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  Netmodal Management Model

Network's Way of Thinking seen from the Dialectical Perspective

Network approach was developed at the University of Uppsala (Sweden), and is mainly known and taught in Scandinavia. This original Uppsala Model of Internationalisation (Johanson & Vahlne, 1977) was gradually expanded, reshaped, and improved by Jon Johanson & Lars-Gunnar Mattsson (1988), the culmination of which is development of the ARA conception (Actors, Resources, Activities) as a crucial tool for conceptualizing and implementing B2B relationships into business and work reality (Håkan Håkansson & Jan Johanson, 1992). In short, they showed how, by applying the network approach, the interactive properties and aspects of actors, resources, and activities as interdependent dialects can be used to describe and explain the network of established relationships and formed bonds of mutual commitment towards other involved actors based on the implementation of their common goals and interests. In this conception of the implemented network approach, actors are those (partakers) who perform activities, while activities are the act of transforming and transferring available and creatively accessible resources through established relationships at different levels of the company's business policies implementation as well as between involved actors.

This network approach to conducting business is based on the idea of connecting actors (partakers of the established network), their activities and resources into structures, which are externally manifested as networks (Haakansson and Johanson, 1986). Although this idea was attractive, particularly in terms of the time when the network approach was developed, this business approach was not broadly implemented in business practice. In my opinion, the main reason was the lack of adequate management models as well as the narrow specialized focus of this approach on the choice of the most appropriate entry mode into a foreign market. Namely, without the developed model a theoretical concept and approach cannot be applied by managers. Either way, this approach of conducting business as well as the corresponding network way of thinking was a source of inspiration for my last two semesters of the attending master's program in International Business Economics:

  • Implications of Information Technology on the International Strategic Management Process: Virtual Company, (1996)
  • International Netmodal Management Process - Internationalization Strategy for Virtual Software Companies - a Network approach (Master thesis, 1997)

As the end result of my creative efforts, a netmodal management model of business reality was developed (1996). As this model of business reality was based on the network approach and the appropriate way of thinking, this approach was not methodologically considered in the deeper sense of this notion. This was done in the next project study, during the writing of my master's thesis (1997). Although basic ideas of the network's approach were a dimension above the strategic way of thinking, understood in terms of emphasizing the notion - trust between and among actors [(pro)active and creative participants of the established network], this approach to business management has not managed to completely get rid of the burden of a strategic way of thinking, that is, of the potential conflicting aspects of this essentially military (strategic) approach. As one example to think about, just try to imagine from this strategic perspective all the complexity of solving the creative challenges that have arisen as a result of potential conflict situations in the established network of actors, resources and undertaken activities. In other words, compare and then try to solve the creative challenges of business management of relations and relationships in the formed network of actors that are based on mutual trust in order to create new knowledge by sharing the acquired experiences and existing knowledge [dynamization of (national or global) networks] with distribution power within the formed network which is mediated both with (embedded) common interests and with the hidden narrow-minded interests of the network actors involved [stabilization of the (national or global) network], because only in the business, work, and living environment of a stabilized network can the fruits of changed relations and relationship in the network structure be enjoyed (unhindered). If to this is added that numerous external actors and (political, geostrategic, information-media) power centers are indirectly (or even directly) involved, a more complete picture of this both nationally and globally networked environment is obtained.

In short, if it were so easy to solve all these problems and creative challenges through established relationships based on trust and (embedded) common interests, the overall relations of things (reffered to) and relationships within the (global) network would be completely different from the existing ones both in business and work realm. as well as in the sphere of life, generally speaking. It follows from this that when the established relationships and relations in the formed network based on mutual trust and sharing of acquired knowledge and experiences (THESIS) work in conjunction with the proper distribution of power and the embedded common interests of the actors of the network (ANTITHESIS), this positive cooperation and interactivity of the basic aspects of the network (SYNTHESIS) dia their interdependence works in favor of the application of the network business approach (RENEWED THESIS). In other words, this leads to the creation of new knowledge or the deepening of existing knowledge (RENEWED ANTITHESIS), which especially when this newly created knowledge and acquired experiences are re-shared within the framework of an existing started business cycle or a new entrepreneurial venture (SYNTHESIS), this in itself leads to an even easier creation of new knowledge at this higher level of time and space (due to the action of the Synergetic effect: RENEWED THESIS). On the other hand, it is enough to manifest the negative sides of any of these basic aspects of the network (SUPPLEMENTED ANTITHESIS) so that it spreading like an echo within the established (global) network not only reflects negatively (SYNTHESIS) but also cancels all the previously mentioned positive features of this network approach to business management [PROVISIONAL (TEMPORARY) CONCLUSION].

