Industrial Marketing Management 39 (2010) 917–924

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Industrial Marketing Management

Temporality of resource adjustments in business networks during severeeconomic recession

Per Andersson ⁎, Lars-Gunnar MattssonStockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden

⁎ Corresponding author.E-mail addresses: Per.Andersson@hhs.se (P. Anderss

Lars-Gunnar.Mattsson@hhs.se (L.-G. Mattsson).

0019-8501/$ – see front matter © 2010 Elsevier Inc. Aldoi:10.1016/j.indmarman.2010.06.011

a b s t r a c t

a r t i c l e i n f o

Article history:Received 4 June 2009Received in revised form 9 April 2010Accepted 19 May 2010Available online 17 July 2010

Keywords:TemporalityEconomic recessionStrategic actionsResource adjustmentsBusiness networksNetwork orientation

Business cycles are not a new phenomenon. Firms have in the past found ways to, more or less successfully,adjust their resources to such cyclical changes. However, the combination of a global crisis in financialmarkets and a severe down turn in demand on globally interdependent markets in the “real” economy isunprecedented which suggests that established business practices to handle cyclical variations arechallenged. In this article we focus on temporal aspects of resource adjustments, taking into account alsonetwork interdependencies in contemporary markets. We develop a conceptual framework towardsunderstanding how business actors construct temporality of resource adjustment activities. We relatetemporal orientation of actors to temporal profiles of activities, seeing them as both influenced by actors'network orientation.

on),

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© 2010 Elsevier Inc. All rights reserved.

“Financial crisis Stalled too many customers CEO no more”

Jonathan Schwartz, Former CEO, Sun Microsystems announces hisdeparture with a Haiku poem.

1. Introduction

Business cycles are not a new phenomenon. Downturns andupturns have come and gone as long as economic history researchknows. However, the combination of the financial crisis and thedownturn of demand in globally strongly interdependent economies,erupting in 2008, is unprecedented. As firms in the Fall of 2008 beganto adjust to the quite abrupt downturn of demand for their productsand services, they did that in circumstances that were different fromthose during earlier downturns. The reorganisation of firms, ofproduction systems and of relationships in markets during the lastdecades in terms of e.g. globalisation, out-sourcing strategies andstrategic partnering has mainly occurred during growth periods andhas served to increase interdependencies between actors. Resourceadjustments by one actor, therefore to an increasing extent, affect andare affected by adjustment activities by other actors, even those indistant locations and belonging to different industries. The severeproblems in the financial sector also support our argument thatbusiness practices that were effective during earlier downturns mightbe less valid in the present situation. We do not aim to answer if a

specific resource adjustment practice is more or less effective thananother, only to contribute a conceptual framework for understandinghow temporal aspects of resource adjustment are constructed bybusiness actors in times of adversity.

By resource adjustment we mean adjustment of the quantity andquality of the firm's own resources as well as of resources supplied byother firms. Since we apply a markets-as-networks perspective ongovernance of “real markets”, resources controlled by one firm are,directly and indirectly, dependent on and coordinated with resourcescontrolled by other firms. Resource adjustments by individual actorsare therefore more or less explicitly coordinated with resourceadjustments by other actors, that to an important extent are involvedin exchange relationships.

We focus on temporality of strategic actions, i.e. activities thatchange or stabilize relationships in networks. Temporality of oneactor's strategic action is in a network perspective related totemporality also of other actors' strategic actions. Two examplesshowing temporal interdependencies between strategic actions are“merger waves” and spread of “lean production”-ideas that empha-size outsourcing and JIT logistics.

This paper draws attention to how temporality is intimatelyinterlinked with firms' strategic behavior during the crisis/recession.We assume that various dimensions of, shifts in and controversies abouttemporality will surface during periods of radical contextual change.

2. Purpose and disposition

Our purpose is to develop a conceptual framework to analyzetemporality of strategic actions aimed at resource adjustments in

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times of widespread economic adversity (financial crisis andeconomic recession) and to discuss research and managementimplications related to this conceptual framework. The disposition ofthe paper is as follows. First, wemotivate why temporality of resourceadjustment is important. Second, we briefly introduce our two centraldimensions of temporality, temporal orientation of actors andtemporal profile of activities. Third, we exemplify how temporalityand resource adjustment enters in business practice and in recentmanagement literature. Fourth, we present an analytical modellinking temporality, network orientation and strategic action to thebusiness network context. We end the paper with discussion offurther research and implications for business management.

