Sensemaking in networks: Using network pictures to understand network change A thesis submitted to The University of Manchester for the degree of PhD in the Faculty of Humanities 2009 Morten Høie Abrahamsen Manchester Business School List of contents Abstract _ 12  Declaration and copyright statement 13  Acknowledgements 14  Chapter 1: Introduction 16  1.1 Preface _ 16  1.2 Framing of the thesis 16  1.3 Empirical context: Norwegian salmon in Japan _ 17  1.4 Theoretical context: Industrial networks, change and network pictures _ 18  1.5 Methodological context: Iterative research design _ 18  1.6 Structure of thesis 21  Chapter 2: Literature Review 26  2.1 Changes in the Japanese seafood distribution _ 26  2.2 Theoretical approaches to change in distribution structures _ 31  2.2.1 Marketing channel literature _ 31  2.2.1.1 Early approaches 32  2.2.1.2 1950-1970: neoclassical economics, functions and cost 32  2.2.1.3 1970-1985: Behavioural approach, power and conflict 33  2.2.1.4 Recent approaches: Transaction Cost Analysis and Agency-theory _ 33  2.2.1.5 Socio-political approach 34  2.2.1.6 Institutional approach 34  2.2.1.7 Influence of external environment on performance _ 35  2.2.1.8 Similar approaches 36  2.2.2 Supply chain management and logistics 38  2.3 Industrial networks _ 40  2.3.1 What are networks? _ 41  2.3.2 The network approach _ 42  2.3.4 Networks and change 43  2.3.4.1 Change vs stability 44  2.3.4.2 Perspectives on the “environment”: Endogenous vs exogenous change _ 45  2.3.4.3 Change in terms of coordination and mobilisation 47  2.3.4.4 Change in terms of structuring and hierarchisation _ 48  2.3.4.5 Change in terms of integration _ 48  2.3.4.6 Confined and connected change 49  2.3.4.7 Incremental and radical change 49  2.3.5 Discrepancy in the literature – introducing Model 51  2.4 Research question 54  Chapter 3: Methodology and research design _ 55  3.1 What is good research design? 55  3.2 Why qualitative methods? _ 59  3.3 What data collection methods are employed in this study? 63  3.3.1 Interviews _ 63  3.3.2 Observation 65  3.3.3 Cognitive mapping 65  Chapter 4: Initial study of Norwegian-Japanese distribution networks _ 67  4.1 Introduction 67  4.2 Methodology 68  4.3 The focal actors: Norwegian exporters 69  4.4 The focal actors: Japanese importers _ 71  4.5 Current import volumes 74  4.6 The traditional fish market system _ 74  4.6.1 Ways to conceptualise the distribution system 76  4.6.2 Actor bonds and relationship duration 80  4.6.3 Investment in the relationship: Presence in Japan 81  4.6.4 Number of actors _ 82  4.6.5 Relationship structure: contracts, negotiations and terms 84  4.6.6 Relationship atmosphere _ 84  4.6.7 Activity links 86  4.6.8 Key resource employed: Fresh salmon 88  4.6.9 Resource substitution – frozen vs fresh salmon _ 88  4.7 Changes in the Japanese seafood distribution _ 90  4.8 The direct or alternative distribution system _ 94  4.8.1 Actor bonds, activity links and resource ties in the direct system 96  4.8.2 Relationship atmosphere and tensions 97  4.8.3 Exporters critical to the traditional system 100  4.8.4 Diminishing supplier attention _ 101  4.8.5 Implications for importers of fresh salmon 103  4.8.6 Resource change from fresh to frozen salmon _ 105  4.9 Introducing a conceptual model explaining network change _ 106  4.9.1 Analysing some key changes using Model 107  4.9.2 Limitations of Model _ 113  4.10 Revised research question _ 114  Chapter 5: The role of perceptions - Literature review and a revised conceptual model _ 115  5.1 Introduction _ 115  5.2 Perspectives of change in networks 115  5.3 Arriving at Model 116  5.3.1 Applying Model to Minicase _ 120  5.3.2 Change, resistance and stability 121  5.3.3 Change and perceptions of change 121  5.3.4 The concept of identity _ 124  5.3.5 Subjective interpretation 125  5.3.6 Network pictures: One way of interpreting perceptions 126  5.3.7 Change in