My personal impression is that the Network Approach has not sufficiently emphasized the role of humane individuals [creatively acting as human and human-loving beings] as (pro)active and creative participants in the established network (as well as in the established network structure), especially, during the process of creating (new) knowledge, but rather the role of group entities in the network was put into focus. In other words, the fact that only (great) individuals made all the great creative breakthroughs in the field of creating new knowledge is ignored, while group subjects are only able to deepen, imitate, or (theoretically) elaborate and endlessly retell the created knowledge. On the other hand, one cannot dispute their innate abilities to materially exploit this created knowledge, which in fact does not belong to them. Be that as it may, the (creative) role of "both humane and human-loving" in the established relationships and relations is not sufficiently elaborated in the Network Approach, and in particular, not within the framework of the established network (you cannot see the trees from the forest), nor the problems and obstacles that prevent their more active participation in this Network approach of business management were discussed in depth.

Or put it in another way, reconsidering this from the methodological point of view, the network approach remained in "trouble-waters" of the mob DIA group way of thinking. Keep in mind, despite the eulogies and bragging of supporters of the strategic business management model regarding the achievements of sharing common values of the organizational culture of the group entity, no form of manifestation of the group entity can be individualized or humanized, but only its employees and employers (if even that is achievable). It will be shown later that precisely because of the methodological inconsistencies contained in the network approach, the netmodal approach to business has reached the ultimate (methodological) limits of this business approach. In short, it was explained what prevents overcoming the gap that separates the group way of thinking and the business entities that rest on this foundation from this type of (network) manifestation of the individual way of thinking and related mindset. Or expressed in another way, why is the role of human beings (methodologically) limited both in the Network approach and in the Netmodal approach of conducting business, despite all the improvements made to this original Network approach through this form of manifestation of individualization and humanization of network business actors.

Regardless of the previously said, this methodological approach authentically reflects the existing state and relations in the business and societal environment, and for this reason, can be used as a turning point towards development of a more (human-loving) creatively interactive approach, especially, if this were done for the good of all involved humane (individual) actors (partakers). In my opinion, taking into account the aforementioned problems (and the corresponding challenges) in the existing hard (materialistic and physical) living and business environment, co-destiny and coexistence, understood in the sense of emphasizing the role of cooperation and collaboration of actors within the established network, are ideas which deserve the special attention of creators (of) knowledge. In addition to this, this netmodal approach indicates an important role of the established network structures in the existing hard environment, and a kind of "necessity" for (small) actors ("fishes") to find ways TO STRUCTURE themselves into the (geo-politically) formed network structures (Structure Netmodule), which are established within this hard (natiocratic) environment, based on the strategic way of thinking. On the other hand, if building a network structure would become an end in itself during this networking process, in that case, in the long run, it would be very difficult to distinguish between the structures that were created as a result of the process of structuring through established ties and relationships of network participants, compared to those created, through various types of acquisitions and mergers, driven by a geo-strategic mindset. In other words, the afore presented point of view that ideas of the network approach and the suitable way of thinking are a dimension above the strategic way of thinking would become very blurred and indistinct (and for this reason, as a such one doomed to disappear from the creative scene).

