Inter-firm interaction from a human perspective

Abstract

Interaction has been a central construct of the Industrial Marketing and Purchasing (IMP) Group from the earliest research (Håkansson 1982). Empirical research derived a framework where interaction between firms within ‘episodes’ lead to the development of an ‘atmosphere’ that conditioned the nature of on-going cooperation. The IMP framework developed without a deep underlying theoretical base, although there was reliance on two streams of literature: institutional economics and social interaction theory and in addition influences can be traced from resource-dependence theory and the behavioural theory of the firm. While the empirical perspective allowed researchers to focus more clearly on the nature of inter-firm exchanges and see the role of business relationships (Håkansson 1982), the lack of a deep theoretical structure has lead to weaknesses in the interaction approach. These weaknesses include an implicitly static perspective of interaction trapped within episodes rather then being continuous and so a stability/change dichotomy has prevailed, and secondly, a lack of distinction between the firm and individuals as actors so that the role of humans has been underplayed. It is individuals who act for firms and so firms exchange and change, whereas the IMP framework often resorts to firms as actors, or mixes individuals and firms as actors in confusing ways so that it is hard to know what actors mean in many texts. This removes (or at least reduces) the human elements of business relationships that provide an understanding of atmosphere and how an understanding of firms, relationships and network structures allows and constrains new economic possibilities. The humans also act through, and in connection with a number of material objects (e.g. fax-machines, E-mail and computers, telephones), and in diverse locations in interpersonal interaction and in specific places and spaces. These factors indirectly affect the interaction processes and vary the outcomes of these ongoing processes (e.g. products and services). Recent globalization processes have an impact on both the social interaction and exchange due to diversity in cultural backgrounds as well as noting the role of the enlarged spatial dimension in business. This paper adds to the literature by discussing the limitations of an under-theorized construction of ‘interaction’ and then proposes a deeper theoretical framework based on human cognition and time. This theoretical framework develops an understanding of the environment as a temporal space structure created through social construction, in which firms are partially directed by individuals who are involved in dialogue. According to our view, this perspective allows a deeper understanding of the way that an ‘atmosphere’ develops between firms, through a more careful understanding (and description) of the ‘in-between’ that occurs when two individuals representing different firms interact. In elaborating the ‘in-between’ an important distinction is made between interaction in the physical world and interactive processes in the cognitive domain. Further clarification of this distinction offers significant opportunity for future research. The final sections of the paper address the research implications and discuss the limitations of the proposed approach to inter-firm interaction based on human cognition through time.