Buying centre consequences of technological convergence

European Journal of Purchasing & Supply Management 7 (2001) 121}132

Buying centre consequences of technological convergence

Per Andersson*, Bengt MoK llerydStockholm School of Economics, Department of Marketing, Distribution and Industry Dynamics, P.O. Box 6501, S-113 83 Stockholm, Sweden

Received 17 February 1999; received in revised form 24 March 2000; accepted 25 March 2000

Abstract

The paper discusses how technological convergence, manifested in increased mobility in organisations, changes the way purchasingorganisations buy and use telecommunications and IT systems. The aim of the paper is to analyse how the implementation of mobilityin "rms is linked to changes in the relationships between units within the buying centre, between the buying centre and supplyingorganisations, and to some extent also between the buying centre and its customers. The study builds on interviews with purchasingfunctions in 61 small-, medium-sized and large organisations in di!erent industries. The concept of mobility is discussed and de"ned.Industrial network conceptualisations, loose coupling theory and a buying centre model constitute the theoretical framework. Resultsindicate that management plays a more central role in the buying centre when major IT and telecom contracts are signed. Theinterviews also indicate few large changes in the exchange relationships with supplying organisations as a result of the implementationof new system solutions for increased mobility. ( 2001 Elsevier Science Ltd. All rights reserved.

Keywords: Buying centre; Purchasing organisation; Technological change; Convergence; Network

1. Introduction1

Mobile telecommunications facilitate changes in theway people work and how business activities are per-formed. One of the features that mobile telecommunica-tions o!er, mobility, lies at the centre of the emerginginformation economy. It is generally said to o!er oppor-tunities for individuals to stay connected as they move, tocommunicate independently of locations, to create a #ex-ible work environment, to facilitate decentralisation, andto empower personnel. Organisational mobility can alsochange the way in which companies organise their activ-ities internally and in relationships with other organisa-tions. Mobile telecommunications are increasinglybecoming part of organisations' corporate strategies, asthey become integrated with the companies' total com-munications and information infrastructures. A resultingchallenge of this for suppliers is to create new organisa-

*Corresponding author. Tel.: #46-8-736-95-35; fax: #46-8-33-43-22.

E-mail addresses: [email protected] (P. Andersson), [email protected] (B. MoK l-leryd).

1This is an extended version of an abstract presented at the 12thbiennial ITS, Stockholm, 21}24 June 1998 and to ANZMAC98,Austra-lia and New Zealand Marketing Academy, University of Otago,Dunedin, New Zealand, 29 November}3 December 1998.

tional and technological links backward to new sup-plying organisations, but also to adapt the old stablelinks and relations. For buyers, system integration a!ectsboth purchasing and use, including the links between thetwo. For buying organisations, increased mobility re-quires adaptation not only &backwards' in the channel,i.e. between the purchasing organisation and the systemof suppliers, but also &forwards', towards the buyer'scustomers that are confronted with the buyer's increasedmobility in use. This paper is intended to unravel if andhow mobility and an increased technological conver-gence has resulted in adaptations of relationships withinbuying centres, and between buying centres and suppliersand customers. The technological convergence has sev-eral interpretations, but we have laid emphasis on threekinds that have taken on special importance: the conver-gence of voice and data transmission (resulting in, forexample, mobile telephones with internet access), theconvergence of "xed and mobile telephony, and lastly,the convergence of service content and the delivery of thecontent in these new systems.

2. Background

Mobile telephones have generally been regarded asa stand-alone device purchased by individual users or

0969-7012/01/$ - see front matter ( 2001 Elsevier Science Ltd. All rights reserved.PII: S 0 9 6 9 - 7 0 1 2 ( 0 0 ) 0 0 0 0 8 - 3

management. However, as stated in the introduction,questions regarding mobile telecommunications are in-creasingly becoming part of organisations' corporatestrategies. In addition, in some industries, innovative andentrepreneurial users have implemented new integratedIT and telecom solutions, changing the inter-organisa-tional arrangements. The consequences of these new fea-tures of converging technologies, including mobility,have become pervasive in all areas of social and businesslife (Baldwin et al., 1996; Goddard and Richardson,1996). Mobility and its connection to time e$ciency isincreasingly being used in telecommunications for com-petitive advantage by supplying "rms, and has for sometime been expected to lead to radical change in buyingorganisations (Keen, 1988). Wireless communicationswithin and between organisations are expected to lead tolarge structural e!ects, the creation of new institutions,and are also expected to require radical internal adapta-tions (Alavi, 1996; Regli, 1997). Wireless systems are alsoexpected to change, sometimes radically, the productivityin the users' systems (Seybold, 1994). Hence, for bothsuppliers and buyers, this new situation means severalnew challenges.

Firstly, despite the hopes and opportunities connectedto the di!usion of the new integrated telecommunicationand information systems, where increased mobility is oneof the central arguments put forward, there are also signsof inertia. Suppliers of new systems and concepts, e.g. &themobile o$ce', have experienced problems in developingand selling new systems. The inertia is accorded bothorganisational and technological explanations. Systemintegration requires new, sometimes unexpected, actorconstellations between companies in formerly unconnec-ted parts of di!erent industries. It also requires newtechnological links in both products and services of mo-bile telephony, "xed telephony, mobile data, and more.

