1 interorganisational relationship transformation in a global virtual community clusters, networks...

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Interorganisational Relationship Transformation in a Global Virtual Community

Clusters, Networks & Alliances in the Telecommunication Sector

11 June 2003

Dr. Christopher J. IbbottVodafone Global Products & Services Limited

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Introduction

Introduction to the organisations in the case study

Pre-existing supplier relationships are multiple and local

Customer objective: supply cost synergies

Harmonise globally the in-country supplier relationships

Cellular network infrastructure

High cost of acquisition with high vendor switching costs


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Pre-existing interorganisational relationships


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AustraliaG reeceHollandUK

UK Holland G reece Australia

Supply Unit O ther corporate functions - e.g. HQ , R&D, etc.

Supplier organisation

Corporate governance O R equity portfo lio m anagem ent

Customer organisation

100% ownedsubsidiaries

G lobal portfo lio ofequity interests

D irect in-country (local) interorganisational relationships w ith non-m ediated com m unication

Indirect interorganisational (virtual) relationship w irth m ediated com m unication

Direct (virtual) non-m ediated and w ith in-organisation relationships

Com panies and/or functions w ith in an organisation

Local in-country interorganisational relationships

Scope of the supplier and custom er gloablly d ispersed organisations

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The Globalisation Approach

A process-oriented journey paradigm (Inns, 1996)

Guided in Experiential process executed as situated change (Orlikowski and Hofman, 1997; Orlikowski, 1996):

One that can accommodate the unexpected dynamically and yet remain focussed on the objectiveORAn ongoing improvisation enacted by organisational actors trying to make sense of and act coherently in the world

A unique and leading industry initiative

No plansCustomer financial (synergy) objectiveJoint agreement to a strategy of globalisation


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The Experiential Journey

Study period: January 1999 to September 2000

The journey however continued thereafter to apply this model in additional supplier relationships

Punctuated by (significant) background change

A merger (June 1999)An acquisition (April 2000) with public commitment to a range of synergies inclusive of those from infrastructure

My role as researcher and practitioner:

Initially Director, IT and Programme Management (incl. SCM)Co-leader (with supplier person) of globalisation initiativeIn July 2000 transferred to Global leading to current role


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The Early Beginning

February 1999 inaugural meeting with UK as the lead (having the greatest expenditure) plus Holland, Greece, Australia

All subsidiaries of the customer and supplier organisations

Through the merger then acquisition went on to include Albania, Egypt, Fiji, Germany, Ireland, Japan, Portugal, Romania, Spain, and Switzerland (now includes Affiliates)

Decision to engage in the globalisation initiative taken by the local management of each operator = ‘voluntary act’


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Interorganisational Information System

Set initially at the strategic level (Bultje and Wijk, 1998)

Holland leadership as a virtual work stream

Introduction of a concept named eRelationship (Ibbott, 2001)Operationalised by supplier and hosted in StockholmOver 5,000 registered users (31 December 2002)N-dimensional among all of the companies within and between either organisation (customer and/or supplier)

An open environment (Lipnack and Stamps, 1997):

That advocates providing essential information to everyone in the organisation is one to contribute to trust to the environmentSocial capital is the structure of relations between and among actors, individual or organisation


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The Transformation Towards Globalisation

Global Supply Chain Management (GSCM) meetings:

Centre of collective leadershipInitiation of virtual workstreamsMeta-influence over the operatorsMulti-culturalNon-hierarchical horizontal organisationGlobal virtual community

Supplemented by presentations to management globally and locally by me often accompanied by a supplier person

Club News and eRelationship publications sponsored by the supplier for communication within the organisations


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Outcomes

An IS supported global collaboration model

‘Backbone’ is the Global Virtual Catalyst (GSCM forum)

Multicultural community comprising customer & supplier actors

Sub-communities around virtual workstreams initiatives

Workstreams separately within and between the organisations

Actors of hierarchical positions combining in a non-hierarchical community


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SupplierGlobalisation

Virtual Leadership

Supply Unit Other corporate functions S1 Sn

CustomerGlobalisation

Virtual Leadership

Other corporate functions C1 Cn

eRelationshipGlobal Interorganisational Groupware

Customer organisation Global Virtual Team participants

Supplier organisation Global Virtual Team participants

Supplier Organisation

Customer Organisation

GlobalVirtual

Catalyst

(S1-C1) ... (Sn-Cn) represent supplier and customer globally dispersed co-country resident companies in 1 to n countries

Supplier or customer globally dispersed virtual organisations

Companies and/or functions within an organisation

Local in-country interorganisational relationship

eRelationship - Global Interorganisational Groupware

Multi-level Global Virtual Catalyst for the interorganisational virtual team initiatives

Supplier and/or customer multi-level global inter-company and interorganisational virtual team participants

Company/functional links to multi-level interorganisational and/or inter-company virtual team intiatives

Non-mediated interoganisational and/or inter-company global communication

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eRelationship Strategy Extracts

…must reflect the entire global relationship, in all its aspects, between Vodafone and Supplier

…becomes the natural primary source of information and communication between the organisations, and that such use is not constrained by time, structure and location

…mutual requirements for changes in process, practices, and organisations

…is crucial to the sustainable support of all the global virtual workstreams and initiatives