3. Why focus on temporality of resource adjustments?

There is uncertainty about the temporal nature of this specificbusiness cycle and therefore also of temporality of the adjustments,e.g. when, with what speed and for how long resources should beadjusted. Since actors are dependent on other actors' resources,specific adjustment activities, such as decrease in production or delayof an investment project, need to be, coordinated in the network andfuture effects of the adjustments considered.

Temporality of resource adjustments to business cycles affectsnetwork structure and business relationships. For instance, an actoronly adjusting to thedownturnmightbe apt topress its suppliers to lowerits prices or switch to suppliers able to sell at the lowest price. An actorcovering the entire cycle, on the other hand will consider how action inthe downturnwill affect supplier relations in the upturnwith reference toinnovations involving the suppliers and preservation and furtherdevelopment of effective supplier networks in the long run (Klint, 1985).

A related issue is how timing and duration of an investment projectduring a downturn affect availability of resources ready to be used in afollowing upturn. Themost frequent adjustment is to diminish the useof resources (internal and/or external). That can be achieved byvarious strategic actions, e.g. diminishing capacity utilization, re-negotiation of prices and order volumes, switching suppliers,withdrawing from markets, selling off or closing down capacities,delaying or abolishing investment projects. However, adjustmentsmight also involve increasing resources to take advantage of differenttypes of opportunities, e.g. acquiring resources when the price is low,developing new products in anticipation of a coming upturn.Managing very urgent financial problems within the next fewmonthsmight dominate the strategic actions, often coupled with efforts toachieve rapid cost cutting in supplier networks. In addition, effectsfrom the economic recession might also change companies' view oftheir historical traditions. After the first fewmonths of attention to theurgent (financial) matters of the present or near future, somecompanies might start questioning their business traditions, movinginto a phase of self-critical, self-reflective behavior. Should wecontinue on this historical path? What is our historical tradition inthis field? Is this the field we want to be in also in the future? To sumup, one important effect of times of economic recession and financialcrisis seem to be to upset a number of stable, temporal structures androutines established during earlier, more “normal” times.

4. In focus: two central dimensions of temporality

In this paper we are concerned with the temporal aspects ofadjustment of resources to general and wide-spread fluctuations ineconomic activities. Adjustments of internal and external resourceutilisation and development are part of business practices involvingcoordination in network contexts. We argue that such coordination isdependent on:

• temporal orientation of actors, and• temporal profile of activities.

These two dimensions appear as central in much research ontemporality of business actions, as referred to in Andersson, andMattsson (2005).

Temporal orientation refers to perceptions and interpretations ofthe market, including market dynamics. Included in actors' temporalorientation is, in our analysis, consideration for different timehorizons, i.e. how far in the future and how far in the past actors areoriented (Sztompka, 1993; Pieters, & Verplanken, 1991) and withwhat urgency short or long term horizons are considered. Actors' timeorientation also includes the vantage point — orientation from aposition in the past, in the present or in the future, and the viewingdirection (towards the past, the present or the future).

Temporal orientationmightdiffer,moreor less, betweenactors, due totheir position in the firm and in themarket, their experiences, cognitions,strategic intentions etc. Temporal orientation is thus also influenced byspatial dimensions of the perceived market, i.e. in our perspective, thenetwork. We refer to such perceptions and cognitions as the actors'network orientation. This concept will later be further developed.

Temporal profile, the second concept, captures the overall temporalcharacteristics of an activity e.g. a strategic action The term wasintroduced by Sztompka (1993) who stated that “…every social eventor social change has its own ‘temporal profile’, a combination of fourtemporal characteristics: sequential structure, duration, localizationin a wider sequences, and repeatedness or uniqueness…” (p.55). Inorganization and strategic management research, (e.g. Bluedorn, &Denhardt, 1988; Ancona, Okhuysen, & Perlow, 2001) similar ideashave been presented. A number of universal dimensions (functions)of time are elaborated by Sztompka (1993). Six general functions aresuggested, related to: synchronization, coordination, sequencing,timing, measuring and differentiating. To sum up, a strategic actioncan be assumed to have its own particular temporal profile consistingof a set of temporal dimensions linking the activities to time.Temporal profiles in terms of timing, speed, duration and sequencing,has been applied to M & A processes in Andersson, & Mattsson(2005;2007).