The second set of challenges concerns the buyers. Sys-tem integration a!ects both purchasing and use, includ-ing the links between the two. New, integratedtelecommunication and information solutions can re-quire considerable investments, involving not only thepurchasing department. Due to the size of investmentsand the potential e!ects on buyers' operations, it canrequire the involvement of many other departments, in-cluding management. Another challenge for buyers ishow to change and adapt purchasing behaviour. Whatused to be a simple purchasing decision, deciding onwhat make of mobile phone to buy, can become part ofcomplex investment decisions for top management.

Thirdly, the implementation of system solutions alsochallenges the established routines where mobile teleph-ony, "xed telephony and information systems are used.Increased mobility and system integration is in manycases introduced in order to improve the buying organ-isations' performance in relation to their own customers.Hence, increased mobility requires adaptations between

the buyers and the customers that are confronted withthe buyers' attempts to increase their organisationalmobility.

The three sets of challenges described are interconnec-ted. Creating new organisational and technological sys-tems on the supply side is strongly linked to the buyerside's need for adaptations of purchasing operations; bothare connected to the buyer side's implementation and useof the new systems in relationships with their customers.With a focus on mobility, this paper sets out to describeand analyse aspects of the three parts of this complexity.

3. Mobility: some general observations

Before analysing aspects of these three parts, how canwe de"ne the concept mobility? What does it mean forcompanies in di!erent industrial sectors and with di!er-ent types of business operations? The concept used herebuilds on various empirical sources and mainly frominductive point of view. Three general conclusions can bedrawn from an interpretation of what could be includedin the concept, building on the interview data and otherempirical sources (described below).

Firstly, from an empirical point of view, it is di$cult toseparate mobility from the concepts connectivity andaccessibility. It can be argued that the major aim whenimplementing new integrated systems based on mobileInternet is increased connectivity in the "rst place, andmobility will be a consequence of this. For example,service and sales representatives in both manufacturingand service companies who are equipped with new sys-tems that link them via mobile telephony to the com-pany's information databases and "xed telephonysystem, see it as a major advantage to be connected. Inother words, they can be connected to informationdatabases and other information sources if they shouldneed it, and wherever they are. When learning to use thisconnectivity, it can also a!ect the representatives' modeof using and changing their mobility, in the way theymove in time and space.

Secondly, building on the empirical sources, thereseems to be no single strategic aim behind the implemen-tation of new mobility-based system solutions. Hence,behind a strategic decison to increase the organisationalmobility, there can be one or several di!erent objectives.Among the most important e!ects and points forwardedby the companies are:

f increased work #exibility through increased mobility;f improved internal coordination and communication

through mobile communications;f improved and changed customer services through use

of mobile solutions;f changes in the internal organisational structures and

processes through new solutions;

122 P. Andersson, B. Mo( lleryd / European Journal of Purchasing & Supply Management 7 (2001) 121}132

2The paper is part of a major research project on the emergence ofmobile telephony reported in several studies. Among the studies inEnglish are HulteH n and MoK lleryd (1992, 1993) and Andersson andMoK lleryd (1996a)

3The paper is part of a major research project on the emergence ofmobile telephony reported in several studies. Among the studies inEnglish are HulteH n and MoK lleryd (1992, 1993) and Andersson andMoK lleryd (1996a)

f changes in the inter-personal communication withinorganisations;

f changes in security and control through new mobilesolutions;

f general improved operational e$ciency and produc-tivity with the new mobile solution.

In most interviewed companies, several of these factorswere mentioned when asked about the content of mobility,thus suggesting a multidimensional view of the concept.

Thirdly, when asked about the purpose of mobility, itis broadly three parts of the organisational systems thatare referred to:

f increased mobility as a way to increase the internale$ciency of the buyer organisation;

f increased mobility as a way to increase e$ciency in thebuyer's exchanges with customers;

f increased mobility as a way to increase the valuecreation towards and e!ectiveness in relation to thebuyers' customers.

In total, the "rst of these three was by far the mostcommon in interviews and descriptions, suggesting astrong emphasis on only connectivity and accessibility.Being able to access the buyer organisations' informationsystem in an e$cient way via, e.g. mobile phones orterminals was most important when considering mobilitysolutions. However, being able to use, e.g. mobile datasystems to alter both the internal organisational struc-tures and processes, and the external exchange processeswith customers were by some actors described as the realmeaning and challenge for organisations aiming to be-come more mobile. To sum up, mobile system devicespurchased (e.g. mobile phones for web access) are notsimply another point of access, but could mean somethingentirely new for the whole organisation, a!ecting bothe$cieny and e!ectiveness, and business development.

4. Research questions and aims of the study

The introduction pointed to three organisational chal-lenges for companies involved in the technological con-vergence of telecommunication and informationtechnology, here with mobile telephony and increasedmobility as starting point. From this, three central re-search questions can be deduced:

(1) How do buying organisations establish new andchange old established relationships &backwards'with suppliers in the distribution network when im-plementing systems for increased mobility?

(2) How do increased mobility and system integrationa!ect the purchasing organisation and operations ofbuyers?

(3) How does increased mobility a!ect the way buyersand users of the systems adapt the relationships withtheir customers?

The aim of the paper is to analyse how the implementa-tion of mobility in "rms is linked to changes in therelationships between units within the buying centre,between the buying centre and supplying organisations,and to some extent also between the buying centre and itscustomers. This includes the development of a generalframework for the study. Adding the purchasing side andthe buyers' relationships with their customers, the studylinks to prior studies of distribution networks for mobiletelephony. It can be viewed as the second step in a studywhere the overall objective is to expand the knowledgeabout the strategic and organisational network behav-iour of companies involved in the technological andorganisational convergence of industries.