the idea structure _ 131  5.3.8 Change in the idea structure vs change in the activated structure 132  5.3.9 Changes in the interface: An example _ 133  5.3.10 Final version of Model 2: An aggregate conceptual model of network change _ 136  5.3.11 Limitations of Model 138  5.4 Arriving at model 3: Change interfaces and change episodes _ 139  5.4.1 Confronting and conforming structures: An example 140  5.4.2 Conforming and confronting structures vs idea structures 140  Chapter 6: Arriving at a conceptual model for analysing network change _ 146  6.1 Introduction _ 146  6.2 Testing model - Methodology 147  6.3 Testing Model - Pre-analysis _ 150  6.4 Arriving at model 153  6.5 What is sensemaking? 156  6.6 Testing model using template analysis _ 160  6.6.1 Testing initial template 161  6.6.2 Coding data at the actor, dyad and network level 163  6.6.3 Explaining change density - Introducing the initial dottogram 165  6.7 Creating the revised template – going behind the numbers _ 166  6.7.1 Introducing the extended dottogram 168  Chapter 7: Analysing follow-up study 176  7.0 Introduction 176  7.1 Case – A direct distribution network 182  7.1.1 Description of present network 183  7.1.2 Analysing changes using the initial dottogram 195  7.1.2.1 Norway Salmon _ 195  7.1.2.2 Bluewater Trading _ 195  7.1.2.3 Shoitachi _ 196  7.1.2.4 Asahi Retail 197  7.1.3 Analysing changes using the extended dottogram _ 199  7.1.3.1 Norway Salmon _ 199  7.1.3.2 Bluewater Trading _ 206  7.1.3.3 Shoitachi _ 212  7.1.3.4 Asahi Retail 216  7.1.4 Intra-case analysis of Case 220  7.1.4.1 Comparing the extended dottograms _ 220  7.1.4.2 Where the perceptions differ? 224  7.1.4.3 Brief concluding comments 224  7.2 Case – A fish market network _ 227  Description of present network 228  7.2.2 Analysing changes using the initial dottogram 237  7.2.2.1 Supreme Seafood Norway _ 237  7.2.2.2 Supreme Seafood Japan _ 238  7.2.2.3 Karatsu 238  7.2.2.4 Secondary wholesaler (1) 239  7.2.2.5 Secondary wholesaler (2) 240  7.2.3 Analysing changes using the extended dottogram _ 242  7.2.3.1 Supreme Seafood Norway _ 242  7.2.3.2 Supreme Seafood Japan _ 256  7.2.3.3 Karatsu 265  7.2.3.4 Secondary wholesaler (1) 270  7.2.3.5 Secondary wholesaler (2) 271  7.2.4 Intra-case analysis of Case 272  7.2.4.1 Comparing the templates (Current changes: boxes B and D) _ 272  7.3 Case -A direct distribution network _ 281  7.3.1 Description of present network 282  7.3.2 Analysing changes using the initial dottogram: BCB _ 289  7.3.3 Analysing changes using the extended dottogram _ 290  7.3.4 Brief concluding comments 295  7.4 Case -A direct distribution network _ 297  7.4.1 Description of present network 299  7.2.2 Analysing changes using the initial dottogram 308  7.4.2.1 Tokyo Fisheries: General manager _ 308  7.4.2.2 Tokyo Fisheries: Marketing manager 7.4.2.3 Maruaki _ 7.4.3.2 Tokyo Fisheries: Analysis the extended dottogram (Marketing manager) 7.4.3.3 Maruaki _ 7.4.4 Intra-case analysis of Case _ 7.4.4.1 Comparing the templates (current changes: Box B and D) 7.4.4.1 Comparing the templates (future changes: Box C and E) _ 7.4.4.2 Brief concluding comments _ 309  309  314  321  324  325  328  329  7.5 Case – A traditional distribution network _ 330  7.5.2 Analysing changes using the initial dottogram _ 336  7.5.2.1 Marukawa _ 336  7.5.2.1 Tsukiji market General Director 337  7.5.3 Analysing changes using the extended dottogram 338  7.5.3.1 Marukawa _ 338  7.5.3.2 Tsukiji Director General 341  7.5.4.1 Comparing the extended dottograms : Box B and D _ 350  7.5.4.2 Comparing the extended dottograms: Box C and E _ 350  7.5.4.3 Brief concluding comments _ 350  Chapter 8: Inter-case analysis 352  8.1 Introduction _ 352  8.2 Comparing initial dottograms between the cases _ 353  8.2.1 Comparing initial dottograms: The exporter level 355  8.2.2 Comparing initial dottograms: The importer level 356  8.2.3 Comparing initial dottograms: The primary wholesaler level 357  8.2.4 Comparing initial dottograms: The intermediate wholesaler level 358  8.2.5 Comparing initial dottograms: The retail level _ 359  8.3 Comparing initial dottograms at aggregate level _ 360  8.3.1 Creating an aggregate initial dottogram 362  8.4 Analysing the extended dottograms: Past to present 364  8.5.1 Story no 1: Increasing direct distribution _ 370  8.5.1.1 What is happening? (boxes BA, BD and BN) 373  8.5.1.2 Why is it happening? (boxes DA, DD and DN) 374  8.5.2 Story no 2: The fish market is becoming less powerful 376  8.5.2.1 What is happening? (boxes BA, BD and BN) 377  8.5.2.1 Why is it happening? (boxes DA, DD and DN) 378  8.5.3 Story no 3: Retailers are becoming increasingly powerful _ 379  8.5.3.2 What is happening? (boxes BA, BD and BN) 381  8.5.3.2 Why is it happening? (boxes DA, DD and DN) 381  8.5.4 Story no 4: The fish market still has a role to play 383  8.5.4.1 What is happening? (boxes BA, BD and BN) 385  8.5.4.2 Why is it happening? (boxes DA, DD and DN) 385  8.5.4 Story no 5: The merger between Global Salmon, Rocky Coast and Supreme Seafood 386  8.5.4.1 What is happening? (boxes BA, BD and BN) 391  8.5.4.2 Why is it happening? (boxes DA, DD and DN) 392  8.5.6 Story no 6: The role of salmon _ 393  8.5.6.1 What is happening? (boxes BA, BD and BN) 394  8.5.6.2 Why is it happening? (boxes DA, DD and DN) 395  8.7 Analysing the extended dottograms: Present to future 397  8.8 Five stories of change 399  8.8.1 Story no 1: Further network integration 399  8.8.1.1 What will happen? (Boxes CA, CD and CN) 401  8.8.1.2 Why will it happen? (Boxes EA, ED and EN) _ 402  8.8.2 Story no 2: The fish market will have reduced importance, but will not disappear _ 403  8.8.2.1 What will happen? (Boxes CA, CD and CN) 405  8.8.2.2 Why will it happen? (Boxes EA, ED and EN) _ 406  8.8.3 Story no 3: Retailers will be fewer, but larger 407  8.8.4 Story no 4: Access to new type of actors 409  8.8.4.1 What will happen? (Boxes CA, CD and CN) _ 410  8.8.4.2 Why will it happen? (Boxes EA, ED and EN) 410  8.8.5 Story no 5: The future of fresh salmon in Japan 411  Chapter 9: Contributions and implications 413  9.1 Introduction 413  9.2 Network change: Why they it? _ 413  9.3 Network change: How they it? _ 416  9.3.1 Proposition no 1: Network pictures are dependent upon network position 417  9.3.2 Proposition no 2: Network picture overlap is a function of the interaction intensity between actors 419  9.3.3 Proposition no 3: Network change is achieved by encouraging network picture overlap within the network 420  9.3.4 Proposition no 4: Network change is achieved by establishing relationships with actors having similar network pictures outside the network _ 426  9.3.5 Proposition no 5: Network change is achieved by using power in asymmetrical relationships_ 427  9.3.6 Proposition no 6: Network change is achieved by exploiting activity links or resource ties if these functions are seen as important by other actors 429  9.3.7 Proposition no 7: Network change is resisted by confronting network pictures 431  9.4 Managerial implications 432  9.5 Methodological contributions _ 436  Chapter 10: Evaluating the study - a reflective account 440  10.1 Introduction _ 440  10.2 Defining reflexivity _ 441  10.3 Initial research question _ 443  10.4 Method and sample, preliminary study 445  10.5 Findings from preliminary study 446  10.6 Methods and sample, follow-up study 446  10.7 New model 447  10.8 Data analysis 448  10.9 My network picture 449  10.10 My learning 452  10.10.1 Context 454  10.10.2 Methodology 455  10.10.3 Theory 456  References 458  Appendices _ 471  Word count: 134 403 List of figures Fig 1.1: Robson’s (2002) model of research design _ 19  Fig 1.2: Dubois and Gadde’s (2002) model of systematic combining 20  Fig 1.3: A general model of research design _ 21  Fig 1.4: Research design applied at this study _ 22  Fig 2.1: Distribution