Relationship management and institutional interplay in business networks : essays on case studies from the pharmaceutical industry and healthcare markets

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School of Business | Doctoral thesis (article-based) | Defence date: 2010-12-10
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97, [88] s.
Acta Universitatis oeconomicae Helsingiensis. A, 376
The aim of this explorative dissertation, consisting of four essays and a summary, is to increase understanding of: 1) business networks as the structure of exchange in the healthcare market, 2) related relationship-management practices and 3) their interplay with the institutional environment. This is of topical interest in that Western European and especially the Nordic Beveridge-style healthcare systems, have repeatedly been subject to reform and deregulation in recent years. The public sector is opening up its service production to other providers, and abandoning its monopoly and hierarchical exchange structure. Emerging new technologies, increasing innovation and commercial pressures are changing the constituent relations in the pharmaceutical industry. Business networks are emerging as the new structure of exchange in the healthcare market. So far, environmental conceptualizations have not attracted major interest among researchers investigating the healthcare market, business networks or relationship management. The task-environment view has dominated and the impact of the institutional environment on relationship-management practices and relational structures has not been in focus. Further, neo-institutional theory is conceptually rich, but poor in managerial implication. Research on how institutions, business networks and relationship-management practices interpenetrate and influence each other could enhance understanding of the healthcare industry and its marketization. Industry-specific rules, norms and cognitive templates legitimate the codes of conduct and structures for interaction in markets characterized by knowledge-intensive co-operation and strong institutional order. As a result, various relationships with existing and emerging institutions are crucial to the business, and form the basis of customer-relationshipmanagement practices and the building up of customer portfolios. Relationships in the pharmaceutical business are typically managed across customer-facing functions as portfolios. These functions tend to operate under business-specific institutional rules in the form of legislation and explicit codes of conduct, and with systemic relational structures. iii Dynamic institutional environment, the associated disruptions and institutionalization processes exert pressure on economic actors. This results in changing business networks, and transient perceptions of legitimacy and isomorphism to which the actors adapt by changing their relationship-management practices and restructuring their relationship portfolios. On the other hand, institutional dynamism could create new business opportunities. This study thus underlines the importance of understanding the influence of the dynamics of the institutional environment on business relationships. It also sheds light on how companies can utilize this influence to some extent by acting as institutional entrepreneurs while driving their business aspirations and interests through collective action via strategic networks, for example. However, management can never know for sure or fully control what the counterpart will or can do. Certain types of reactions can only be anticipated especially in the case of business relationships in the public interest with all the potential socio-political aspirations and economic gains (e.g., unmet medical needs and their public funding) involved. The findings of this study indicate that when there is mutual interest and intention, and the ability to jointly develop and utilize relationships as channels of influence and adaptation, it is easier to foresee the reactions of counterparts. The network could then be cooperationally managed, to a certain degree, with reciprocal relationship-management activities drawn from institutionalized mechanisms and arrangements that coordinate and control the market.
Supervising professor
Parvinen, Petri, professor
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