The grounds for researching the business network efficiency
Beata Barczak, Cracow University of Economics, Poland
Abstract
The aim of this article is to present the grounds for researching the business network efficiency. The efficiency assessment of business network needs a multi-level approach which reflects the complexity of economic relationships formed in them. In particular, the article shows: the network effects, efficiency of collaboration within networks and the theses of the proposed concept for researching the business network efficiency. This may constitute the foundation for the diagnostic and project works. The author has adopted the following assumptions: 1) the efficiency assessment of business network needs a multi-level approach, which reflects the complexity of economic relationships formed in them; and 2) a business network efficiency evaluation should be based on efficiency measures/criteria relating to the achievement of goals in the organisation as a whole, within a coherent efficiency system. The final part of the article presents a fragment of empirical research. The study aimed to carry out multi-criteria evaluation of efficiency of selected business networks.
1. Premises
Business networks consolidate their importance in the global economy. Currently they are considered amongst the most interesting solutions having many advantages, which extend the number of strategic options available for an enterprise, they may facilitate easier migration towards profit - to sectors offering better development opportunities. At the moment they represent one of the solutions, which help face growing competition. They boost the innovativeness of member enterprises as well as the sectors in which the network operates.
The topic of networks in literature is discussed by, e.g. Jarillo, Baker, Castells, Nohira, Ghoshal, Kay, Bartlett, Ebers, Grandori, Soda, Mattson, Miles, Snow, Czakon, Niemczyk. In general, two approaches may be distinguished: 1) institutional, focusing on the development and improvement of the existing coordination mechanisms and determination of qualities which differentiate this type of structures from other organisational forms and 2) functional, stressing the strategic function of network organisations and the role of communication and information technology in the process of continual changes and gaining competitive advantage. It should also be mentioned that the idea of network organisation was significantly influenced by economic theories, including the transaction cost theory (Williamson, 1994), and theories related to building network economy and information-based societies (Toffler, 1997; Drucker, 2009), and also new micro-economic theories based on the complexity and complex systems theory, theories of evolution and development of organisation and of organisation as a complex adaptive system.
One of the most important grounds for the development of organisational networks and an interesting research perspective is to take the process into consideration in terms of efficiency. Although the issue of networks is widely discussed in specialist literature, relatively little research has been devoted to measuring its efficiency. The main reasons for this include:
The last reason seems to be particularly important, having regard to the fact that the analysis of the whole network can be difficult (or even impossible) because networks frequently do not form separate, (in legal terms), business entities. In this matter certain examples of research approaches can be discussed. For example, the approach of P. Ingram and T. Simons (Ingram&&Simos, 2002), who believe that the main measure of a network is profitability compared to other companies from outside the network. The above-mentioned comparison is very difficult to undertake and needs a lot of time because it requires data from the whole sector. Another difficulty is the question of how far the firm’s performance results from the membership of the network and how far from independent operation. B. Kogut in turn emphasizes that individual networks can positively influence the performance of its members, proportionately to the scope and amount of information contributed to the group (Kogut, 2000, pp.406–407).
Afuah believes that the firm’s – part of a network – performance will not always be good, especially when technology develops rapidly and the network fails to keep up with the developments (Afuah, 2000, pp.387–404). Given these findings, the aim of the article is to present the grounds for researching the business network efficiency. The author has adopted the following assumptions:
2. Network efficiency assessment – selected approaches
The literature describes examples of studies on the efficiency of network structures. The following are the characteristics of selected the attitude research.
The concept Task Performance Benefits by Luis M. Camarinha-Matos
The concept of Task Performance Benefits, developed by professor Camarinha-Matos, can serve as an example of measuring benefits from collaborative networks (Camarinha-Matos, Abreu, 2007, p.599). It has been inspired by analyses of social networks and other concepts, including transaction costs and the theory of games. This concept has been based on the assumption that the notion of benefits is complex and extends not only to economic aspects but also to relationships. The author claims that the actual meaning of benefits depends on the basic system of values applied in any context.
This concept treats benefits as abstract and measurable values. The effects of actions taken can be:
The basis of this concept is the assumption that the concept of benefits is a complex notion, encompassing not only economic, but also issues of mutual relations. Thus, the effects of measures taken may be independent (the benefits of a completed task - KzWZ) or dependent (depending on the benefits of a completed task - ZKzWZ) from the partners. An enterprise of high reputation whose membership in the network results in winning a lucrative contract (otherwise impossible to win for other partners) can serve as an example of a dependent benefit. Therefore, benefits in networks can be divided as follows (table 1).
