MarketasNetwork; So What.doc

Market-as-Network; So What?Ivan SnehotaUniversity of LuganoSwitzerlandPaper prepared for the19th IMP ConferenceSeptember 4-6, 2003University of LuganoSwitzerlandAbstractEver since its beginning the IMP research has been concerned with the limits of the market concept as guidance for managerial action, especially in markets where customers are businesses and other organisations. At first, it has focused on the empirical evidence of phenomena not foreseen or not considered endemic to the working of the market by the dominating theories of market, namely the existence of continuous exchange relationships and interdependencies among these. At a later stage, much effort has been dedicated to conceptualizing relationships, their dynamics and the network form consequent to the interdependencies. In hindsight it appears that the claim of IMP research that (business) markets are networks of exchange relationships among a varying and various set of actors amounts to postulating that markets are institutions rather then a distinct mechanism in the assumptions of economic theory and much of the marketing discipline. Institutions, whose properties and functioning have some features of pervading consequences for market actors.The aim of the paper is to explore some of the consequences of adopting the “market-as-network” perspective for research in the marketing discipline and the practice. It puts in relation some of the key concepts of the IMP tradition in relation to the emergent concepts of institutional school in economics. In particular the discussion focuses on the issue of market definition, the concept of differentiation and of the strategic autonomy. Key words: market - exchange processes - market definition - strategic actionMarket-as–Network; So What? - On the power of a perspective and impact of it.Ivan SnehotaThe question of what market is does not seem to bother most of those who refer to it in everyday language. They appear to know the meaning of it and it seems to work perfectly well as a notion that conveys connotations that many apparently can share. It is less well defined as an analytical category – a concept, in some of the disciplines that are interested in “markets” and where the meaning of a “market” is at issue. There are several such disciplines: economics, economic history, sociology and, not the least, marketing and other disciplines of management. Anyone looking for definitions of market in the literature today is likely to agree with the Nobel Prize Winner in economics, Douglas North, who once observed: “it is a peculiar fact that the literature of economics and economic history contains so little discussion of the central institution that underlies neo-classical economics – the market” (North, 1977:710). Economic literature is no exception in this respect; neither of the other disciplines concerned seems to contain much of discussion of the market concept, management and marketing included. The purpose of this paper, however, is not to debate what market is. Such an attempt would be overly pretentious and probably pointless. Who would discuss what the sun or a chair actually is? Any object or phenomenon is many different things dependent on the angle chosen to approach it and explore it, and can be approached from different angles. Different perspectives result in different pictures of the landscape where different features of it appear or disappear and assume major or minor proportions. Perspectives always entail “distortions” of the phenomena, but then again no picture can embrace all perspective and any picture always implies a certain point of observation. Acting is related to pictures and images. They provide guidance for how to act, if we are to act, on the phenomenon. Therein lies the importance of the perspective. Therefore, the purpose of this paper is to explore how the perspective taken on the “market” affects the research in marketing and the way to act of those who act in or on, what they see as “market”.I am concerned here in particular with implications of a perspective that can be labelled “market-as-network” Swedberg credits Wayne Baker (1981) for using the notion in the title of this Ph.D. dissertation and it has been used by several authors in marketing, e.g. Johanson & Mattsson (19..), elaborated by the IMP stream of research in marketing, as opposed to the perspective which I will label as “exchange facilitating mechanism”, or “price-mechanism”, common in the neo-classical economics and taken over by many others. As it will become clear further on, I will argue that the market-as-network perspective is clearly siding with the perspective on markets as an institution, discussed in economics and partly in sociology.This paper is written from the angle of the discipline of marketing where much of research is, perhaps implicitly。