SELECTION OF POTENTIAL SUPPLIER PARTNERS IN A TURBULENT ENVIRONMENT – A Theoretical Framework for Partner Selection in the Infocom Market

The purpose of this study is to build a preliminary framework for the selection of partners for partnerships in the Infocom market. The study draws mainly from theory, but also empirical knowledge gained from company interviews is used. A preliminary framework is presented as a basis for future development. Introduction This study examines partnerships in the Infocom sector. The Infocom sector consists of Information and Communication Technologies (ICT) and media communications (graphical and electronic communications). The highly competitive and volatile nature of the global environment in this sector motivates companies to form co-operative relations in their search for competitive advantage. Partnership is a phenomenon that has received relatively wide attention in the literature recently. Partnerships have been studied in different contexts, but mainly in traditional manufacturing industries with tangible products and production facilities. Research topics have covered issues related to different aspects of partnerships, like reasons for partnerships, success factors and benefits of partnerships, and partner selection criteria (Lorange, Roos and Bronn 1992; Ellram 1990 and 1995; Mohr and Spekman 1994; Fram 1995). The basic assumption of this study is that some of the factors affecting partnership behaviour and partner selection are different in the context of the highly turbulent Infocom business. It has also been noted that there is still lack of knowledge linking alliance theory (what to do) to alliance practice (how to do it) (Frankel, Whipple and Frayer, 1996, 47). The purpose of this paper is to build a preliminary theoretical framework for the selection of partners in a turbulent environment and to explore the criteria for the partner selection. This study draws both from the theory and the preliminary empirical knowledge that the writers have gained by interviewing company managers responsible for partnerships and partner selection in the Infocom sector. The concept of partnership There may not be a commonly accepted definition for partnering. Broadly partnership refers to a variety of managerial practices and organisational designs that enhance and maintain collaboration (Barlow and Jashapara, 1998, 88). A partnership can be seen as a hybrid governance structure between markets and hierarchies. The range of possible relationship styles between the buyer and supplier varies from a pure arm's length relation to vertical integration (Cox, 1996, 63; Webster, 1992, 5). A partnership between a buying and a supplying firm has been defined as a mutual, ongoing relationship involving a commitment over an extended period, and sharing of information as well as the risks and rewards of the relationship (Ellram, 1990, 8). The definitions of partnership usually stress co-operation, trust, and mutuality. Partnerships in the Infocom sector seem to involve elements like shared planning of the product/service concept, sharing of information, risk and rewards, and responsibility for their own distinct parts of the final product/service. Infocom market This study focuses on companies offering information services through an Internet portal. These companies are a part of the so-called Infocom market, the result of the converging markets of telecommunications and media communications. The Infocom sector (or Infocom industry) is described in figure 1. Supporting industries (speciality inputs) • part and component manufacturing • contract manufacturing