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Conceptual eRelationship EvolutionV

alu

e

Penetration (Processes x Users)

Static Web

DynamicInformation(One-Way)

Collaboration(Two-Way)

Commerce(Transactions)


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Mutual Strategy

eRelationship“Journey”


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Collaboration Layer- Document Library/Exchange, - News, - Discussions, - Voting, - Comm’s (Webcasts)

Design

- NPD- Marketing- Supplier info- Roadmaps

- Project planning- Forums- Documentation- News/status- Reporting- Rollout

- Clubbing- Upcoming bids- Supplier KPIs- post RFQ

- Negotiate & Contract- Contract management- GFA & CoA- Pricebooks & release mgmt- Opportunity identification

- Cataloguing(Products/Services/Spare parts/Training)- Configurator- OrderCreation/Avail./Approval/Tracking/History- Reporting- Forecasting

-Delivery- Tracking/Status- Confirmation- Licence Management (Key provision, Tracking)

- Special development or configuration

- Invoice generation- Inqiury / Status

- Technical support- Online manuals- Knowledge Base- Issue resolution- Help Desk- Emergency info- Software patches- Training (History / Programmes / Online courses / Evaluation / Reporting)- Returns & Repairs- Managed Services

Planning Sourcing Negotiation

ProcurementFulfillment &Deployment

PaymentServices &

Support

Enabling TheSupply Chain

Process


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Theoretical Support for the OutcomesTheoretical support in the concept of Teamnets (Lipnack and Stamps, 1993) experienced here in the GSCM forum:

Networks of teams that cross-conventional boundaries and will improve horizontal relationships whilst complementing or co-existing with the traditional vertical hierarchy - they cross boundaries and fewer bosses and more leadersTeams: small groups of people who work with focus, motivation and skill to achieve shared goalsNetworks: disparate groups of people and groups that ‘link’ to work together on a common goal

Critical edge for dealing with speed in the new decentralised, globalised economy:Power: benefit of the power of the part and the power of the wholeSpeed: multiple decision-making leaders working in parallel on different parts of the problem

Flexibility: highly ‘plastic’, they configure and re-configure to the needs of the moment

Optimise the benefit for the entire network or meta-management (Mowshowitz, 1997); the systematic ability to switch ‘satisfier’ …


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Reflections

Recognition of the asymmetric nature of the synergy benefits

Stimulation of the transformational momentum

Vest transformational leadership in management

Transformational leaders are “Characterised by the ability to bring about change, innovation, and entrepreneurship. Transformational leaders motivate followers not just to follow them personally but (also) to believe in the vision of corporate transformation, to recognise the need for revitalisation, to sign on for the new vision, and help institutionalise the new organisational process” (Daft, 2000)

Collective anchor for successful transformation

Meta-management (Mowshowitz, 1997): the management of virtually organised tasks, beyond the individual organisation (or company) level, in order to optimise the benefit for the entire networkGSCM: multi-cultural, multi-level, horizontal organisational momentum


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Reflections (continued)Multi-company and organisation virtual teaming

An effective pace realised in a radical transformation (Gallivan et al, 1994)Joint customer-supplier in-country leadershipDistributed and non-central inclusive approach to execution

The dynamics of leadership verses observer/contributor

Systematic ability to switch satisfiers in a decision environment of bounded rationality (Mowshowitz, 1997)

Coevolution on interorganisational IS, eRelationship

“the evolution of two or more interdependent species (or activities) each adapting to changes in the other” (The American Heritage Dictionary fo the English Language, Fourth Edition) Be flexible at the country level in the implementation of operational interfaces


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Conceptual Generalisations or Learnings

IS Supported Global Collaboration Model

Does not demonstrate relationship dynamics, trust and motivation; a passive representation?

Stimulation and motivation in achieving transformation:

Trust between all partiesPositive relationshipsMutually respected motivation

Trust as evidenced in the GSCM and the virtual workstreams:

Where members believe in the character, ability, integrity, familiarity and morality of each other (Ishaya and Macaulay, 1999)An individual’s confidence in the goodwill of others in a given group, and the belief that the other’s will make efforts consistent with the groups goals (Ring and Van de Ven, 1994)


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Conceptual Generalisations or Learnings (continued)

Organisational identification may be the critical glue linking virtual workers and organisations

AND

Strength of identification determines some critical beliefs and behaviours (Wiesenfeld, Raghuram and Garud, 1998) :

Interpersonal trustThe desire to remain with the organisationThe willingness to cooperate with othersTo accept organisational goals as their ownWillingness to perform extra-role behaviours


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Conceptual Generalisations or Learnings (continued)

A (an organisational) transformation is more likely (to be successful) when leaders empower (or delegate to) key people and trust them to find ways to realise a vision through development of team activities (Nutt and Backoff, 1997)

Leaders should be “on tap, but not on top”

Radical change is defined as “the replacement of the status quo with a new order of things and as a result may create serious disruptions in structures, processes, operations, knowledge and morale” (Gallivan, et al, 1994)

The pace of implementing change (rapid versus gradual) should be distinguished, at least conceptually, from the nature of the change (radical versus incremental), and the two considered as separate choices for the change agent


11 June 2003

1 interorganisational relationship transformation in a global virtual community clusters, networks...

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