We consider temporal aspects of actor behaviour as interdepen-dent, constructed, and as manifested in actors' market practices (cf.Kjellberg, & Helgesson, 2007; Andersson, & Mattsson, 2010). Thus, anactor's temporal orientation influences its own and other, connectedactors' perceptions of, and actions related to, time. Furthermore, thetemporal profiles of activities are strongly linked to the actors'exchange activities including strategic actions that influence networkstructure and processes.

Fluctuations in economic activities, whether they come asrecurrent business cycles or rapid downturns, will be associatedwith shifts in both the temporal orientation of actors and temporalprofiles of activities. We argue, for instance, that each actor considerssequences of actions that are influenced by constructed views of e.g.time horizons. Furthermore, that this sequence is contingent onchanges in the context, and thus also on other, connected actors'temporal constructions.

In a network perspective, strategic actions in markets are seen asinterconnected which means that firms must in respect to time relatetheir actions to the past, concurrent and potential future processesthat connect firms in the market and to temporal profiles of activities.

5. Analyses in business practice and in management literature

5.1. An illustration from business practice: Wärtsilä reports

Wärtsilä, a globally active Finnish engineering firm, supplier topower generating and shipping industries reports in the beginning of2009 on some temporal aspects of the financial crisis/economicdownturn of relevance for our arguments (www.Webfinanser.com2009-01-30) Wärtsilä had experienced that: ”The ship power marketdemand abruptly stopped during the last quarter due to the financial

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crisis. Even if declining demand had been visible a long time themarket was surprised by the speed of decline.”

The following is our selection of excerpts, our italics and our linksto temporal concepts within brackets:

“Difficult to foresee how serious and long thegeneraldownturnwill bebut effects for Wärtsilä will be limited because even if cancellationswill occur there is a substantial order stock for powerplantequipmentand services.” (time horizon, sequencing, duration)“Changes in the scheduling of shipyard activities affect the schedulingin the entire supply chain.” (sequencing, timing, synchronization)“Demand for services continue to be positive. Wärtsilä offersproducts and service for the entire life cycle of the installedequipment by a globally dispersed service organization. Customersneed to upgrade the economic and environmental effectiveness oftechnologically more advanced plants and fulfill the strongerenvironmental requirements.” (time horizon, viewing direction,sequencing, timing, differentiation)“Big order stock in the beginning of the downturn, flexiblemanufacturing process, stability of the demand for services and theglobal network connections give Wärtsilä time to react to marketfluctuations.” (time horizon, vantage point, sequencing, duration,)“The fundamental aspects of the power plant industry are un-changed but the financial crisis will likely influence the timing of theorders.” (time horizon, viewing direction, timing)“Statefinancedpowergeneratingprojects increaseaspart of economicstimuluspackagesbutprimarily for infra structuralprojects andnot forindustrial self generating projects.” (differentiation, sequencing)“Difficult to judge when the upturn will come, and how quickly thebalance between the marin capacity supply and demand will beachieved, as a result of increased demand and scrapping of old ships.”(time horizon, viewing direction, speed, sequencing)

The above aspects of adjustment during economic recession show acomplicated and diverse process with reference to access to andinterpretation of information, interaction within and between firms,type of exchange relationships between suppliers and customers,interdependencies in extended supply networks, financial restrictionsand government sponsored projects. Temporal aspects of resourceadjustments by the individual firm are explicit but coordination of suchadjustments between actors are mostly only implicitly referred to.

5.2. Temporality in management literature on the recession

The economic recession has inspired a number of articles inprominent management oriented academic journals such as HarvardBusiness Review and Sloan Management Journal but much less so inmore research oriented academic journals. An exception is the Journalof Customer Behaviour that in June 2009, published a Special Issue on“Marketing in Adversity”. Our search in data bases for articles inresearch journals specializing in marketing, procurement, strategy ororganization resulted only in a couple of references, that in an implicitway focused on temporality of resource adjustment in “real”markets.Long lead times between initiation of research and publication of itsresults serve to explain the meagre result of our search efforts.

The practice oriented, still academically based journals, predom-inantly aims to provide business managers with advice on how tochange their practice during times of economic recession. We canclassify the analyses as focusing on internal or external adjustments,short term or long term adjustments, adjustments related tomarketing management and customer behaviour.

5.3. Internal/external adjustments

Articles with a company internal focus on leadership and humanrelations (e.g. Heifetz, Grashow, & Linsky, 2009; Sutton, 2009).