The research focuses on major contact patterns andrelationships, the actor bonds (Gadde and Ha> kansson,1994), between internal and external actors of the 61organisations surveyed.

5. Earlier studies

The paper adds the purchasing perspective to researchwhich has been covered in previous studies; such as theconsequences for distribution of institutional, technolo-gical and market changes in the rapidly growing marketfor mobile telecommunications equipment, how distribu-tion systems have evolved with channel changes, and theincreased polarisation of customer and distribution}customer relations (Andersson and MoK lleryd, 1996a, b,1997). The article also complements a set of longitudinalempirical studies of the development of mobile telephonyin Sweden.2 Empirical accounts from Sweden indicatethat within the area of mobile telephony, many of theunderlying driving forces have, in a short period of time,changed the relationship structures between companies.3

In one previous study of the Swedish distribution sys-tem for mobile telephony, the distribution channel conse-quences, with a focus on mobile telephony services andproducts, of increased technological convergence be-tween telecommunication and information technologywas introduced as an important phenomenon and re-search area (Andersson and MoK lleryd, 1997). One of theobservations made was that channel actors changed bothexisting and developed new exchange relationships in thedistribution networks concurrently with the develop-ment of technological convergence and new integrated

P. Andersson, B. Mo( lleryd / European Journal of Purchasing & Supply Management 7 (2001) 121}132 123

Table 1Distribution of case companies on company size and sector. Large:more than 1000 people employed. Medium sized: from 100 up to 1000.Small: up to 100

Company size sector Large Medium Small

Manufacturing 11 5Building constr. 1 1Transportation 4Power and energy 1Wholesaling 4 1Retailing 3 1Consulting 3 6 1Financial services 2 5 1Other prof. services 3 5Public org. 2 1

systems of products and services. This paper adds an-other piece, adding purchasing and the users to thepicture, using the concept of mobility as stepping-stone.

6. Sources and notes on method

Drawing on interview data and selected written sour-ces, the paper discusses each of the three questions andproblem areas. Descriptions and analyses are based oninterviews with representatives of private and public mo-bile telephone buyer and user organisations, performedduring the period 1997}1998. In total, 61 in-depth inter-views have been performed with managers of purchasingdepartments, involved in the purchasing of "xed teleph-ony, mobile telephones, IT systems, and connected servi-ces. A variety of companies, purchasing behaviours, anduser mobility situations have been covered in the inter-views, as indicated in Table 1.

In 9 of the 31 cases with large companies more thanone (2}4) interviews were performed. The majority ofcompanies are based in one country (Sweden). In somecases, representatives of subsidiaries in large interna-tional companies were interviewed. The majority of theinterviewed are purchasing managers.

To complement the interviews with organisationalbuyers and users of mobile telephony and integratedsystems for mobility, a selection of interviews were per-formed with representatives of organisations supplyingparts of new systems for increased mobility, e.g. withcompanies involved in supplying mobile data systems.Data have also been drawn from earlier interviews withdistribution channel actors in the mobile telephony andcomputer sectors.

For insights into the actual use of mobile telephony atwork, the overall study also encompasses 16 personal,in-depth interviews with a selection of users in variousindustries. The secondary sources used are mainly of twotypes. Telecommunication research with a special focuson mobile data and mobile telephony belongs to the "rst

category. The second category is to a large extent indus-try speci"c. Mobility means di!erent things in di!erentindustrial sectors and the systems implemented for in-creased mobility di!er. Hence, this group of secondarysources contain accounts of di!erent uses new, integratedmobile systems in di!erent industrial sectors. Forexample, important insights into the use of mobile sys-tems in the industrial manufacturing sector today can befound in accounts of how industrial manufacturers intheir sales and after sales service activities implement anduse new service support systems, based on increasedmobility.

Preparatory studies indicated sometimes large di!er-ences between companies within the same industry con-cerning the implementation of strategies for increasedmobility. The study's buyer focus links to Hippel von(1988) and the idea that it is necessary to replace thenotion that innovative activities are only carried out bymanufactures. Hippel von (1988) uses the concept leadusers which means those users who face needs that will begeneral in a marketplace, but who, according to vonHippel, face them months or years before the bulk of thatmarketplace encounters them. He also argues that suchlead users are positioned to bene"t signi"cantly by ob-taining a solution to those needs. In the preparations forthe study, new solutions for increased mobility were inmany cases driven by such lead users. Thus, it was ob-served that mobility could take many di!erent shapesamong the 61 companies in the 10 di!erent industries.However, the discussion and analysis in this paper willnot account in detail for di!erences on a company level.Most empirical accounts and discussions will here beaggregated, leaving the detailed accounts for further in-depth case studies.

However, it can be mentioned that in this study, casesof lead users were found both in di!erent types of organ-isations and in di!erent types of organisational functions.As to the former, some consultancy "rms were seen to beon the frontline of implementing &mobile o$ce' systems.By using mobile data systems, some of these service "rmsreduced o$ce space by over 50%. Consultants spentmore time out in the customer organisations, and thepersonnel was able to access on-line the company's in-tranet and other data systems. As regards progressivelead users within organisations, these were mainly foundwithin functions that were mobile already before. Forexample, in manufacturing companies, mobile data solu-tions were used in often very progressive sales and aftersales service units.

7. Theory and framework

A framework is needed which can capture the organ-isational changes associated with the development, sales,purchase and implementation of integrated technological


4 Johansson and Mattsson (1991). Gadde and Mattsson (1993) alsoargue that: `The major advantage provided by a network approach todistribution is when analysing change processes2. Changes in thegovernance structure deal with how actors are related to each other.Actors terminate relationships and establish new ones, entry and exit of"rms can be observed on the network level. Also changes in the strengthand mutuality of relationships are important aspects of changes ingovernance structures.a (p. 3).

