The one unique thing we could do that no else could do was, for the first time, we were giving control of the operating system to the user” •Successful IPO of a company marketing software that supported free products (i.e. the Linux open-source operating system) •“Not bad for a company that gives its products away for free” •Would an open-source development approach work for developing applications that could run on Red Hat’s Linux operating system?
Etic 1 view: •Account of Evolution of Open-Source Software Philosophy – Creation of Free Software Foundation (late 1980’s); GNU Project (late 1980’s); General Public License; Emergence of Open-Source Initiative (OSI – late 1990’s) •Account of Linus Torvalds’ RDC of Linux •Description of Emergence of Red Hat •Description of Red Hat’s application development and distribution
Fig. 10. Level V Analysis for Red Hat. All system dynamic models rationally must include at least one balancing (negative) loop; otherwise the model ‘‘explodes’’ or an organizational death spiral occurs. Thus, the model adds inertia to reflect how increases business performance leads to high satisfaction with status quo (see Christenson, 2002) and consequently, to declines in market turbulence until the next spurt from entrepreneurial orientation sets off a new cycle of innovativeness that leads to higher market turbulence.
Etic 3 view: Etic 2 views validated plus: • Extension of open-source approach to developing advanced software applications • Open-source approach applied to software-based information products and services • “Open-source” marketing concept
Etic 2 view: •New open-source development community and philosophy •Red Hat created from Complimentary Needs Between Ewing &Young •Importance of Internet for open-source community application development •Red Hat’s approach to symbiotic interaction with open-source development community
Emic 2 view: •Reaffirmed all of Emic 1 view with extensions for opensource philosophy at Red Hat and Red’s symbiotic relation with the open-source community • 90 percent of Red Hat’s Revenues for 2001 came from support activities •Red Hat is like a fabricator such as Boeing – it assembles over 800 applications of which only about 35-40 are actually created by Red Hat •Red Hat is building up their 3rd party and ISV Programs •Perhaps Red Hat may develop a marketing structure similar to established software houses
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Unfortunately, the system dynamics literature continues to be ignored by most members of the industrial marketing and purchasing scholarly research community. Given the substantial insights for improving B2B implemented strategies that result from system dynamic models of such strategies and the rapidly improving system dynamics modeling tools, a hopeful prediction is an end to this ignorance early in the 21st century.
HISTORICAL RESEARCH METHOD APPLIED TO B2B IMPLEMENTED STRATEGIES Tellis and Golder (2002) describe four unique advantages for applying the historical method for studying B2B implemented strategies in the field of market pioneer behavior (also see Christensen & Raynor, 2003). First, the historical method is the best approach to uncover contemporaneous reports about firms and their strategies in new markets. Tellis and Golder (2002) report evidence recorded at the same time an important event actually occurred in each new product development category for their report. Second, applying the historical method collects evidence presented from independent reporters – these records reflect unbiased perspectives in contrast with company reports that tend to promote an individual company’s interests. Third, rich details of events are uncovered through the historical method. These details enabled Tellis and Golder to evaluate the relative success of multiple firms – pioneers, early entrants, and late entrants – giving a more complete view of the implemented strategies of all major firms in a changing industry than prior research. Fourth, collecting data on multiple firms provides a matched-sample benefit from historical research that sets such studies apart from nearly all other studies of business success and failure. Research using the dominant logic of written surveys filled out by one executive per firm with response rates low by any reasonable standard cannot compete with the data richness and accuracy of the historical method. The stream of research by Christensen and his colleagues confirms this conclusion – see Christensen and Raynor (2003) for references and descriptions to studies in this stream. Future research is likely to include the combining of the historical method and the (re)sensemaking methods that Woodside et al. (2005) advance. This prediction awaits development by scholars trained in both research streams.