Handling lay-offs and downsizing, how to keep employees, jobsecurity issues etc. become central managerial problems. Zatzick,Marks, and Iverson (2009, Fall) characterize personnel resourceadjustments as short term reactive or long term pro-active,distinguishing also between control oriented and commitmentoriented downsizing behavior. Long term, proactive and commitmentoriented firms recognize that the personnel is a key asset difficult toreplace. The ability to keep and recruit personnel is crucial, turnover ofpersonnel is costly and downsizing should consider this fact.

Ghemawat (2010) discusses how companies can be managed toovercome adversitywith capacity to respond quickly and constructivelyto crises. Too much of a backward looking cause orientation mightjeopardize the shift to a strict forward looking response orientation.

In managerial articles with an external focus, some authorselaborate the idea that management should avoid getting stuck inan intra-organizational and introvert cost-cutting trap, turninginstead towards a more inter-organizational, market and effective-ness oriented perspective. Reeves (2009) warns that cost cuttingalone is not the most effective way to withstand a downturn. Firmsshould also consider to forge new partnerships and to enter newmarkets during the recession.

Hunt (2009, Summer) argues that since competition is a dynamicprocess in heterogeneousmarkets, managers need to understand howthis heterogeneous context develops differently during the crisis andadapt the strategy to this.

With reference to globalized production systems, Green (2009) isconcerned with how multinational corporations and their manufac-turing partners in emergingmarketsmanage their relationship duringthe global downturn.

Articles with an external focus usually deal with one external actorcategory for each article. Managing issues are related to consumers orretailers or suppliers or competitors, not to actions that relate to anetwork perspective, involving interdependence between the firm infocus and two or more actor categories. Mattsson (2009), however,argues that resource adjustments by the individual firm shouldconsider long term effects of resource dependencies in a widernetwork, including suppliers, customers, competitors and partners.

5.4. Short term vs long term thinking

Even if some authors advocate a quick response to a downturn indemand, such advice is business cycle oriented and therefore considers alonger period than the downturn. Zoltners, Prabhakant, and Lorimer(2006) argue thatfirmsshould adapt their sales andmarketing activitiesto successive changes in their business context, and not as frequently isthe case, too late to avoid radical, short term changes. Navarro (2009)stresses that business actions should be timed in relation to theeconomic downturn as part of a “business cycle orientation”.

The importance of long term thinking in economic recession is amain idea in several articles. Ghemawat (2009) argues for a long termperspective, e.g. as regards human resource practices, strategies andinvestments. It is important to retain a long-term perspective oninvestments also in downturns despite the threat that the financialrisk of investing in this situation overshadows the competitive risk ofnot investing. One needs also to consider time lags in implementingmajor investment programs. According to Hagel et al. (2009), duringsteep recessionmanagers are too obsessed by short term performancegoals. They need to take a long-term evolutionary perspective, inrelation to the ongoing downturn in the economy and adapt toimportant drivers of industrial change, especially development ofdigital infrastructures and public policies.

5.5. Marketing management and customer behaviour

A number of articles discuss how consumers' attitudes andpurchasing behavior are affected by the recession with consequences

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for resource adjustment by the sellers. Flatters, &Wilmott (2009) lookat how the consumers come out of the recession with changedattitudes and behavior and advice firms to be aware of such trends.Quelch, & Jocz (2009) also advice firms to prepare for long term shiftsin consumer values and attitudes. Firms should not make generalaverage cuts in marketing expenditures and investments but adjust tocustomers' shifting needs during recession. Based on similar reason-ing, Kotler, & Casoline (2009) advice against across board cuts duringa recession. Changes in marketing budgets should be guided bystrategic considerations of what makes the company successful in thelong run.

Quelch (2008) advices firms that in times of recession they shouldfocus even more on customer research, maintain marketing spending,adjust product portfolios, support good distributors and drop weakones, upgrade the sales force by recruiting good people sacked byother companies, adjust pricing tactics (including extending credit tolongstanding customers), stress market share (including acquiringweak competitors). It is important to defend the firm's core long termmarketing values against short term financial management's cost andbalance sheet considerations.

How can we sum up the general impressions of the adviceprovided to managers on how to cope with radical economicdownturns? How does such advice treat temporality? Since thearticles deal with a temporal phenomenon they all, of course, have atemporal background. Long-term thinking, as related to our temporalorientation concept and timing and speed, as related to our temporalprofile concept, dominate the advice. What to manage and cope with,rather than more profound analyses of temporality dominate.Admittedly, our selection of articles only come from a few journalsbut we believe that they are fairly representative of analyses inmanagement journals by authors with a management research and/ormanagement practice background.