channels surrounding central wholesale markets 29  Fig 2.2: Dimensions of change in business networks 43  Fig 2.3: Model explaining interdependence between network change _ 52  Fig 2.4: Illustration of network changes using Model 53  Fig 3.1: Robson’s (2002) model of research design _ 56  Fig 3.2: Data collection methods used throughout study _ 66  Fig 4.1: Layout of the Tsukiji Market _ 75  Fig 4.2: Seafood distribution at Tsukiji _ 77  Fig 4.3: Distribution flow at Tsukiji _ 78  Fig 4.4: Traditional seafood distribution network _ 78  Fig 4.5: Export volumes for Norway’s largest seafood export market 2004 volumes are Jan – June figures 91  Fig 4.6: Comparative export figures of seafood exports to Japan, Denmark and France 91  Fig 4.7: CIF prize comparison of frozen salmon trout vs chilled (fresh) atlantic salmon 92  Fig 4.8: Comparison of historic exchange rates 92  Fig 4.9: Monthly export prices of Norwegian salmon from January 2005 to September 2006 93  Fig 4.10: The direct or alternative system network 95  Fig 4.11: Model explaining interdependence and network change _ 107  Fig 4.12: Model applied on Minicase 109  Fig 4.13: Model applied on Minicase 111  Fig 4.14: Model applied on Minicase 112  Fig 5.1: Model - Change in terms of new and established interaction patterns 117  Fig 5.2: An illustration – part A _ 118  Fig 5.3: An illustration – part B 119  Fig 5.4: An illustration – part C 120  Fig 5.5: Change and resistance to change 121  Fig 5.6: The interface between the activated and the idea structure 123  Fig 5.7: Relationship between managers and researchers network picture _ 128  Fig 5.8: Relationship between networking, network pictures and network outcomes 129  Fig 5.9: Change in terms of new and established idea structures 131  Fig 5.10: Interface between idea structure and activated structure _ 133  Fig 5.11: Connections between idea structure and activated structure 136  Fig 5.12: Relationship between network structure and network change _ 136  Fig 5.13: The interface between confirming and confronting structures 139  Fig 5.14: New idea structures confronting established idea structures: _ 141  Fig 5.15: Model showing the relationship between conforming/confronting structures and established/new idea structures. _ 142  Fig 6.1: Model explaining interface between structures 147  Fig 6.2: Model _ 155  Fig 6.3: Initial template 161  Fig 6.4: Interview data analysed in terms of initial template _ 161  Fig 6.5: Mapping changes on Model using the template _ 162  Fig 6.6: Relationship between managers and researchers network picture _ 163  Fig 6.7: Mapping changes on Model using the initial dottogram Fig 6.8: Final template Fig 6.9: Transcribed data analysed in terms of final template Fig 6.10: Detailed account of changes mapped using Model Fig 6.11: The process of arriving at the initial and extended dottogram Fig 6.12: Grouping the changes according to one particular theme Fig 6.13: Grouping the changes according to all emerging themes Fig 6.14: Changes grouped in extended dottogram Fig 6.15: Process arriving at extended dottogram _ Fig 7.1: Sample of the follow-up study presented as a network picture Fig 7.2: Relationship between managers and researchers network picture Fig 7.3: Traditional seafood distribution network _ Fig 7.4: The direct or alternative system network _ Fig 7.5: Sample presented in Case _ Fig 7.6: Norway Salmon’s initial dottogram _ Fig 7.7: Bluewater Trading’s initial dottogram _ Fig 7.8: Shoitachi’s initial dottogram _ Fig 7.9: Asahi Retail’s initial dottogram Fig 7.10: Initial and extended dottogram of Norway Salmon Fig 7.11: Norway Salmon’s extended dottogram Fig 7.12: Bluewater Trading’s extended dottogram Fig 7.13: Shoitachi’s extended dottogram _ Fig 7.14: Asahi Retail’s extended dottogram _ Fig 7.15.: Sample presented in Case Fig 7.16: Supreme Seafood Norway’s dottogram _ Fig 7.17: Supreme Seafood Japan’s initial dottogram Fig 