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THE COMPARATIVE METHOD IN RESEARCH ON B2B IMPLEMENTED STRATEGIES The comparative method in sociology documents the occurrence of multiple paths to a binary outcome (e.g. success versus failure). The method proposes that no one state in a path is necessary and sufficient for reaching one outcome versus the other outcome (e.g., Christensen (1997) documents the (rare) occurrence of a large market share firm using the older dominant logic technology successfully transforming to the radically new, disruptive technology and avoiding failure). The comparative method focuses on identifying and examining the several chain of events (i.e., from an empirical positivism perspective, the multiplevariable interaction effects) rather than the main effects leading to each final outcome state (i.e., success versus failure). No ‘‘statistical outliers’’ exist from a comparative method viewpoint; the objective is to go deep enough to uncover all the observed distinctive and general sequences of event interactions leading to each outcome state. Ranking of critical success factors (e.g., van der Panne, van Beers, & Kleinknecht, 2003) is anathema to the comparative method because specific cases do occur where a ‘‘critical success factor’’ is absent and the firm is still able to introduce a new product successfully built on a radically new technology platform. Christensen’s (1997) report of a firm overcoming its own corporate cultural resistance to such innovation because of great perseverance of one senior executive is one example. For radical NPD the comparative method requires the researcher to focus attention on observed combinations of present versus absent streams of conditions, events, and decisions implemented that result in success and failure. The comparative method view is that several specific streams (i.e., interactions among several implemented decisions and events) lead to success and other specific streams lead to failure. Applying the comparative method in B2B implemented strategies focusing on radical innovation research includes application of the historical method (Golder, 2000) to learn the nitty-gritty details of not only what happened and why, but also the downstream impacts of the stream of events that occurred following early developments of successful working models of breakthrough innovations. Problems and delays occur and must be overcome in transforming working models into prototypes that the firm manufactures with all the radically unique technological benefits incorporated with few defects; problems and delays occur and must be overcome in gaining customer
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awareness and diffusing knowledge and willingness to test the radical product innovation; and problems, delays, and competitive counterattacks occur in achieving takeoff customer adoption rates of such new products. Application of the comparative method requires more thorough data collection and the reporting of the streams of specific implemented decisions and events compared to survey research using fixed-point responses to closed-end questions. Golder (2000) and Christensen (1997) describe the steps involved that fit the logic of the comparative method. While beyond the aims of this chapter, the point is useful to make that data from comparative method research on disruptive NPD are helpful for building system dynamic models of NPD processes (e.g., Repenning, 2001; Sterman, 2000). Both approaches recognize that some specific tasks are completed in parallel while others are completed in sequence and delays, feedback loops of failure and success, and external shocks and lucky circumstances occur during the cycle of innovation-manufacturing-diffusion-adoption/rejection (IMDAR). The resulting data and reports from comparative/historical method studies are useful for developing prototypes of business dynamics models. While the literature offers separate descriptions of processes such as innovation, manufacturing, diffusion, and adoption/rejection. An integrated examination of these processes is possible – with attention to how these processes are linked together in a series of events and feedback loops, contributes to our understanding and improved managerial relevance of the findings. Based on a review of case research field studies that provide thick descriptions of NPD built on radically new technological platforms, Fig. 11 summarizes a general IMDAR model. Fig. 11 is a general framework that illustrates frequently occurring do-loops in IMDAR processes. Note in Fig. 11 that each of the five stages in IMDAR includes a combination of unique and generalized micro-stages. The proposed IMDAR framework includes the specific propositions that (1) obstacles and failing occur within each of the five major IMDAR stages; (2) searching/finding/using the help of third parties (Biemans, 1991) occurs for each IMDAR stage, including the rejection stage. For example, in the rejection stage, advocates of the installed-base technology may seek the help of third-party inspectors and trade association leaders to prevent the testing of a really new product based on a revolutionary new technology; overcoming such a powerful combination of advocates for the existing installed-base technology usually requires consorted efforts by the advocates of the superior new technology (Woodside, 1996). Note in Fig. 12 that some degree or form of rejection of a radically new product–process is proposed before adoption occurs.
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Policy Map for Crafting System Dynamics Models of B2B Implemented Strategies. Note: All system dynamic models rationally must include at least one balancing (negative) loop; otherwise the model ‘‘explodes’’ or an organizational death spiral occurs. Thus, the model adds inertial to reflect how increases in business performance leads to high satisfaction with the status quo (see Christenson, 2002) and consequently, to declines in market turbulence until the next spurt from entrepreneurial orientation sets off a new cycle of innovativeness that leads to higher market turbulence. Fig. 11.