The analysis by Wärtsilä's management shows how temporalityalso enters explicitly in managerial discourses.Wärtsilä refers more tointerrelations between temporal variables and more of the “construc-tivist” nature of temporality than in the managerial articles. Wesuggest that a business practice perspective on resource adjustmentsin times of adversity by which temporality can be understood associally constructed in specific business contexts would be useful.Referring to Pfeffer (1992) idea that ”Timing is Everything”, in whichhe argues that the timing of strategic actions are important for theoutcome of these actions, we propose a more explicit inclusion of notonly timing, but of temporality in a wider sense into the analyses ofbusiness actions. It is also important to consider that timed actionswill always be directed towards some part of the network oforganizations in which they are situated.

6. Analytical model

Adjustment of resources takes place in dynamic business networksthat are both influencing and influenced by the adjustments. How theindividual actor is related to others influences the type of adjustment,its effects on the network and how resource adjustments arecoordinated with other actors' adjustments. We relate our analysisto the financial crisis and the political actions emanating from thatcrisis. Thus our model, illustrated in Fig. 1 distinguishes the followingset of variables and relationships:

A. Temporality of an actor's resource adjustment, conceptualized astemporal orientation of actors, temporal profile of activities, actor'snetwork orientation and interaction between the three concepts.

B. Temporality of other actors' resource adjustments that due tonetwork structures and processes are interdependent with A.

C. Structure and processes in the market networks (“real” markets,i.e. markets for products and services as contrasted to financialmarkets) in which actors are embedded, activities are performed

and resource adjustments take place. Resource adjustments havenetwork effects.

D. Financial context in which the financial crisis has developed and ishandled and the political context in which political efforts tohandle the crisis take place.

Strategic actions are efforts by actors to affect positions andrelationships in networks. Such actions, in this article aimed atresource adjustments in the financial crisis/economic downturn,may be planned and implemented more or less in interaction withother network actors. However, even if they are conceived andexecuted autonomously by a single actor, they affect the network, e.g.specific supplier–buyer relationships or interdependence betweencompetitors.

As stated in a previous section, temporal orientation concerns anactor's overall construction of time, which becomes manifested in theactor's market practices. Actors have different ways of constructingtime, which becomes reflected in their market behavior. They act withdifferent time horizons (how far in the future or in the past theirperspective reaches, the urgency of short vs long term considera-tions), different viewing directions (towards the past, the present and/or the future), different vantage points in time (in the past, in thepresent and/or in the future). Cf. Sztompka (1993). Temporalorientation influences strategic actions and their temporal profiles.Such actions evolve in direct or indirect interaction with other actorswhose temporal orientation might be different and/or changing, dueto the severe economic downturn.

Actors may react differently to the downturn. Partly that dependson their different temporal orientation in reaction to the crisis. Actor Amight be occupied by ”the present”, limiting the time perspective to anumber of , as urgently considered ”critical actions” in the present,like short time cost cutting, disrupting resource development, even“destroying” resources developed jointly with other actors. Actor B,related to the first one as a customer or a supplier, might be lessaffected by the downturn also acting with a vantage point in thepresent but with a viewing direction more towards the future(foresight), developing resources for the coming upturn, but alsorecognizing the value of the long term interaction in the past with A.To handle the tension between actors A and B it might be necessary toadapt their temporal orientations to each other, in order to coordinatethe actions to avoid for both actors ineffective resource adjustments.For some actors the decline in sales volumes might draw attention tothe near future, delaying investments in new products and changingto a short term perspective on supplier relations. On the other hand,some actors see the crisis as a signal to extend the time horizon,looking both to the future and learn from the past. The literaturereview above suggests that temporal orientation differ between actorsand is an important dimension to consider in adjustment to the crisis.

We argue that construction of actors' temporal orientation to animportant extent is based on how they perceive and understand theirmarket context.We use the concept network orientation to capture howactors perceive and make sense of the network structures andprocesses in which they are embedded. Network orientation includesthe overlapping phenomena of an actor's “network horizon” (how “far”from its own position in the network it considers network conditions asinfluential), its “network theory” (its systematic beliefs and cognitionsabout network dependencies, Johanson & Mattsson 1992) and its“network picture” i.e. its perceptions and cognitions of the specificnetwork, (e.g. Henneberg, Mouzas, & Naudé, 2006). Network orienta-tion, in our framework, also provides a crucial link between an actor'stemporal orientation and the temporal profile of its actions.

