Relational structure in the global automotive industry: groups, networks and fields.
| Autor | Neto, Mario Sacomano |
1 Introduction
Meso-level studies are increasingly important in economic sociology, institutional theory and organizational analysis, enhancing the diffusion of the concepts of field (Fligstein & McAdam, 2012), social networks (Granovetter, 1985) and strategic groups (Garcia-Pont & Nohria, 2002; Gomes-Casseres, 2003; Lazzarini, 2008; Nohria & Garcia-Pont, 1991). Different theoretical perspectives co-exist and many research results suggest the need for cross fertilization. Companies tend to relate to others in order to keep or improve their position in the field (Fligstein & McAdam, 2012), by accumulating resources (Garcia-Pont & Nohria, 2002; Gomes-Casseres, 2003) and knowledge of the market (Powell & Smith-Doer, 1994). The configuration of interactions among these groups of companies play a significant role in value appropriation by the actors (Lavie, 2007), defining the incumbents of fields (Fligstein, 1991; Fligstein & McAdam, 2012) and in control and complementarity of resources (Pfeifer & Salancik, 2003). Belonging to a group is strategic to companies, since their performance depends on results and resources held by other actors they are connected to (Lazarini, 2008).
Nohria and Garcia-Pont (1991) and Garcia-Pont and Nohria (2002) argued that the automotive industry is organized in "constellations". The configurations of the property relationships, alliances and cooperation agreements play a significant role in value appropriation and in the complementarities of the groups' resources (Lavie, 2007; Lin, Yang & Arya, 2009). We suggest that groups operate within strategic action fields (Fligstein & McAdam, 2012) and that the position occupied by actors in different networks is a significant measure of the social capital (Bourdieu, 2005) or the relational resources (Gulati, 2007, Lavie, 2008) dominated by companies to maintain or improve their position in the competitive arena. Networks are related to several specific forms of resource, including intellectual property, marketing channels, manufacturing facilities and personnel (Gulati, Lavie & Madhavan, 2011). The social network analysis is herein used to measure resource endowments of different companies in the automotive industry and their changes between 2004 and 2014. This technique is based on the regularity of the structures of ties among nodes (Wasserman & Faust, 1994). The composition of networks based on cross-shareholding, joint ventures, manufacturing contracts and alliances allows mapping groups composing the field.
The internationalization of automotive companies and their strategies for entering new emerging markets are strongly associated with merger and acquisition processes, and with joint ventures (Shi, Sun, Pinkham, & Peng, 2014). It results in increasing concentration of power and new plant locations and design centers worldwide, such as those implemented in China, South Korea, Russia, India and Brazil. Cross-shareholdings, joint ventures, manufacturing contracts and alliances are indicators of these dynamics, in which companies acquire or establish partnerships with other assemblers in the automotive industry seeking strategic advantages. At the same time, companies in the same sub-groups compete and cooperate with each other and compete with other sub-groups and companies.
The current research is guided by one central question: how does the network structure influence the position within the field? Other questions are relevant as well, such as: what are the most central companies along the studied period? What are the strategic groups? Do the sub-groups become denser? Flow do relationships and relational issues promote a privileged position in the field? The study seeks to dialogue with distinct theoretical perspectives of fields, strategic groups and networks to address the dynamics of industries. So, the purpose of the paper is to map the network structure of the alliances between automotive companies and to explore how it affects the competition in the field.
2 Theoretical foundations
Theoretically, the paper contributes to clarify the relationship between networks and fields. Networks can support other different resources. So, we can infer that corporate and managerial social skills in networks are significantly important to advance to new positions and get new resources. Techniques of social network analysis as the ones used in the paper are useful to get objective measures of social capital. Together with the measures of other resources, these may generate inputs to the drawing of the structure of the field, which may be done either using multiple correspondence analysis, in the Bourdiesian fashion, or, alternatively, also using social networks techniques to interconnect properties and actors, as suggested by Nooy (2003). Visualizing networks may also be useful for a more qualitative assessment of fields. In this case, it is relevant to understand how the position in the network relates to the shared meanings of actors, who are the incumbents in the field and why.