Table 1. Types of benefits from collaborative networks
| Self-benefits (KW) – achieved by the pi enterprise as a result of performing the zi task, within the total number of independent L tasks and the total number of dependent M tasks | |
| Received Benefits (KO) – Achieved by the pi enterprise when the pi enterprise performs the zi task (perspective of the pi enterprise) | |
| Contributed Benefits (KD) – benefits from the pj enterprise to the pi enterprise as a result of the performance of the zi task (perspective of the pj enterprise) | |
The description and the understanding of benefits from collaboration is the key condition that allows a paradigm of different forms of collaborative networks to be assumed. The understanding is also a starting point for establishing the relevant performance indicators to be used in the decision-making process on different levels: network management, determining network forms and membership.
Structural approach
In the structural approach the performance of a firm in a network depends on its structure understood as a degree of embeddedness in the network. The main author and advocate of this concept, M. Granovetter, claims that all forms of exchange contain elements of networks, markets and hierarchy (Granovetter, 1985).
Additionally, together with other authors (Rowley, Baum, Shipilov, Greve, Rao,2004) who elaborated on the perspective of embeddedness, he was sceptical about granting a special status to network relationships, regarding all economic transactions as embedded in social relationships and covering both collaboration and competition, formal and covert relationships. As a result of such making assumptions, it has been found that all economic transactions, except for superficial and negligent exchanges, consist in and create a certain degree of mutual association and obligation. The concept of embedding in a network describes the structure of the firm’s relationships with other entities, including in particular the degree to which the firm is connected with other entities in a network and the interconnections between the firms. Two types of the firm’s embeddedness in a network can be distinguished:
A dense network of relationships between firms in the first case does not favour building trust, collaboration and getting to know other parties. In the second case, because of structural holes, it is more difficult because firms do not have access to resources which they could access if they built additional relationships with other entities. In such networks firms can collaborate with many other entities which may not be even aware of such interrelationships. As an example you can use the research (Rowley, Baum, Shipilov, Greve, Rao,2004) which analysed the influence of structural and relational features of embeddedness in a network on the performance of member firms. The research showed that the firms’ performance depends on a business context. Based on the research carried out in a semi-conductor business, it has been found that weak relationships between firms, especially in the business where firms are strongly connected with each other, had an adverse effect on the performance of member firms while strong relationships had a positive effect. The analysis of the steel business produced different results, because strong relationships between firms had positive effects on the performance of firms in a network
An approach referring to resource diversity
The approach highlighting the role of resource diversity emphasises that the key attributes in a network that may influence the performance of member firms include similarities and differences between partners, and research shows that diversity of knowledge within a network has a favourable effect on the performance of firms (Kenny, 2009, pp.105-109). Yet, not always diversified networks bring benefits for individual member firms, because it may lead to a drop in profits of an organisation due to the need to maintain a more complex and expensive management structure. The reasons for that are as follows:
Quality approach
In accordance with this approach, the success of a given network depends on its fulfilment of set objectives. Apart from good performance the approach pays attention to failures of networks in the fulfilment of their objectives, except that in some cases the number of failures equals the number of successes. It also happens that some objectives have been fulfilled only partially. B. Gomes-Casseres deals with the issue of network efficiency, pointing to two main methods of measuring their performance (Gomes –Casseres, 2003):
The first method is similar to the measurement of classic international project effectiveness, e.g. meeting the deadline or project requirements, customer satisfaction. The other method regards the measurement of relationship development, i.e. communication quality, the ability of partners to understand each other, etc. In his opinion, it is important to separate these two areas because two parties frequently blame each other for their poor performance which may result from a specific technology or market. Additionally, it is easy to confuse the value of a relationship with a project deliverable even though they are two separate issues. Relationship monitoring involves the intention to avoid friction between partners, because successes and failures are unavoidable both in the area of technology and the market.
3. The network effects
The grounds for creating networks, ones related to efficiency, focus on the expected result of starting privileged interactions with a partner. The network effects were first introduced into economic literature by J. Rohlfs, who described them by analysing the telecommunication service markets (Rohlfs, 1974, pp. 16–37). The network effect should influence the cost level or bring increase in the value generated by the enterprise. The cost reduction pertains to the economies of scale and scope, as well as the pursuit of reducing the transaction costs of an enterprise. The increase in transaction value, on the other hand, relates to the quasi-integration effect or the synergy effect which may occur between the parties to an inter-organisational network. A detailed analysis of network effects helped economists isolate the so-called indirect network effects which are related, among others, to reducing prices, increasing availability and diversity of services – a classic example of this is the computer hardware and software.
In the organisation theory, searching for efficiency of operation is related to synergy. Nowadays, the synergy effect is being sought for not only inside the enterprise, but also in the inter-organisational area. Synergy may come from phenomena such as specialisation, concentration, continuous work, technical progress, economies of scale (scale and scope), integration processes and autonomy, improvement and development processes, adaptation and pro-activeness.