5As described early in e.g. McCammon Jr. (1964).6Part of this discussion has earlier been presented in Andersson

(1992, pp. 47}68).7For a review and introduction to the Industrial Network Approach

see Axelsson and Easton (1992).

8Araujo and Easton (1988).9For a review and reconceptualization. see Orton and Weick (1990).

At the same time as Weick's article was published four other organisa-tional perspectives were published: transaction cost economics (Will-iamson, 1975), institutional theory (Meyer and Rowan, 1977),population ecology theory (Hannan and Freeman, 1977), and resourcedependence theory (Pfe!er and Salancik, 1978), see list of references. AsOrton and Weick (1990) note, each of these four perspectives has a moredistinctive paradigm, a more compact theory, and more empiricalsupport than is true of loose coupling. Without comparison, the "rst ofthe "ve paradigms, i.e. transaction cost economics has attracted mostinterest among distribution and marketing researchers.

systems. A broad theoretical framework is outlined tocover three theoretical requirements: (1) we need a gen-eral systemic framework that takes into account thedynamic aspects of the whole system of companies thatare interconnected in the sales, purchasing and use ofintegrated telecommunication and information techno-logy systems, (2) given the observed dynamics includinginertia and change in the implementation of new systems,we need concepts that can capture both stability andchange in relationships, including the interdependencebetween the two, and (3) we need a model for understand-ing and describing the actors and functions involved inorganisational purchasing, including the way they areinterconnected.

The three theoretical requirements are covered bya network view of the system in focus, by a discussion onthe dynamics of loosely coupled systems, and by a buyingcentre model of the purchasing organisation.

Firstly, with an industrial network perspective, eachrelationship is seen as embedded in a network of otherrelationships, which a!ect * and are a!ected by * theindividual relationship. Instead of having to de"ne thespeci"c &levels' connected to each actor (manufacturer,wholesaler, retailer, customer) the position in the totalinter-organisational network becomes an important as-pect. It follows from this that change and evolution thusbecome strongly connected to all the actors' positionchanges in the intra- and inter-organisational networkover time.4 A change in the total activity structure ofa network will be strongly interconnected with changesin the interactions and relationships between the actorsin the intra- and inter-organisational network, i.e. withinand between organisations (Gadde and Ha> kansson,1994). Important innovations in marketing systems canbe introduced by units outside a narrowly de"ned systemor network.5

Implicit in di!erent types of industrial network ana-lyses is the notion that strongly bonded connections andrelationships de"ne networks.6 The term &network' isfrequently associated with words like &link', &connection'and &interdependence'. Descriptions of bonds of di!erenttypes and strengths imply that actors can be tied to eachother in di!erent ways.7 But industrial network re-

searchers have also pointed to the existence of weak,potential and residual relationships in networks.8 In ad-dition, descriptions of the mechanisms by which actors innetworks through indirect connections were able to in#u-ence other actors, have further strengthened the notionthat industrial networks are multidimensional systems ofboth tightly and loosely coupled entities.

Secondly, the concept of loosely coupled systems hasappeared in a number of organisational studies (Glass-man, 1973; Weick, 1976).9 According to Weick, loosecoupling can be de"ned as a situation in which elementsare responsive, but retain evidence of separateness andidentity. Change e!orts are basically a!ected by the pat-tern of tight coupling within and loose coupling betweenelements in the system. Flexibility in industrial networksis required to modify current activities so that certainactors, like e.g. a buying centre adapting the organisationto technological convergence can adapt to non-transientchanges in the network. Actors in the buying centre mustbe able to detect changes and retain a su$cient pool ofnovel responses to accommodate to these changes. Buttotal #exibility can be dangerous as it makes it impos-sible to retain a sense of identity and continuity (Weick,1969). Stability, in turn, can provide an economicalmeans to handle new contingencies. The trade-o! andthe interdependencies between loose and tight couplingsin industrial networks is in this study linked to thefollowing three important trade-o!s: (1) localised adapta-tion and systemwide standardisation, (2) adaptability/diversi"ed responses and adaptation e$ciency, and (3)behavioural discretion with self-determination andcentralised control with longer chains of consequences.

Each "rm's opportunities to alter its position in thedistribution network can be assumed to depend on theemerging patterns of loose and tight couplings in theintra- and inter-organisational network. Actors mightneed e$cient tools for integrating organisations, e.g. inresponse to technological changes like convergence ofestablished technologies, but tightly coupled actors canmean a loss of #exibility and adaptability in times whenstructural changes occur. For single actors there canemerge questions concerning the balance between localadaptation and overall standardisation of activities. Thiscan be conceptualised as a trade-o! between loose and


Fig. 1. The general analytical framework: three focal perspectives andpoints of analysis, 1: Suppliers}buyer links; 2: buying centre links;3: buyer}customers links.

tight coupling. In this particular case, it can be related toe.g. a trade-o! between localised adaptation and central-ised standardisation of contacts in a buying centre. Animportant managerial issue can be to change the organ-isational contact patterns in order to balance the degreeof local adaptation with the need for centrally controlledaction. Mutuality gives certain self-determination in rela-tion to each other and towards other, non-related actors,but also restricts each actor's degree of autonomy.