At the same time, there is an opportunity that these two divergent processes, one of them based on the geo-strategic way of thinking, the second one on the network way of thinking, will in future meet each other, and CONVERGE DIALECTICALLY in a point of both time and space. The main idea behind this process of structuring the network, understood in the sense of building relations and relationships through the (pro)active and creative cooperation of network participants, is that mutual trust will gradually take its natural place, changing and replacing with this act the existing hard environment, the main characteristic of which is DISTRUST among the actors of the established network, with a softer and more humane (working, business, living) environment. In other words, there is a hope that the existing hard environment for living, working and doing business will be made more human and human-loving, at least within the boundaries of the established network's structures. In any case, the existing hard (natiocratic) environment does not leave much choice for small actors [states, companies, and particularly, not for (human-loving) individuals (citizens)], if they failed to clearly position and structure themselves within it. To be accelerated, as well as to be made easier this initiated process, international netmodal management (process) put its focus on the humane aspects and issues in the established (global) network.

Let's recall, MARKNET (networked market) is a softer manifestation of the existing hard work, business and life environment, based on mutual coexistence and common fate of actors, where mutual trust, cooperation, and collaboration of actors is essential. In other words, all (key-) partakers in this creatively interacting process were networked in the (global) marknet through established networks structures, consisting of numerous actor-nets, fully conscious of the role of relationships in it, as well as to the relationships oriented and by these incentives driven. Such a MarkNet DIA established network structure, should be gradually developed by applying the international process of netmodal management. As a guiding idea can serve the already observed tendency towards a kind of integration of previously clearly separated concepts: the company (group entity) and the market (mobbed entity), which is best noticeable in the current trend of virtualization of business activities of economic entities. In my opinion, all this is only feasible by bringing into focus the thinking of [humane] creative individuals, both in the role of an employed worker DIA an employer, and as a citizen DIA a consumer, as a member of the family DIA a member of a society (or actor-nets) as well. In other words, in the (distant) future, within the created netmodal life DIA work and business environment, a more vital and agile role of human-loving, creative individuals is necessary. For a successful functioning of it in the work, business and life reality, a considerably greater share of responsibility should be transferred to them. To successfully implement this in business and work practice, employees need to be re-individualized, humanized, and self-empowered both in a mental and spiritual sense to be able to self-control themselves (to become SELF-RESPONSIBLE), because only in that way, necessity for their direct supervision by hierarchically organized levels of management can be reduced.

An Introduction to the Development of a Netmodal Management Model

Pay thy attention that I expanded, supplemented, and generalized the original idea of the network approach (entering global markets) in the developed Netmodal Management Model. As a result of this Netmodal approach, Netmodal Management Model with its internationalization Net-mode (strategy) does not consider the actor-net internationalization process through established relationships and networking in terms of their integration into existing global network but to change it or to exploit the made changes in it. In short, the involved actors are here neither passive nor active participants but proactive partakers in these creative (internationalization) processes. In other words, the gained international knowledge and acquired experience through established relationships (learning from other network actors) is not exclusively used to assist available entry modes into a foreign market but for the creation of any manifestation of knowledge because this is both the main goal and purpose of the (Internationalization) Netmodal Management Process. For this reason, in full compliance with this Netmodal Approach, the established (qualitatively valuable, key-) relationships with other actor-net's partakers is the main asset of the Relationship Net-module during the process of deepening existing knowledge or creating new knowledge (Process Net-module), the aim of which is better positioning and structuring of the actor-net in the (global) network, as well as re-stabilization of relationships in this destabilized network (by the new created knowledge), which is within the scope and domain of responsibility of the Positional and Structural Net-modules. Or put in another way, this Netmodal approach is applicable to start any new business venture, although, seen from a methodological point of view, I think it is the most suitable for the virtual way of organizing business. The created (new) knowledge and acquired experience using this Netmodal Approach is the most valuable (strategic) resource of the established actor-net because this approach considerably improves its efficiency and effectiveness.

To sum up all previously mentioned, the spatial scope of this business management model was not constrained in any way but depends on the scope of encompassed space within the applied Netmodal Management Model supported with the appropriate Net-mode, that is, how will the set goals be realized in the business and work reality. Moreover, the scope of the time interval for the implementation of the initiated business venture was also not limited. These methodological settings of the netmodal approach were used to establish virtual (software) companies based on the implementation of temporary business projects, which was the main topic of my master's thesis. Unlike traditional companies based on a group way of thinking and the corresponding mindset, the virtual way of organizing (software) companies is much closer to the individual way of thinking.

