ANALYSIS OF COOPERATION NETWORK PHENOMENUN IN THE BRAZILIAN TELECOMMUNICATION INDUSTRY
OPERATIONS STRATEGY
María Elena León and João Amato Neto; University of São Paulo, Av.Professor Almeida Prado No. 128.Trav.2, São Paulo,Brazil, ,
ABSTRACT
This paper describes the bussiness cooperation network phenomenun among small and medium telecommunication enterprises in the state of São Paulo, Brazil. The main goal was to identify formation advantages and drawbacks. A detailed questionnaire was applied. Among the many advantages we may highlight technology access. Results lead to the conclusion that small and medium telecommunication business owners in Brazil, are not used to join themselves for a common goal and problem solving. The concept of mutual collaboration as a worldwide adopted alternative for companies grew interested in acquiring a better cooperation knowledge in order to survive and allow technology sharing.
INTRODUCTION
Organizations have been constantly buffeted on all sides by strong and shifting winds of change (Cash et al; 1994). There is a consensus that these winds have been greatly influenced by a pervasive phenommenun called globalization. The process of globalization and the intense changes in the modern capitalis world, specifically the emergence of new technologies relating to the microelectronics and the infoways, have imposed deep changes in the organizational structure of the enterprises in order to get more competitive advantages. (Amato, 1998). The new opportunities arose from this new kind of inter-firm relationships or enterprise networks seem not to have comparison with the world economic history.
Flexibility and agility have been identified as a necessity for maintaining global competitiveness (Golman et al, 1995), therefore the concept of cooperation network has been proposed to be key element in the development of agile organizations. However, in developing countries, such as Brazil and Mexico, these new concepts have to be adapted to meet the specific needs of the industry in each country.
This paper presents the concept of cooperation network referring to the creation of inter-firm network as an important collaborative strategy used by organizations to enhance their competitiveness, specifically to the increase of the quality and productivity levels of the small and medium telecommunication enterprises in Brazil. We will focus mainly the most industrialized state of Brazil, the state of São paulo.
One of the most interesting successful case of inter-firm networks in Brazil is the shoe industry in “vale dos Sinos”, place in the Rio Grande do Sul State ( South of Brazil). In that case, the geographical proximity and the operating the same market provoke a greater interdependence degree among the partners. (Schmitz, 1992).
RESEARCH METHODOLOGY
Case study analysis was the principal means used to examine field data. The firms were selected according to indication of ABINEE ( Brazilian Association of Electrical and Electronic industry). The sample included six small and medium enterprises manufacturers of electronical components of telecommunication industry. The main goal was to identify formation advantages and drawbacks. A detailed questionnaire was created and applied. It included topics related to the enterprises current situation, cooperation profile, possibilities and concern regarding the creation of cooperative networks among them. The questionnaire was answered by the managers or leading engineers.
THE BRAZILIAN EXPERIENCE: RESULTS
Those who replied were required to indicate their level of agreement with statements referring to different advantages and drawbacks in the business cooperation network phenomenon among small and medium telecommunication enterprises (six). A five-point scale, where (1) represented “strong agreement” and (5) “strong disagreement” was used. The aims of the study were:
§ Identify formation advantages and drawbacks in the business cooperation network in telecommunication Brazilian industry.
§ The importance of interfirm links and cooperation
§ The motives for entering partnership
The first implication of the study is the fact that among the many advantages we may highlight technology access (100%), business expansion (50%), better survival chances and cost reduction (66,6%). In spite of benefits, disadvantages such as partners’ mistrust (83,3%), lack of cooperation tradition in Brazil (44%) , and competition in the same market, restricts networks cooperation implementation (83,3%). Results lead to the conclusion that small and medium telecommunication business owners in the state of São Paulo, are not used to join for a common goal and problem solving. Although, once grasped the concept of mutual collaboration as a worldwide adopted alternative, the companies grew interested in acquiring a better cooperation knowledge in order to survive and allow technology sharing and mutual help. (Leon, 1998).
The second implication in our opinion, however, the majority of links does not have the typical features of an alliance (83,3%), but it is rather an informal link between competitive firms related to specifically business issues (50%). The majority of the entrepeneurs (83,3%) interviewed entered interorganizational links in order to solve problems in their operations more easily and effectively.
According to the statements of the entrepreneurs the motives led the firms to form alliances are:
1. Financial reasons : obtain financial sources, reduce costs, share risks (83,3%).
2. Strategic reasons: maintain or enhance competitiveness, diversification, remove entry barriers (66,6%).
3. Economies of scale (50%)
4. An increased access to new markets, products and knowledge; availability of information. (33,3%)
5. Other reasons (e.g. quality improvement) (33,3%).
We believe that reflections on alliances might play an important role in the strategic management of enterprises.
Results lead to the conclusion that small and medium telecommunication business owners in the Brazil have a major problem, such as partners’ mistrust. A sucessful partnership probably requieres a high level of business ethics. If members do not share the same vision about the future of the alliance, decisions will be hard to make.
CONCLUSIONS
The study of interfirm networks, especially as this relates to identify advantages and drawbacks, represents a burgeoning field of inquiry in the production operations management literature. However, the network paradigma, while recognizing that global competition occurs increasingly between networks of firms (Patterson, Styles and Ahmed, 1998), is complex and incomplete in its conceptualization.
The research revealed a considerable interest of the entrepreneurs to establish interorganizational links. There is a common agreement among the researchers and entrepreneurs in Brazil on the need for specific policies aimed at encouraging SMES cooperation network.
REFERENCES
Amato, João Neto. Productive Cooperation network as a competitive advantage for small and medium size firms in the state of São Paulo. In 44th world conference Innovation and economic development. ICBS-35. Naples-Italy (20-23 June/1999). Pag 1-10 .
Cash, James; Eccles, Robert; Nohria;Nitin;Nolan,Richard. Building the information-Age , organization: structure, control and information technologies. Irwin, Chicago,1994.
Goldman, S. Nagel,R,Preiss, K. Agile Competitors –Concorrência e Organizações virtuais, Ed. Érica, São Paulo, 1995.
Leon, Maria Elena. Uma análise de redes de cooperação das pequeñas e médias empresas do setor das telecomunicações. Dissertação de Mestrado. Escola Politécnica da USP. Decembre de 1998. Pag 85-117.
Patterson, P. Styles, C. Ahmed F. (1998). “The determinants of succesful relationships in international business , Proceedings of the 6th International Colloquium in Relationship Marketing, University of Auckland, 7-8. December . pag 23-55.
Schmitz, H. On the Clustering of small firms, IDS Bulletin, Vol.23, No. 3. England ,1992.
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** This research was supported by FAPES (Fundação de Amparo à Pesquisa do Estado de São Paulo, Brazil) under process No. 98/15576-3.
Proceedings of the Eleventh Annual Conference of the Production and Operations Management Society, POM-2000, April 1-4, 2000, San Antonio, TX.