Thirdly, building on Webster and Wind's (1972) estab-lished model, the organisational buying process can beviewed as taking place in a buying situation, where theindividuals and groups of the buying centre can take ondi!erent buying roles, as users, deciders, inyuencers,buyers and gatekeepers. It can be anticipated thata change towards buying integrated solutions will beconnected to changes in the buying centre, includingchanges in the roles of the participating actors. This alsoincludes changes in the way the buying centre is formallyorganised and on what organisational levels and in whatdivisions or units that the new decisions are taken. Moreimportant, changes in the organisational structure alsoinclude changes in the buying centre's internal contactpatterns and in the interactions and relationships withthe buying centre's system suppliers and in the relation-ships with the customers subject to the new usage of theintegrated system solutions.

In general, analyses of intra-organisational relation-ships linked to purchasing are an established researchfocus in purchasing. For example, in 1988, Fearon re-ported the results of a major purchasing organisationresearch involving the purchasing departments of 297large US organisations. Departmental size and composi-tion, the degrees of centralisation and decentralisationemployed, hierarchical reporting relationships and therelationships between purchasing and other departmentswas in focus of this and similar, following studies. Thepatterned, repeated interactions that characterise ongo-ing purchasing processes were increasingly coming infocus of organisational, purchasing research in the 1980s(Ronchetto et al., 1989). In other studies, the purchasingfunction's relationships with other, single departments orfunctions, were investigated: links to top management(Ammer, 1989), to internal users (Leigh and Rethans,1985), to transportation (Walters, 1988) to mention a few.

Following the three research questions and the theor-etical discussion above, the paper suggests a comprehens-ive framework, divided into three parts. The "rst part (1)describes the buying organisations' links backwards tothe supplying network for mobile telephony and integ-rated solutions for mobility, building partly on earlierdistribution channel studies (e.g. Andersson and MoK l-leryd, 1997). Adding another step in the channel, thisperspective is complemented with a focus on the buyersand changes in buying centre organisation and behav-iour (2). The third part (3) adds the link to the actual users

confronted with the new form of mobility, including thebuyers' relationship with their customers. The three focuspoints are summed up in Fig. 1.

The network perspective is used as a general view ofthe system in focus. The links backward and forward(questions 1 and 3) in the system can be described interms of loose and tight couplings. The network andloose coupling conceptualisations are linked to the buy-ing centre and buying organisation model when an-swering the question about changes in the purchasingorganisation (question 2).

8. Mobility and organisational changes:empirical observations

Three research questions and general problems areaswere identi"ed: (1) the organisation of the links back-wards in the supplying distribution network when mov-ing towards increased mobility, (2) the e!ect of mobilityand system integration on the purchasing organisationand operations of the buyers, and (3) the e!ect of mobilityon the way buyers and users of the systems relate to theircustomers. Aspects of each of these three problem areaswere brought forward in di!erent ways in the interviewswith company representatives.

8.1. Mobility and links to the supplying network

How do buying organisations establish new andchange the old established relationships backwards withsuppliers in the distribution network when implementingintegrated systems of products and services for increasedmobility? These were some of the general "ndings fromthe company interviews:

f Mobility and links to changes in buyer}supplier relation-ships. Overall, it is di$cult to point to a clear-cutrelationship between an increased attention to mobil-ity in the buying organisations and changes in theorganisations of the contacts back to the supplyingorganisations. However, it can be observed from theinterviews that the purchasing of mobile telephones


and services had changed certain aspects of the rela-tionships with suppliers. In many of the 61 companies,the costs for mobile telephones and service operationshad increased, leading to a centralisation of contractnegotiations. This was in some cases a re#ection of anincreased integration of the supplies of products andservices for both "xed and mobile telephony in thepurchasing organisations. It was linked in several casesto a concentration of contacts to one service operator.(Large buyer organisations also negotiated largehardware contracts directly with the suppliers/manufacturers).

f Changes in buyer}retailer relationships. As regards therelationships with retailers, two observations can bemade. Firstly, in several cases the buying organisationsindicated a trend towards weaker links with retailersconcerning purchasing contracts for mobile tele-phones. On the other hand, several organisations alsoindicated more intense contacts with retailers in mat-ters concerning di!erent types of after sales services.Co-ordinated relationships between large, geographi-cally spread buyer organisations and correspondingly,geographically spread, nation wide retail chains hadnot been developed to any large extent. The tightestbuyer}retailer relationships remained local, i.e. the re-lationships between local departments of the largebuying organisation and its nearest retailer(s).

f New buyer}wholesaler relationships. In a few cases,especially in large organisation, there was a trendtowards internalisation of the retail function, meaningthat an internal intermediary function for mobile tele-phones was established within the organisation. Thisnew unit, in turn, established relationships with whole-salers of mobile telephones, taking advantage espe-cially of the latter's' e$cient logistical and physicalhandling functions. In many cases, when internal func-tions had been established it had also weakened thelinks between the users of the telephones and servicesand the external supplier organisations.

f Centralised buyer}operator relationships. As indicatedabove, in many cases the centralisation of the contactsbetween the buying organisation and the operatorshad continued. In several cases, the operating servicecontracts were negotiated between the operator andthe management group of the buying organisation,especially in small- and medium-sized organisations.In some cases, "xed and mobile telephone servicecontracts had been handled by an IT department,sometimes in co-operation with a special, internal con-tract group. These buyer}operator contacts in manycases excluded internal departments involved in thepurchasing of the hardware products.

f Few and weak buyer}system integrator relationships. Inonly one case out of 61, a system integrator playedan important intermediary role in connecting thesystem}buying organisation with the suppliers of the

di!erent components. This re#ected the fact that fewcompanies had taken major steps towards a strategic useof integrated system solutions between "xed and mo-bile telephony and between telephony and IT systems.