This is very important to point out because the established relations between the actors of the network for the purpose of sharing knowledge and acquired experience are also based on an individual way of thinking. At the same time, in this way the methodological inconsistencies between the applied methodological approach (network approach based on group way of thinking) and the proposed way of establishing (personal) relationships were significantly mitigated, especially if one takes into account the fact that these individual actors not only represent the company (group business entity) but are also an integral part of this company, deeply integrated into its organizational culture. In other words, although in this Network methodological approach, actors can be individuals, groups, organizations, or firms that perform activities and control resources (Håkansson and Snehota, 1995), seen and reconsidered from a methodological point of view, this way of reconciling the group way of thinking with the individual way of thinking and deliberation cannot be easily passed over, even if the company is represented by a top senior manager or the owner of the company personally.

Especially if it is taken into account that not only numerous internal participants but also external participants are involved in these business relations, including state authorities, government agencies, and the apparatus of the established network structure, as well as non-governmental organizations (NGOs). All these geo-strategic and political decision-makers, as well as the actions and lobbying by other influential interest groups, significantly complicate the implementation of the basic ideas of the network approach in this emerging geo-strategic, political, and business environment, even if the aforementioned methodological issues and inconsistencies are ignored. In other words, even in the event that key players of the company personally establish relationships and agree to share and exchange acquired knowledge and experience, it is enough for state authorities to order these established business relationships to be terminated, guided by higher geo-strategic and political motives, interests, and corresponding inducements [geo-strategic and political risk of running any type of business]. After all of the above, it is not difficult to imagine that the company's senior management can also prevent these established personal connections and relationships between the lower ranks of management or abuse it for egoistic purposes, that is, to gain access to this acquired knowledge and experience in this cheap way, without even mentioning the influence and decisions made by the board of directors or company owners. In order to include these unethical aspects and properties of the established network, as well as many other unresolved issues and challenges of this network way of conducting business, I expanded and supplemented this original ARA conception by introducing the concept of the geo-political environment and the suitable business atmosphere that prevails within the established (global) network.

In other words, how activities and resources between and among Netmark actors are combined, developed, exchanged, created and (re)used happens in the CREATED NETWORK (NetMark DIA acternet's) ATMOSPHERE and the wider (global) environment and the resulting ambience. The atmosphere presents cognitive processes of the network actors, social -cultural context, attitude of the actors (individuals) towards each other, their dedication to set goals, established relationships, or business policy of the company, as well as actors' attitudes to the ethics, risk, co-operation and collaboration, co-existence and co-destiny, their attitude towards dialectical tensions versus conflict, change, as well as their attitudes towards basic network aspects such as trust, power (distribution), (common) interests, (shared) knowledge and (inter)dependency, understood in terms of mutual interactivity of these basic aspects of the established network (of involved actors, resources, and activities). All these five network aspects are dialectically interrelated with each other, conditioning the existence of each of them, understood in terms of the COMMON INTENTIONALITY of involved partakers. On the bases of these five network aspects was developed by me a netmodal management model, which was focused on the management of them by dialectical encompassing these very complex (inter-)relationships between and among them. I hope, you will observe the DYNAMIC FEATURES of the developed netmodal management model, also without the graphical presentation of it, by simply reading its stated postulates. On the other hand, if not, don't be disappointed because some professors, employed at the universities, missed to (in)see it with their "planked eyes", even during a multimedia presentation.

For these reasons, the timely advent of the virtual medium known as the Internet freed me from solving this kind of enigmatic puzzle of the aforementioned methodological inconsistencies. In other words, this internet way of doing business enables the establishment of a virtual company organized around temporary projects for the implementation of which appropriate actors (virtual employees) are engaged, as well as all the necessary resources for the initiation of appropriate activities provided for the purpose of implementing a network internet strategy in continuous development (Net-mode: Network mode). In short, Net-mode constantly adapts to the business and geo-political reality of the (global) network in order to successfully complete the project it started. It is important to note here that the development of the Netmodal Management Model was greatly aided by the inclusion of the way Bjorn Axelsson & Geoff Easton (1992) understood the Network Approach, figuratively representing the network as a metaphor that describes an array of entities, which are interconnected.

