Stroi Network

FUTURE BUSINESS NETWORKS IN RUSSIA

Kalle Kähkönen

• Kalle Kähkönen and Pekka Huovila

FUTURE BUSINESS NETWORKS IN RUSSIA FOR PROJECT BASED BUSINESS

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PROJECT MANAGEMENT

Single project procurementpractices

PROJECT NETWORKSTemporary

PROJECT BUSINESSStrategic sourcing

Long-term view

PROJECTBUSINESS

NETWORKSLong-term

Single project

Manyprojects

Firm Many firms

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How to respond successfully to the demands of changing markets?

VisionBusinessStrategy

BusinessModel

BusinessNetworking

Economic logic to deliver value

Environment,business,

own position

SituationSpecific

Partnering

• Leading Business Network Vision = From traditional business networking towards more agile solutions enabled by new goals and roles.

•Virtual Networks provides highest needed flexibility Aims to create preparedness of participating players to set up a virtual

organisation (VO) to meet market challenges Different levels of commitments and rules possible

Broker centric business networks

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PPPBroker

C

C

Customer system

C C

C

C

Provider system

P

P

PP

P

P

• Broker centred business networks for sales

• Broker as a new role for some existing partner

• Possible focus areas: Joint tender development, Finance agent

• Broker centred production and deliveries

• Broker as a new role for some existing partner

• Possible focus areas: Logistics management broker, subcontractor management broker

TYPES OF BUSINESS NETWORKS

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Virtual Networksprovides enrichning novel approach over various business networks.

Uncompelled Business Networking

1. Long-term business network

2. Short-term project network

3. Business breeding networks (casual-contact networks, Virtual Breeding Environment)

Technology enabled Business Networking4. Online networks (Collaborative Innovation

Network, sales network)

Service oriented Business Networking5. Service organizations (consultants, local agents)

6. Professional associations (knowledge networks)

7. Social/business organizations

Project business networks

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• Different suppliers and other stakeholder brought together around temporary projects in different stages of the production process

strongrelationship

weakrelationship

X

X

Actorparticipatingto currentproject

Actornotparticipatingto currentproject

A

EG

D

C

F

JI

H

B

Project 1

A

EG

D

C

F

JI

H

B

Project 2

time

A

EG

D

C

F

JI

H

B

Project 3

time

Control of business networks – METHOD

7

Control of business networks – EXAMPLE

8

Institutional factors in Russia affecting the creation and maintenance of business networks

• Personal bonding and contacts As key instruments for for the creation and maintenanance inter-personal

relationships of strategic importance

• “Third persons” The interpersonal networks involve persons beyond the simple dyadic

relationship

• Expatriates staying > two years Short staying do not provide opportunities for establishing strong inter-

personal relationships.

• ”Silence” to be avoided Maintaining the relationship and contacts between projects and also

during the project execution is a Russian expectation

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Conclusions and recommendations

• Employ systematic procedures for business network management.

Tools, regular reviews, item in management meeting agenda

• Broker approach for business network development

Use of inter-personal relationships as a catalyst for new kind of business networking

• Malfeasance safeguarding based on long-term relationships

Competitive advantage and difficult to imitate

• Project start-up needs more attention The initial project delivery determines how the relationship can be

strengtened

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