As stated previously, actions have temporal profiles, such as timing,duration, speed and sequencing. The dynamics of strategic actions,include the interplay between actors with different temporalorientations (e.g. short or long time horizons) carrying out activitieswith different temporal profiles (e.g. the timing and speed of resource

Fig. 1. Analytical Model. Below we discuss causalities and interdependencies in the model.

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adjustments). Such differences are partly determined by differencesin their network orientation, i.e. in their understanding of networkstructures and processes. Tensions and contradictions betweentemporal profiles of different ongoing resource adjustments mightbe dealt with by efforts to adapt actors' different temporal orienta-tions to each other.

Shifts in temporal orientation of actors can be assumed to haveeffects on the temporal profile of strategic actions (and vice versa).First, we can expect adaptation of the temporal profile in terms ofsequential structure of actions, duration, timing, and speed. Forinstance, orientation towards increased urgency of near termadjustments, favors early timing and speed of decrease in resourceutilization. Second, the shifts in temporal orientations might affecttowards which other counterparts in the network that the strategicactions are directed. For example, a more narrow orientation towardsthe near “present” due to a rapid recession might be coupled witha more one-directed focus towards the suppliers or towards thecustomers. Thus, the resulting strategic actions will be coupled to ashift in network orientation (especially the actor's network horizon).Third, a shift in temporal orientation might change the actual con-tent and focus of the strategic actions influencing also temporalprofiles, e.g. some investment activities might be postponed, therebychanging timing and sequencing.

6.1. Influence of the financial crisis and government policies (D) ontemporality (A)

The financial crisis increases the pressure for short term costcutting, but differently so for different actors depending on theirfinancial situation and network situation. It is likely that the financial

functions in the firm will become more powerful compared to theprocurement and marketing functions. Temporal and networkorientation of managers handling “real” economy issues may bedifferent from temporal and network orientation of managershandling financial issues. For instance, a purchasing manager, whosenetwork orientation emphasizes long term relationships to importantsuppliers, likely has a different temporal orientation than a financialmanager that might focus quarterly economic performance indicatorsand whose network orientation is dominated by ideas about arm'slength transactions with suppliers.

Temporal profiles (e.g. timing and speed) of government stimu-lated actions will differ depending on to what extent they are basedon existing network relationships and available resources or to whatextent they require new constellations of actors and resources.Governments might want already planned projects to start earlier,change sequence between projects and influence their duration toreach societal resource adjustment objectives, usually in terms ofemployment.

6.2. Temporality of adjustments (A and B) and network structures/processes (C)

Strategic actions, according to our definition, are aimed to affectnetwork structures and processes (e.g. a buyer's change of supplier,two actors coordination of R & D efforts). The network is all the timechanging, to an important extent as a combined result of all strategicactions concurrently committed in the network. Therefore, thecontexts for individual actions at time T(0) are not the same as attime T(1). Consideration of network changes, as interpreted accordingto actors' network orientation and temporal orientation may

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therefore influence temporality of activities, e.g. timing, speed andduration of a specific strategic action and coordination betweenactions committed by different network actors. Thus, the overallresource adjustments to the severe economic downturn are to animportant extent a network endogenous process in which the actors'construction of time and network orientation play a major role.

6.3. Influence of the financial crisis and government policies (D) onnetwork structures and processes (C)

The financial crisis disrupts on-going network processes (opera-tions as well as investments), also threatening survival of some actorsor indeed some sectors in an economy. A financial crisis might turninto an industrial crisis. Government measures are both directedtowards over-all stimulus of demand and infusing financial resourcesin the economy. However, there are alsomeasures destined to supportspecific activities and specific actors, thereby also more specificallyaffecting networks. Government efforts to stimulate the economy in arecession includes national, often infra structural, projects, such ascommunication networks and stimulation of demand for specificproducts and services increasing societal welfare, such as a betterenvironment. Furthermore, there is a bias in government support forprojects that use national resources.

7. Issues for research

Empirical observations and discussions in management literaturereferred to in this article and the conceptual framework developed,show that we are dealing with a quite complicated phenomenon thatis in need of further empirical and theoretical research. Below wefollow the logic implied by the model and the arrows in Fig. 1. Sincewe are interested in the process from the initial phase of the crisis tothe return to “normal” times, the arrows are “engaged” all the time.For instance, temporality of strategic actions by business actors(arrow 4) might change between T(0) and T(1) depending on howactivities by financial and political actors between T(0) and T(1) areperceived to influence business conditions.