In addition to this significant creative achievement and the breakthrough made in the way of applying the Network Approach, the author of this net-modal management model of business reality, after the final break with educational and scientific institutions, redirected his creative abilities to dialectical aspects and characteristics of life reality, which resulted in the development of an appropriate methodological approach (dialectical interactive approach), acting creatively DIA being transfigured in the meantime in the creator of knowledge. It is so, in spite of the fact that it might be argued that even in this dynamic model of business reality can be observed some typical dialectical aspects and features, such as the mode of emergence of change within this kind of time and the appropriate spatial creative framework: Old picture of the network DIA the wished new picture of the network DIA a newer picture of it DIA..... Pay also your attention that these netmodal processes take place within a creative framework of time and space. All this happens in the year 1996-1997, and with development of the dialectic interactive approach, creator of knowledge BoBan (acting creatively within me) started three years later (1999).

Either way, these empirical observations were not supported with the appropriate methodological approach, based on the dialectical way of thinking, because frankly said, in those time DIA space, neither I had idea about it, nor I was aware of the possibility that one day, me in the role of a scriber will develop a dialectical methodological approach by a "little" help of this inner creator DIA Heavenly ones. Although my creative abilities then were not at the level of development that this creator of knowledge now possesses, pay your attention to the depth of exposed ideas and thoughts embedded in this dynamic model of business reality (Netmodal Management Model). This refers primarily to my (innate) ability to dialectically summarize the essence of both the ARA conception (Håkan Håkansson & Jan Johanson) and the way Bjorn Axelsson & Geoff Easton understood the Network Approach, extracting or deriving key terms and concepts from this summarized content which was creatively considered. This was followed by the development of the Netmodal Model of Business Management based on these dialectically summarized key notions and concepts, which are the recognizable characteristics of creators of knowledge in the making (and emerging).

Formulation of the Netmodal Management Model

The starting point in netmodal management model is active and proactive selection, as well as the creation in the netmodal sense of the KEY (basic) elements of the network, understood in terms of both time and space. In other words, it should be established who are the KEY ACTORS with the most suitable KEY ACTIVITIES and KEY RESOURCES for building and establishing key relations and relationships, the purpose of which is connecting them to the network: Actor-net. To establish, what is "key" (essential) in the network is the main task of the top management of the actor-net. Generally speaking, as a reference point for the selection of key elements of the actor-net is the idea and knowledge that the key relations and relationships deal with the deepening of existing knowledge, as well as with the creation of new KNOWLEDGE (process netmodule), supported by the re-establishment of STABILITY in this restructured network [structure netmodule: a desirable longer-term picture of the network in the future]. According to Easton & Axelsson's understanding of the network, it is clear that in networks, relationships and position, (“tensions in the relationships are which keep the company in its position”, 1992, page 20) and structure and process are mutually related (“What is clear is that in networks, as in organizations, structure and process are intimately related”, 1992, page 17). As a result of these statements in my opinion (1996) the netmodal management model can be presented by the four interrelated dialectical netmoduls:

1. Relationship Netmodule (relationships → positions → structures → processes) = new and renewed relationships
2. Position Netmodule (positions → structures → processes → new relationships) = new positions
3. Structure Netmodule (structures → processes → new relationships → new positions) = new structures
4. Process Netmodule (processes → new relationships → new positions → new structures) = new processes

to create a new (deeper) knowledge within the marknet

using actor-nets, seen as its dynamic "big picture" in time and space,

by means of a further building new (renewed) relationships .... new positions .... new structure of the network ..., and so on in time and space,

continually making and supporting changes, as well as exploiting these changes made.

In this graphical illustration was presented the developed "Netmodal Business Management Model":

The basic assumptions of the Netmodal Management Model are as it follows:

  • The model is determined by the whole network (totality of its elements: Re, Po, St, Pr), as well as by the created atmosphere and the work ambience in it, encompassed within this span of time and space
  • The current established (picture of the) network, represented through Relationships within it, is created on the basis of initiated processes {actors develop relationships with each other through inter-exchange of processes [of providing necessary resources, (by sharing knowledge) for (faster) organising the needed activities] (Haakansson and Johanson)}
  • The current established (picture of the) network, represented with the achieved Positions in it, is determined by the established relationships [actors are goal oriented, trying to improve the current position in the network as well as to increase control of the network (Haakansson and Johanson)]
  • The current established (picture of the) network, manifested in the form of created Structures, includes positional attributes and aspects [the network of positions determines the formal network structure]
  • The established (picture of the) network, represented in the form of initiated Process (of knowledge creation) in it, is determined by structural attributes and aspects.