Powerful forces rise up to prevent, delay, and subvert the testing and acceptance of a really new product developed using a superior new technology. To overcome such formidable obstacles often requires dramatic ‘‘organizational improvization’’ (Gemu¨nden, Heydebreck, & Herden, 1992) and participation by a combination of on-site senior executives, performance testing the new technology (Woodside, 1996). Fig. 12 includes the presence of several types of champions: product champions within four of the five specific IMDAR stages, with mavens shown as a product champion in the diffusion stage and opposor representing an anti-champion in the rejection stage. In addition, opinion leaders and network champions play supportive roles. Mavens stimulate others to adopt the superior new product based on their expertise and communication abilities –even if mavens do not seek the role of champion the adoption of the superior new product, others seek them out for advice and demonstration. Mavens represent Roger’s (1995) consumer innovators and are related to von Hippel’s lead users (von Hippel, 1988).
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Lead users are very advanced mavens – they are consumers who recognize how a new technology offers unique benefits versus the currently available products built on the currently dominating technology. Lead users also envision potential designs for a new product built using the new technology. Lead users are often frustrated engineers working for manufacturing firms whose senior executives are ignoring their advice to begin research on developing new products built on the new technology platform; such lead users often quit and form their own companies with the help of third parties (Biemans, 1991; Christensen, 1997). Opposed to these champions of the new product, rejecters are persons championing the status quo; they stress financial, performance, and personal risks of adopting the new product and often are responsible for lengthy delays and outright rejection of the new product in many customer firms – particularly the large users of products manufactured using the older and still dominating technology (Woodside, 1996). Opinion leaders are not mavens; an opinion leader is vigilant of decisions implemented by mavens and seeks mavens out for advice about adopting
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new technologies. The opinion leader often relishes her early adopter and community leader roles in communicating the superior performance benefits and lower total lifetime costs of adopting new products. Mavens focus on personal satisfaction and internal company recognition of doing things better, faster, and cheaper using the new technology based products. Network champions (Woodside, 1996) serve as communication and support functions across organizations and IMDAR stages. While network champions can emerge from more than one organization, they often include a supply chain executive or an industrial manufacturer agent who stimulates unique multi-organizational meetings and special financing to demonstrate the superior performance of the new product to customers in local markets. In some cases, innovative and entrepreneurial users may also act as network champions. Note that Fig. 12 includes two network champions to indicate the difficulty of any one party to span all the IMDAR stages effectively. The presence of network champions likely reduces the time necessary to achieve market take-off for the radically new product from several to one or two decades. Fig. 12 includes death as an end node possibility to illustrate the point that both manufacturers and customer firms do face extinction if they effectively reject superior new products. Underwood, the leading typewriter manufacturer in 1923 in the US, is an excellent case study of such behavior (see Golder, 2000). Senge’s (1990) core proposition that the world consists of circle relationships instead of linear relationships is a central proposition of the proposed IMDAR framework. Senge (1990) points to the need for systems thinking and research on the causes and nature of system do-loops to achieve deep understanding on the restraints keeping us from adopting superior new technologies and behavior. His call for finding the powerful, hidden levers occurring within systems needs to be answered with the adoption of (1) dynamic grounded theories of IMDAR processes, and (2) a combination of data collection methods using longitudinal research designs in B2B implemented strategy research. See Woodside and Biemans (2005) for a B2B implemented strategy research report that tests several propositions in the IMDAR model.
EMERGING VIRTUAL WORLD RESEARCH METHODS ON B2B IMPLEMENTED STRATEGIES Advances in converged digital technology and applications have reached a point where virtual worlds can provide sufficiently powerful environments
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where decision making can be presented as if it was close to a real-world revisitation of decision making. Virtual Worlds such as ‘‘Second-Life’’ and emerging derivatives specifically designed to be focused on B2B contexts allow researchers and decision makers to revisit decisions, events, and locations in highly visual multimedia and interactive ways – and to reconfigure that environment to test and reflect subjects’ – and interviewers’ – knowledge/ beliefs, experiences, and visualization of their decision making. Real-time system recommendation and systems decision making (SDM) as exemplified by Google searching and Amazon recommendations highlight possibilities for these systems when deployed or put in a B2B context, to be a powerful aid in capturing real-time decision making, implemented decision making – and to apply lessons quickly to systems, and management decision making. The emerging Semantic Web will be significant in defining new and sophisticated interpretative research methods, applications, and embedding of actual B2B marketing–buying decision making – and for researchers working in this area.