7.1. Arrow 1

We begin with how the financial and political contexts influencehow business actors construct temporality. That the influence in thisrespect from the financial crisis is important is a proposition thattriggered us to write this article. We have not found any systematicresearch based on this proposition in the literature. Researchquestions to be pursued include what dimensions of temporality areaffected, and how much they are affected, to what extent this differsbetween actors and between activities. As we argued in theintroduction to the article, network interdependencies during thelast decades have increased due to more integrated and spatiallydispersed, even globalized, production systems. This suggests thattemporality dimensions have become more adapted to each other inthe network, e.g. due to implementation of logistic systems. The crisishowever, is likely to, at least initially reduce this adaptation and createuncertainty and ambiguity. How will the globalization trend beaffected?

Diverse signals from financial actors, e.g. rapid and wide-spreadwithdrawal of financial support to business customers, in response tosignals of a recession may result in diverse temporal interpretationsby business actors. Are we to react immediately and urgently? Are weto respond more long-term to the signals? If we need to postpone aninvestment project, how are we going to preserve the access to ownand other actors' resources for the planned project? These shifts intemporal orientation will in turn lead to equally varied responses andadaptations of temporal profiles of activities and routines in the

network, maybe break-up of stable, temporal coordination routinesbetween interdependent actors in the network.

Projects initiated by political actors for short-term effects onresource use will change business actors' temporal orientation forsuch projects from the future to the present. If the project is initiatedby political actors in a crisis situation, it is likely not a priori fullyplanned by business actors, but need to be so in a short time.

7.2. Arrow 2

To know more about the above, it is necessary to delve into thedynamic interaction between the three temporality constructionconcepts. This has been discussed at some length earlier in the articleand shall not be repeated here. For instance, globalization andnetwork coordination of production systems suggests that networkorientation has been more developed in terms of widening networkhorizons, more elaborated network theories, more detailed networkpictures if the firm is taken as a whole. However, network orientationmay differ depending on location and function of individual managersin a firm. The same proposition is valid regarding diversity within afirm as regards temporal orientation. The severe crisis will likelychange the relative influence of different temporal orientations (e.g.between the functions of marketing and finance and betweenheadquarters and subsidiaries). The above mentioned concerns raisequestions to be explored in further research.

7.3. Arrow 3

Since adjustment by one actor has network effects, the temporalinterdependence between adjustments committed by individualactors is an important issue to be pursued in research. Temporaladaptation between actors in times of adversity becomes important.By temporal adaptation we mean to what extent temporal profiles ofactivities, for which some joint outcome is desired, fit each other.Adaptation might happen more or less independently or afteragreements, but due resource heterogeneity it cannot be effectivelyadapted relying on arm's length transactions. The crisis might enterwhen actors are temporally adapted by contractual agreementscovering a specific time period. This adaptation will be difficult topreserve if temporal orientations differ or diverge due to the crisis, e.g.how should a supplier and a buyer relate to a break of contract by thebuyer, due to the crisis? How do individual actors adapt theirtemporal orientation and temporal profiles to readjust resources forjoint participation in rapidly initiated projects by political actors in thecrisis situation?

Information from Wärtsilä above suggests that business relation-ships involving long-term agreements with a service/maintenancecontent and information exchange about changing business condi-tions facilitates resource adjustments. If, and how interacting actorswith a long term temporal orientation, including past, present andfuture viewing direction and a wide network orientation will be ableto adapt temporal profiles of resource adjustment more effectivelythan actors focusing on short term autonomous adjustments with amore narrow network orientation is an issue for research.

7.4. Arrow 4

We are in article not concerned with the specific content ofresource adjustments, only with temporality. However, strategicactions impact on the market network structure and process accordingto arrow 4 a. We need to know more about how timing, speed,duration etc. reshapes positions of actors and relationships betweenactors. Network changes are a combined effect of actions by networkactors. Therefore also arrow 3 enters into the analysis linked toresearch issues as discussed above.

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As network conditions change, during the crisis and the followingnormalization, also actors' construction of temporality might changeas arrow 4 b suggests. Perception and re-interpretation of changes inthe market network might serve to change some aspects of networkorientation and thereby influence the construction of temporality.Thus, research is needed on how temporality of resource adjustmentsby individual actors are related to temporality of concurrent resourceadjustments in the market networks during the crisis/downturn andthe coming upturn/return to “normality”. Cf. Andersson, & Mattsson(2007) which analyses how temporal profiles of strategic actionsduring a merger process interact with temporal profiles of contem-porary network processes.