Netmode Development Process

The purpose of this is to see whether these current established networks of the constituent actor-nets make sense as the consistent, coherent, and composite picture of the desired direction of the business of the included actors, the grand design of which should be encompassed by the appropriate netmode: The netmodal understanding of the notion strategy (see the following figure). While the net-modules are preoccupied with managing and harmonizing extremely complex relationships and dialectical tensions between the four basic aspects of the network [trust, power (distribution), (common) interests and (shared) knowledge] by strenghtening established relationships between the involved actors, as well as solving positional, structural and processual issues in the established network of involved actors, resources, and activities, which actually enables the internationalization netmodal management process to be more easily understood and implemented by (the key) actors (human-loving individuals) in business and societal reality, the netmode was dealing with the ALL aspects of the established network (net-market). Especially, with the fifth aspect of network: (Inter)Dependency DIA interactivity of the involved partakers, understood in terms of intentionality of these actors. Due to the focus of network approach on these network aspects, interconnected with the totality of relationships among involved actors during their building and maintaining, as well as with suitably established positions, structures and initiated processes in the network, these four netmoduls, over the passage of time and space, have to be harmonised and synchronised with each other, with the developing netmode, as well as with the business reality (“Big Picture”). In other words, Relationship netmodule, Position netmodule, Structure netmodule and Process netmodule should provide that the continually developing NetMode is in line with the business reality. For these reasons, the fundamentes of the developed Netmodal Management Model are:

  • Process of Short-term and Long-term Development and Dynamisation: Intentionally making continuous changes in the (Global) network together with other actors through the created Actor-nets using Relationship net-module and Process net-module

  • Process of Short-term and Long-term Stabilization of the Network: Stabilization of the network by means of Position net-module and Structure net-module in order to be exploited (and supported) the made changes, perceived as a business opportunity.

  • Process of (continual) Short-term and Long-term Harmonization of the Network: The time horizons of Net-modules have to be continually harmonized (Relationship net-module → Process net--module, Position net-module → Structure net-module, as well as any short-long term combination of them)

  • Process of (continual) Synchronization of the initiated Dynamisation versus Stabilization of the Network (Short-term and Long-term): Because of the fact that dynamisation and stabilization are dialectical processes, contrasting and contradicting each other, there is a need for their synchronization as well: Relationship net-module → Position net-module and Structure net-module → Process net-module. The purpose of this is to provide the conditions for the co-existence of changes made by creation of (new) knowlege (dynamics) and stability.

In other words, in which order creative endeavors and suitable key activities should be accomplished? Which key actors and resources are needed for a successful completion (termination) of the project (of undertaken activities), and who will provide them? Are the established relationships, positions, structures and processes compatible with the developing netmode of involved actors (actor-nets), and with the desirable picture of the business reality as well? And if not, what issues need to be resolved to bring these four net-modules back into harmony with each other as with the continually developing netmode? Internationalization netmodal management process also should support the processes individualisation and humanization of employees during developing netmode in this already perceived tendency towards some kind of integration these previously clearly separated and distinguished concepts: Company and Market. The first implication of this integration is a clear trend and tendency among actors (both humane individuals and group entities), which emphasizes cooperation and collaboration instead of the competition within the established network of markets (MARKNET), even among competitors [because supporting competition is very expensive for all actors involved]. For this reason, established relationships for the purpose of forming networks of actor-nets based on common interests with the aim of creating (new) knowledge are both a natural consequence and response to this observed trend (and tendency). As in real life, every loss should be offset to be achieved a natural balance. Therefore, it might be argued that the second implication of this integration is a parallel trend that allows in addition to cooperation also a manifestation of "competition" within the established network (actor-net). For example, competition between teams organized around projects (and assigned work tasks) within the established virtual company.