SUMMARY, CONCLUSION, AND SUGGESTIONS FOR ADDITIONAL WORK This chapter offers proposals for advancing toward a general theory of B2B implement strategy. Such a general theory incorporates time explicitly and advocates recognition of multiple actors with limited explicit knowledge about the thinking and doing processes that occur through time. Consequently, research methods that move the investigator beyond onetime mail surveys or single-respondent per firm studies are necessary – the dominant logic in scholarly B2B research reports is inadequate. B2B investigators need to find and apply new methods to generalize findings beyond the single case study rather than using linear conventional positivistic testing methods. These new methods includes system dynamic modeling, building in degrees-of-freedom in testing theory via case research data (see Wilson & Woodside, 1999), use of the historical research method, ethnographic decision tree modeling, qualitative comparative analysis, and (re)sensemaking research. Fig. 13 highlights a range of research approaches currently used to explore B2B marketing–buying implemented strategy. While some B2B research groups such as the IMP Group are developing and using case study research strategies incorporating multiple and diverse research methods, most B2B researchers and groups need to move to new dominant
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Approaches For Researching Implemented B2B Strategy • • • • • • • • • • • • •
Dominant Logics For B2B Implemented Strategy Research (US v. European Logics?) Mapping Knowledge-Belief (K-B) Contingency Maps Direct Research Thick Descriptions of Thinking and Interaction Processes Redrawn Strategy Design Maps Sensemaking Hermeneutical Framework Long Interview Method System Dynamics Research Historical Research Method Comparative Method Emerging Virtual World Research Methods on B2B Implemented Strategies
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Approaches to Implemented B2B Strategy.
Current B2B Research Dominant Logic: • responses to closed-end questions (e.g., 1-7 Likert scales) • mail surveys completed by one participant at one organizational level (e.g., senior executives) • among marketers only or buying organizations only • data files with less than 30 percent useable responses • explicates few details into the contingencies in interorganizational marketing-buying processes.
Fig. 14.
Proposed B2B Research Logic: • Focus on Layered Case Study Research Strategies • Sensemaking and Mapping • Multiple-Methods • Storytelling Methods • Hermeneutic Analysis • Discourse and Narrative Analysis • Historical and Archival Analysis • Ethnographic Analysis • Discovery and Analysis of Decision-Makers Knowledge and Beliefs; Mental Models (EMIC states) • Recognition of Researchers Influences and Contribution to B2B Analysis (ETIC states) • Development of Rules and Policies and Mapping Through Systems Dynamics • Among decision-makers collaborating or communicating across organizations • Dynamic Analysis • Discussion on application to current and future B2B Strategy development and implementation • Research Iterativity • Emerging B2B Virtual World Research (Simulations, Rich Revisitation) • Semantic Web and it’s Interaction – and contributions to B2B Decision-Making
Current and Proposed B2B Research Logics.
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research logic. Fig. 14 summarizes B2B research logic prevailing at the turn of the century – and emerging logic emerging in the first decade of the new century. The main conclusion from this brief treatise is that these subordinate tools and theoretical proposals will become ubiquitous and perhaps dominant by the end of the second decade of the 21st century. Indeed, there will likely be a developed theory of B2B marketing–buying implemented strategy by the beginning of the third decade. Future investigations need to embrace the goals of capturing complexity and the disruptive dynamics as well as mundane processes in B2B implemented strategies without giving up the quest for generalizing findings beyond the single case study. Several research reports are available in the B2B implemented strategy literature that supports the viability of this proposal.
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CASE STUDY: IDENTIFYING AND EXPLAINING ALTERNATIVE PATHS TO ACCEPTANCE OF NEW PRODUCTS BY SUPERMARKET BUYING COMMITTEES Instructions. Answer the following questions in accord to your study of Fig. 6 in this chapter. 1. List all the possible paths resulting in acceptance by the supermarket buying committee of manufacturers’ new products. To help start your thinking, here is the one path: node 1-node 2-accept. 2. Which path-to-accept is shortest (i.e., includes the fewest nodes) in Fig. 6? 3. Which path is longest in Fig. 6? 4. What explanations (rationales) likely contribute to explaining why the shortest path-to-accept is so short? 5. What explanations (rationales) likely contribute to explaining why the longest path is so long? 6. What is the shortest path to rejection in Fig. 6? 7. What is the longest path to rejection in Fig. 6? 8. Offer explanations (rationales) for the paths in your answers to questions 6 and 7. 9. How does contingency thinking (i.e., ‘‘it depends’’) apply to Fig. 6? 10. What additional figures (exhibits) in Chapter 13 show contingent modeling of thinking in B2B contexts?