It was stated above that speci"c links between changes inuser mobility and subsequent changes in the relation-ships with suppliers were di$cult to see in the inter-viewed organisations. However, it could be observed inone service division of a manufacturing company howa change towards increased mobility of the service divis-ion's car #eet required a change of operator. In anothermanufacturing company, when a new system for mobileservice technicians was to be implemented, the changes inorganisational links were mainly internal, i.e. betweendi!erent departments and groups of the buying centreinvolved in the change process. The contacts with re-tailers were not a!ected to the same extent. In a thirdcase, it could be observed how the buyer}operator rela-tionship was strengthened when a new system for mobileservice technicians was implemented. The buyer had al-ready installed a system for which there was only onesupplier available in the market. In order not to risk anydisturbances in this relationship when also implementinga new mobile telephony-based system, the buyer re-mained and deepened the relationship with the estab-lished operator.

In several cases, the introduction of more mobile ser-vice and sales organisations was built on an incrementalimplementation strategy. For example, in order not tolose control over con"dentiality and how informationwas exchanged between the buyers and their customers,the buyers preferred implementation in small steps. Thisalso meant that no radical changes in the existing rela-tionships with supplier organisations were made.

8.2. Mobility and adaptation of the purchasingorganisation

How does increased mobility and system integrationa!ect the purchasing organisation and operations of thebuying centre? These were some of the general "ndingsfrom the company interviews:

f Management's role as decider in the buying centre. Asregards mobile telephony in general, one observationwas that management's links to the units where pur-chasing decisions were made were weak in the sensethat its passive role as controller of the mobile teleph-ony and telecom costs was the most obvious. Manage-ment became more involved as in#uencer and deciderin situations of change. That happened for examplewhen a new operator service contract was to be negoti-ated, perhaps including a change of operator. It wasalso indicated in interviews that many companies,small and medium sized as well as the largecorporations, anticipated a stronger link between


10Part of this discussion has earlier been presented in Andersson(1992, pp. 47}68).

management, other internal purchasing actors, andalso external supplier organisations in the future, asthe systems of products and services became morecomplex and more integrated. In some cases (small-and medium-sized organisations), management wasalso involved in general decisions concerning thetelephones, for example what standards of telephonesthat the organisations should have.

f Separate buyers of services and mobile telephones: Inmost cases, the actual buyers of the services and thetelephones were separated. The service contracts weregenerally negotiated higher up in the organisation,nearer management, while the hardware contracts, e.g.with retailers, generally were handled by a purchasingdepartment, for example by a separate small unit with-in, or closely connected to, the administrative functions.

f The users and their gatekeepers and inyuencers. Theusers' options to choose retailer and mobile telephonewere often restricted by a manager within the users'organisation, for example a sales or service force or-ganisation. Thus, when contracts for the hardware hadbeen signed, there were often one or several units or&levels'within the organisation that functioned as gate-keepers and in#uencers between the suppliers and theactual users.

Overall, no marked changes in the purchasing organisa-tion connected to a major change in mobility or systemintegration were reported by the buying organisations.However, the organisations indicated that they could seesome possible changes in the future, given an increasedcomplexity with an integration of telecommunicationand IT systems, starting with an integration of the pro-curement of "xed and mobile telephony systems. Overall,changes in the contact patterns within the buying centres,in the majority of cases re#ected a trend towards central-isation of certain negotiations and contract decisions.

8.3. Mobility and changes in the links tothe user+s customers

How does increased mobility change the way buyersand users of the systems relate to their customers, i.e. howdoes it a!ect their way of doing business and interactionwith the customers? The information provided by the 61organisations concerning this question was in generalvery sparse. Some of the general "ndings from the com-pany interviews about the e!ects of increased mobilitywere listed in the section on &Mobility'. Thus, increaseduse of systems that in various ways could a!ect mobilitywere in most cases related to increased work #exibilitythrough increased mobility, improved internal co-ordi-nation and communication through mobile communica-tions, improved and changed customer services throughuse of mobile solutions, changes in the internal organisa-tional structures and processes through new solutions,

changes in the inter-personal communication within or-ganisations, changes in security and control through newmobile solutions, and a general improved operationale$ciency and productivity with the new mobile solution.

One of the main reported e!ects on customer relation-ships of this was connected to administrative routines.The use of integrated systems, including mobile data, hadchanged the opportunities for e.g. sales and service per-sonnel of the buyer/user organisation to perform manymore administrative activities out in the customer organ-isations, in real-time, on-line connections with the homeorganisation. This was apparent, for example, in banksand insurance companies and also in manufacturing or-ganisations where various service data was crucial. It wasargued by some that certain parts of the sales processcould be shortened, leaving more room for discussingother, value-added aspects of the interaction processes.Some anticipated an increased knowledge about the cus-tomers in the sales and service units, and subsequentlyalso in the rest of the organisation, as a result of this.Lastly, some also argued that the implementation of thenew systems, based e.g. on mobile data, could actuallyhave the opposite e!ect on customer relationships. Thatis, a strict use of new technological systems in the interac-tions with customers could negatively a!ect the oppor-tunities for #exibility and adaptability.