7.5. Arrow 5

To discuss how financial and political actors relate to the marketnetworks that they perceive to be in adversity symbolized by arrow 5 isquite important but outside the purposes of this article. Here weconsider them as influencing network actors via arrow 1 and arrow 4b.

To understand more about how temporal orientations of actorsand temporal profiles of business action influence strategic action andbusiness market dynamics during times of economic recession, bothdescriptive and conceptual research are needed. Hence, we needmoredescriptions of on-going, rather than completed sequences withknown temporary outcome, to be able to appreciate the uncertainties,conflicts and ambiguities involved in strategic action. We also needmore knowledge about actors' perceptions and cognitions about themarket and its development, i.e. their network orientation. This alsoincludes more knowledge on how actors plan and reconsidersequences, frame episodes and define their speed and duration.Furthermore, the present recession indicates a need for moreknowledge about how actors prepare for, and react to, strategicactions by others, and how interdependencies between strategicactions drive the endogenous market changing processes, e.g.globalization and related processes such as M&As, outsourcing,logistics. In short, more research should be focused on describingand understanding temporality aspects of business practice.

8. Some implications for business

As we have shown in the literature review, there exist many ideasin the management literature on how managers should handle thesevere financial crisis and economic downturn. The authors frequent-ly refer to the need to consider long term perspectives as well as theorganization's external relations. The conceptual framework we havepresented also focuses temporality and business context. We areconcerned with how in business practice temporality is constructedand re-constructed, also related to perception and cognitions aboutthe dynamic business context. The analysis and questions related tothe model in Fig. 1, including the research questions, might be helpfulto management for learning from experiences of resource adjust-ments during the crisis and during the return to “normal” times. (Ofcourse “translation” of some of our theoretical concepts to languagemore easily accessible for managers will be necessary). Someexamples:

– Learning might be applied to discussions about changes inbusiness practice to make the firm better prepared for futuretimes of adversity. Is there a need to change practice? (cf. arrow 1).

– Furthermore, discussions within the firm between managers withdifferent functional responsibilities might clarify how differencesin opinions might be related to differences in temporal orientationand network orientation. Firms can more explicitly considerinterdependencies between different dimensions of temporalprofiles, such as between timing, speed, duration and sequencingof resource adjustment activities. (cf. arrow 2).

– Adaptation between network actors of temporal profiles ofresource adjustment activities can be made more or less effectiveand with more or less interaction between counterparts. Practicesapplied for such adaptation may be scrutinized and alternativesanalyzed related to our framework (cf. arrow 3).

– How do temporal profiles of resource adjustments contribute toreshaping market networks? Could we have influenced this bychanging our temporal profile of specific actions (cf. arrow 4 a)and/or by interaction with others (arrow 3).

– How do the market network changes that we observe, concur-rently with our own actions and over time, affect our owntemporality and business practice in the network? (cf arrow 4b).

In contrast to the management literature referred to, we do notaim to give specific advice about what to do in times of adversity. Ourpurpose is “only” to present a conceptual framework that might aidmanagement to better understand temporal dimensions of strategicactions to adjust resources to major changes in the economy. And,furthermore, also a framework on which academic research ontemporality of business practice might be based.

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Per Andersson is Professor at the Centre for Information and CommunicationResearch (CIC), Stockholm School of Economics. His first research focus was onindustrial distribution and the application of a markets-as-networks perspective onthe dynamics of firms and markets. Since 1993 he has participated in several researchprojects related to mobile communications, which have resulted in published articlesin journals, conference proceedings, and books. Recently initiated projects involveexamining how firms and other organizations co-produce and create values from newmobile technologies and applications. Present research also deals with the interactionbetween market theories and marketing practice, and temporality of marketprocesses.

Lars-Gunnar Mattsson is Professor Emeritus at the Department of Marketing andStrategy at Stockholm School of Economics. His long-term research interest concernsinter-organizational structures and processes in market systems with emphasis ondistribution, internationalization and industrial marketing. During the 70s his researchon industrial markets and interaction with colleagues at Uppsala led him to a networkperspective on markets. Most of his research efforts have since concerned develop-ment and application of a markets-as-networks perspective on the dynamics of firmsand markets. Present research deals with globalization of markets, interactionbetween market theories and marketing practice, and temporality of marketprocesses.