2.1 Fields
Field theories have been commonly used to study the economic realm in contemporary economic and organizational sociologies. There are at least two main basic perspectives using the concept of fields in different ways (Swedberg, 2004). The first one is associated with the sociological institutionalism in organizational analysis (DiMaggio & Powell, 1983; Powell & DiMaggio, 1991). In this case, organizational fields are conceptualized as "those organizations which, in the aggregate, constitute a recognized area of institutional life: key suppliers, resource and product consumers, regulatory agencies, and other organizations that produce similar services or products" (DiMaggio & Powell, 1983, p. 148).
The second approach derives from the sociological approach by Bourdieu (1985), which conceptualizes fields as:
a network, or a configuration, of objective relationships between positions. These positions are objectively defined in their existence and in the determinations they impose upon their occupants, agents or institutions by their present and potential situation (situs) in the structure of the distribution of species of power (or capital) whose possession commands access to the specific profits that are at stake in the field, as well as by their objective relation to other positions (domination, subordination, homology, etc.). (Bourdieu & Wacquant, 1992, p. 97).
According to these authors' view, the concept of field may not be isolated from concepts such as habitus and capital, constituting a relational scheme of perception that may be used for a rigorous, but not rigid, empirical analysis. Agents' positions (individuals or organizations) are defined by the relative distribution of resources recognized as valid in the field's competition. For instance, in the case of economic fields, financial, cultural, social, technological, juridical, organizational, commercial and symbolic resources are all important to market competition, with the relative endowments of companies defining their position and possibilities (Bourdieu, 2005).
Inspired by Bourdieu's approach, Fligstein and McAdam (2012) recently suggested a similar perspective that defines fields as arenas with socially constructed sense of belonging, boundaries and understandings for operation (i.e., the understanding of what is at stake in the field, who the incumbents and challengers are, what the rules of the space are and how actors in different positions should act). The authors suggest the adaptation of the Bourdiesian approach to more systematically account for conscious cooperation and collective action by replacing the sense of habitus with that of social skills. They also have a more nuanced and strictly symbolic definition of power in the field, suggesting that the existence of incumbents and challengers without any objective accounts on how the field structure is defined by the objective and relative distribution of different resources.
The herein presented automotive industry analysis will draw on Bourdieu and Fligstein and McAdam (2012) perspectives without overemphasizing their differences. These approaches define field in a more focused way than it is defined in the institutional account, which demands taking into consideration the interconnection of fields (Fligstein & McAdam, 2012). Thus, the assembling companies in this industry which were approached in the current study will be considered part of the same field --which is possibly composed of subfields, including specific segments (or strategic groups, as suggested by Garcia-Pont & Nohria, 2002) and organizations, which might be assessed as fields themselves.
Based on this working hypothesis, the study will also consider that assembling companies operate in a context in which social capital (Bourdieu, 1985) or relational resources (Gulati, 2007) become increasingly important to their competitiveness. Such proposition meets extensive literature on organizational and economic sociologies, which is focused on assessing the institutionalization of new organizational forms that can change these organizations' boundaries by increasingly conceiving them as networked organizations (Boltanski & Chiapello, 2009; Davis, 2009; Donadone, 2004; Fligstein, 1991; Griin, 1999). According to these authors, this process was driven by changes in the regulation of developed economies and in the increasing control of organizations by the logic of finance, resulting, among other consequences, on drastic changes in organizational dynamics, due to the corporations' growing focus on their core business and interdependence on other actors in their "value chain" (Davis, Diekmann, & Tinsley, 1994).
Empirically, clear examples of this perspective were found. Take the example given by the Chinese market, whose access was justified by its potential consumers, i.e., the giant Chinese domestic demand, which is an attractive resource in terms of man-power...
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