9. Discussion: interdependencies between loose andtight couplings

If we look at the total system, as the picture emergesfrom the interviews, what changes in the patterns of looseand tight couplings between the actors can we observe?Building on the framework with the three focal trade-o!sand interdependencies between the two, it is possible toobserve a few emerging changes in some companies. Thelinks to changed mobility varies and as stated above, inmany cases direct links between changed mobility andchanged networking behaviour among the observed ac-tors are di$cult to con"rm.

Relating to the three chosen, central trade-o!s andinterdependencies between loose and tight couplings,the interviews indicate some examples of emergingchanges. These are introduced below, with an extended,theoretical description of the focal trade-o!s andinterdependencies.10

9.1. Localised adaptation and system-wide standardisation

Loosely coupled units can contribute to system-widestability by adjusting to local circumstances without


a!ecting the whole system, that is, the rest of the systemcan function with greater stability. Loose coupling cancontribute both to stability and to an increased variabil-ity by allowing local units to adapt to partly con#ictingdemands in the system. Internal system stability based ontight couplings can be one of the obvious outcomes ofsystem-wide standardisation. If the context in which thesystem is embedded is highly heterogeneous, demandinga high degree of adaptability to local conditions, a highlystandardised, tightly coupled system is less likely to beable to adapt as swiftly as a system with loose couplingsbetween the units. The positive e!ects of localised ad-aptations and variety creation in the system is balancedagainst the di$culties to standardise, stabilise and per-form more e$ciently some of the activities in the system.However, if the central actor starts from a situationwhere actors are tightly coupled, it is more likely thatchange interventions will have large e!ects. If the aim isto increase sub-system adaptations by decreasing centralcontrol and co-ordination, it is only possible if certainactivities or mechanisms of the relationships are keptstable, perhaps made even more tightly coupled betweenactors. The reverse change can also be posited. A centralactor or actors that see the necessity to centralise controlin order to achieve changes might have to rely on parts ofthe systems being loosely coupled, thereby increasingoverall system stability at the same time that a certaindegree of localised adaptation and variability is main-tained.

What could be observed in the 61 companies related tothis?

f As noted in the empirical description above, the intro-duction of mobility in the organisations of the studyshowed both signs of localisation and (limited) system-wide standardisation. Mobility could mainly be foundin a number of activities close to the customers, in salesand in service support organisations. Thus, mobilitywas localised to the customers, but was often standar-dised across the whole sales and/or service organisation.

f Due to fairly loose couplings between the users, e.g.sales or service support units, and the rest of thebuying centre, the users seemed to be free to developtheir own systems of mobility, suitable for the opera-tions controlled by the users. However, tight couplingswithin the user group could enhance the developmentof standardised systems and routines for how mobilityshould be implemented, e.g. in the relationships withcustomers.

f Looking at the system as a whole, encompassing thesupplying actors to the buying organisation and itscustomers, the picture of a loosely coupled systememerged in most cases. Integrated systems for mobilitycovering tight couplings between involved actors wererare. Mobility in use between the "nal user group andits customers was seldom built on a co-ordinated,

internally adapted and tightly coupled system of sup-plying and buying units.

9.2. Adaptability with diversixed responses andadaptation ezciency

Loose coupling in organisations, systems and net-works can be important sources of adaptability. Loosecoupling decreases the necessity for major changes. Thepositive e!ects of loose coupling of sub-units in a systemis a consequence of the fact that it allows the units todetect changes in the surrounding context, to adapt tolocal circumstances and to adapt to con#icting demands.Tight coupling allows units in a system to improve ad-aptation. Changes within the tightly coupled system canbe the result of minor adaptations, however, on thewhole, these adaptations often further strengthen thetightness. An important trade-o! for actors in dynamicsystems is related to decisions to exploit present oppor-tunities through adaptations or to increase adaptabilityin order to be better able to exploit future opportunities.This can also be described as a trade-o! between stabilityand #exibility in the system. In order to gain an increasedsensitivity and #exibility, built on localised adaptationsand variability, actors might have reduced the short-termstability which tightly coupled systems, based on adapta-tions and close contacts, contribute. On a systemic level,the trade-o! between adaptation and adaptability canactually take the form of interdependencies. Thus, thestability and ongoing adaptations in other parts cansupport an actor aiming for increased system #exibilityby letting actors in some parts of the system act morefreely in relation to the rest of the system.


f As stated above, when mobile systems had been imple-mented in service and sales organisations the usersseemed to be free from the rest of the organisation todevelop their own systems of mobility and suitable forthe operations controlled by the users. However, tightcouplings within the user group in many cases seemedto leave limited space for adaptability. When integ-rated systems for mobile telephony, "xed telephonyand mobile data had been implemented, the use wasoften connected to a fairly low degree of adaptabilityto external conditions.

f On the other hand, systems for increased mobility inmany cases seemed to have emerged, changed and beendeveloped over a long period of time. In some serviceand sales organisations, especially in manufacturingindustries, systems had been in use for a long time andhad been adapted through incremental changes.

f Within the buying centres of the buying organisations,some management groups had developed fairly loosecouplings to the other units of the buying centre. This


had left them room for a certain degree of adaptabilityas concerned buying decisions, but within the broaderframes and contracts that had been negotiated by themanagement group. The management groups' buyingroles as in#uencers and deciders were restricted togiving the general frames for the more detailed pur-chasing decisions.