7.18: Karatsu’s initial dottogram Fig 7.19: Secondary wholesaler (1)’s initial dottogram _ Fig 7.20: Secondary wholesaler (2)’s initial dottogram _ Fig 7.21: Supreme Seafood Norway’s extended dottogram _ Fig 7.22: Supreme Seafood Japan’s extended dottogram _ Fig 7.23: Karatsu’s extended dottogram Fig 7.24: Secondary wholesaler (1)’s extended dottogram Fig 7.25: Secondary wholesaler (2)’s extended dottogram Fig 7.26: Sample presented in Case Fig 7.27: BCB’s initial dottogram _ Fig 7.28: BCB’s extended dottogram _ Fig 7.29: Sample presented in Case Fig 7.30: Tokyo Fisheries’ (general manager) initial dottogram Fig 7.31: Tokyo Fisheries’ (marketing manager) initial dottogram Fig 7.32: Maruaki’s initial dottogram Fig 7.33: Tokyo Fisheries (General manager’s) extended dottogram Fig 7.34: Tokyo Fisheries (Marketing manager’s) extended dottogram Fig 7.35: Maruaki’s extended dottogram Fig 7.36: Sample presented in Case Fig 7.37: Marukawa’s initial dottogram _ Fig 7.38: Director general’s initial dottogram Fig 7.39: Marukawa ’s extended dottogram Fig 7.40: Tsukiji Director General’s extended dottogram _ Fig 8.1: Aggregate network 165  167  168  168  170  171  171  173  174  179  180  180  181  182  195  195  196  197  198  199  206  212  216  227  237  238  238  239  240  243  257  265  270  271  281  289  290  297  308  309  309  311  314  321  330  336  337  338  341  353  Fig 8.2: Norway Salmon’s initial dottogram 355  Fig 8.3: Supreme Seafood Norway’s initial dottogram 355  Fig 8.4: Bluewater’s initial dottogram _ 356  Fig 8.5: Supreme Seafood Japan’s initial dottogram 356  Fig 8.6: Tokyo Fisheries (G)’s initial dottogram _ 356  Fig 8.7: Tokyo Fisheries (M)’s initial dottogram 356  Fig 8.8: Karatsu’s initial dottogram _ 357  Fig 8.9: Marukawa’s initial dottogram 357  Fig 8.10: Tsukiji Director General’s initial dottogram 357  Fig 8.11: Shoitachi’s initial dottogram 358  Fig 8.12: Secondary wholesaler (2)’s initial dottogram _ 358  Fig 8.13: Secondary wholesaler (1)’s initial dottogram _ 358  Fig 8.14: Asahi Retail’s initial dottogram 359  Fig 8.15: BCB’s initial dottogram _ 359  Fig 8.16: Maruaki’s initial dottogram _ 359  Fig 8.17: A presentation of all initial dottograms identified in this study 360  Fig 8.18: Aggregate initial dottogram for total sample 363  Fig 8.19: Part of Norway Salmon’s extended dottogram 365  Fig 9.1: Relationship between intensity of interaction and degree of overlapping network pictures _ 419  Fig 9.2: Relationship between network pictures and network position 421  Fig 9.3: Relationship between ability to change and degree of overlapping network pictures 423  Fig 9.4: Relationship between ability to manage change and network picture overlap over time 425  Fig 9.5: Change options depending on relationship characteristic _ 433  Fig 10.1: Research process ¨ 443  Fig 10.2: Traditional network picture featured in preliminary study _ 450  Fig 10.3: Direct distribution network picture featured in preliminary study 450  Fig 10.4: Aggregated network picture featured in follow-up study 451  Fig 10.5: The dottogram model applied to my learning process _ 453  Fig 10.6: Past, present and future of seafood distribution 454  10 503 504 505 506 507 508 509 510 511 512 513 514 515 Appendix F: Mapping changes on Model using the template, Norway Salmon 516 517 ... author of this thesis (including any appendices and/or schedules to this thesis) owns any copyright in it (the “Copyright”) and s/he has given The University of Manchester the right to use such... appear at the start of each chapter, guiding the reader through the thesis 25 Chapter 2: Literature Review Ch Ch Content Introduction Literature review Ch Ch Methodology and research design Initial... circumnavigate the globe, it changed the history of the world forever 1.2 Framing of the thesis This thesis aims to analyse the development of buyer-seller relationships in networks It uses the industrial