9.3. Behavioural discretion with self-determination andcentralised control with longer chains of consequences

A direct e!ect of loose coupling in systems is behav-ioural discretion, i.e. the capacity for certain degrees ofautonomous action. Loosely coupled sub-unit are lessrestricted when it comes to creating and choosing allian-ces with units outside the focal system. Tight couplingsextend the chains of consequences that will #ow betweenunits in the system. Members of the tightly coupled partstabilise the system, while each semi-autonomous unitwill be a!ected by and will have to react and adapt toother units' actions. In contrast to this, change can bemore di$cult to achieve in tightly coupled systems whereunits are restricted in their ability to experiment and todevelop a sense of e$cacy. In order to balance the cen-tralised control of tightly coupled systems, powerful ac-tors might encourage a higher degree of autonomy incertain parts of the system. Loosening the couplingsbetween certain units, creating a higher capacity forautonomous action may mean that part of the stability ofthe system will be reduced. A system where the actors aimfor an increased centralised control of actions might onlybe able to pursue this strategy by simultaneously discon-necting from or successively de-integrating certain actorsor sub-systems. Increased centralised control can only beachieved if a certain degree of self-determination con-cerning actions and other counterparts is given to someactors in the system.


f It was suggested above that within the buying centre ofthe buying organisations, some management groupshad developed fairly loose couplings to the other unitsof the buying centre. They were leaving room fora certain degree of adaptability as concerns buyingdecisions, but only within the broader frames andcontracts that had been negotiated by the manage-ment group. Where a structure of both loose and tightcouplings existed between the groups of the buyingcentre, purchasing decisions connected to mobiletelephony were linked to both a certain degree ofself-determination and a certain degree of centralisedcontrol. It was often argued by the interviewees,however, that a movement towards more integratedtechnological systems, would require a higher degree

of tight couplings between the management group andthe other groups involved in the purchasing decisions.

f Within the groups that had implemented systems forincreased mobility, the standardisation of the useseemed to be linked to a centralisation of decisionswithin the group, e.g. to the sales management orservice support management groups.

Going back to the "gure above, what general e!ects ofmobility on the whole system can we see? Three separateresearch questions were posed at the outset concerningthe links between changed mobility and e!ects on thebuyer}supplier relationships, the purchasing organisa-tion and the buyer}customer relationships. The threequestions and perspectives are interconnected. As statedabove, among the 61 interviewed organisations, therewere very few signs of major attempts among the buyingorganisations to move towards an overall strategic viewon the integration of mobile telephony with other formsof communication and IT. From this can be concludedthat &mobile organisations', &mobile o$ces', etc. are con-cepts and ideas developed among the hardware suppliers.The system integration and inter-organisational adapta-tions needed to implement such systems have so far notmatched the ideas and visions outlined by many of thebig suppliers. However, in some industries, a few leadusers can be found that over time have used the techno-logy to become more mobile and time e$cient. Someorganisational units among the buyers have by traditiondeveloped and used such integrated systems, for example,sales and service support organisations of manufacturingindustries and certain corporate sales and service units inbanks and insurance companies.

10. Conclusions

This "rst explorative step in the research on mobilityand its e!ects on intra- and inter-organisational relation-ships generated a few tentative answers to the threequestions posed.

How do buying organisations establish new andchange the old established relationships backwards withsuppliers in the distribution network when implementingintegrated systems of products and services, e.g. for in-creased mobility? The interviews with purchasing organ-isations indicated few radical changes in the exchangerelationships with supplying organisations as a result ofthe implementation of new system solutions for increasedmobility. Very few of the organisations had a strategicview on mobility. The service and sales organisationswere those where increased mobility could be observed.However, in several of the organisations it was anticip-ated that new integrated telecommunication and IT solu-tions would probably require changes in the organisationof purchasing. In a few cases, relationships with so-called&system integrators' had been established.


How does increased mobility and system integrationa!ect the purchasing organisation and operations ofbuyers? It was anticipated that new integrated telecom-munication and IT solutions would require changes inthe organisation of purchasing, including a more centralposition for management as in#uencer and decider. Insome organisations, the same emerging role was anticip-ated for the IT departments. In some organisations, therewere very di!erent roles for the buying centre groups forthe purchasing of hardware as compared to the teleph-ony services. In general, management played a morecentral role in contract discussions when service opera-tion contracts were signed.

How does increased mobility change the way buyersand users of the systems relate to their customers, i.e. howdoes it a!ect their way of relating to their customers?Although the study at this stage has focused more on the"rst two steps, i.e. covering the purchasing}supplier linksand the buying centre organisation and links, the studycould also point to some aspects of the changing linksbetween the buyers/users and their customers. The cha-nges were mainly observed in the relationships betweenthe sales or service support groups and the customerorganisations. There were indications of both increasedadaptability towards customers (being able to learn morewhile spending more time within the customer organisa-tions with the help of on-line mobile data connections)and lack of #exibility (as the new technical system solu-tions led to more standardised behaviour in the relation-ships with customers).

11. Re6ections on future research

This paper is the "rst in a series of studies of mobilityin use. One aim of the study has been to outline a generalframework for analysing the links between mobility andchanges in buyer}supplier relationships, in the purchas-ing organisation including the link between purchasingand use, and "nally the links between the buyer}user andits customers. To complement the tentative results of this"rst study, it is necessary to go further into the details ofmobility. One central problem area in future studiesshould be to study more deeply mobility-in-use in order tobe able to unravel aspects of the links between changes inmobility, changes in buying behaviour and organisationand changes in the networking behaviour of companies.

Acknowledgements

The authors are grateful to members of the Depart-ment of Marketing, Distribution and Industry Dynamicsat Stockholm School of Economics for their helpful com-ments about this research. The authors also wish tothank the editor and the reviewers for their assistance.

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Buying centre consequences of technological convergence

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