Apart from the network effect, the network itself brings about many other benefits, often related with this issue, the systemisation of which is sometimes quite difficult. For instance, the following benefits related to enterprises operating in a network are stressed:
Business networks consolidate their importance in the global economy. Currently they are one of the most interesting solutions with many advantages, which extend the number of strategic options available for an enterprise, may facilitate easier migration towards profit - to sectors offering better development opportunities. At the moment they are one of the solutions which help face growing competition. They boost the innovativeness of member enterprises as well as the sectors in which the network operates.
4. Efficiency of collaboration within networks
Efficiency is defined as the result of actions taken described by means of a relationship between the effects achieved and efforts made. Efficiency is typically measured by means of the ratio analysis of the resources used, including labour, time, production or capital. In practice, efficiency is most often examined only in economic terms as a comparison of currency unit equivalent of effects of actions taken and the costs of said results fixed in the same units. This approach narrows down the substance of efficiency, thereby preventing the assessment and considering partial results which appear in an organisation and are essential for its development and operation. Efficiency is a complex category and needs analysing on different planes through diverse assessment aspects.
Efficiency in broader terms may be seen from two different perspectives, namely potential and actual efficiency.
In assessing the actual efficiency of collaboration between independent enterprises, the theory of games, theory of transaction costs and the issues of social networks should be referred to. What should be borne in mind is that, apart from measurable indicators, other non-measurable issues, especially in very dynamic networks, are equally important.
Potential efficiency reveals the sources of enhancing the actual efficiency of an organisation. The analysis of potential efficiency extends to the capabilities of an organisation that have not been fully used so far and their potential influence on future efficiency. Thus, the analysis of potential efficiency describes a quality of the organisational system performance and directions for its improvement. In assessing potential efficiency, the following criteria can be considered: stability, adaptability, innovation (Table 2).
The above criteria can be used in the assessment of different organisational structures. They acquire special significance in networks as what determines their occurrence is internal disturbances, changes in the environment and the need for constant innovation.
5. Assumptions of analysing the network structure efficiency
The grounds for researching the business network efficiency cover the theses of the proposed cognitive concept which may be the foundation for the diagnostic and project works. These grounds are presented below.
6. Methodology for assessing the efficiency business networks
Description of research area
The forms of network cooperation may be very diverse, both due to the territorial scope and the scope and type of actions undertaken. Taking into consideration the spatial scope of the network, one can distinguish the local, regional and national ones, as well as networks dispersed on larger areas, e.g. supranational and global.
Many companies operate within international networks which function directly as strategic decision-making centres and serve as tools for coordination and often for the actual control of many companies or even entire industries. Apart from global and international networks, many entities operate within local networks which are established between enterprises operating in the area of a specific local unit or between enterprises and business environment (e.g. clusters). Examples of network solutions with social network properties include industrial districts (regional clusters, Marshallian districts).
Fig. 1. A general diagram of network structure efficiency analysis
Source: own study.
General diagram of research procedure
Figure 1 presents the diagram of network structure efficiency evaluation. This is a proposal of a research procedure related to the identification, diagnosis (evaluation) and change design.
The research procedure cycle may be presented in the following stages:
I. Identification of network structures as subject of the research
II. Network structure efficiency diagnosis
III. Designing changes
The network structure efficiency analysis should also take into consideration the grounds and indications resulting from the network analysis. The network analysis is widely used in many disciplines when analysing various types of phenomena: the development of attitudes, socio-economic mobility, diffusion of innovation and information, communication, communities, companies and organisation structure, interpersonal relations and political behaviours. Sometimes not only the actual networks and relations are analysed, but also how they are perceived by individual actors (network perception). The methods of analysing social networks help research:
In addition, this method of researching organisation is distinguished by the quantitative character which permits the quantification of many phenomena typical of the knowledge.
Source: Author’s own study.
7. An example of assessing the efficiency of business networks
This part of the paper discusses a fragment of empirical research, which is an effect of analyses carried out in 2013. The basic aim of these research was an assessment of efficiency of business networks by providing an aggregate assessment based on given criteria of assessment. Efficiency of business network indicate the following partial objectives:
The research was carried out with a sample of 56 clusters which work in different sectors located in different parts of Poland by using a questionnaire. This questionnaire was addressed to coordinators of 200 clusters and cluster initiatives defined on the basis of database of clusters, which is available on the Polish Innovation Portal – cluster [Polish Innovation Portal – cluster 2014]. Most of surveyed clusters (58%) are of regional scale, national and international scale have 18% of surveyed clusters. Only 3% of them are the clusters of global scale. The structure of surveyed clusters is presented in Figure 2.
The base for conducting the assessment of efficiency of surveyed clusters is a method of categorization, which is a research procedure. Its essence is:
The research procedure of categorisation included the following phases:
Assessment criteria of efficiency1 of surveyed cluster are presented in Table 1. A questionnaire was created on the basis of established criteria.
Table 2. Criteria used in assessing potential efficiency
| Self-benefits (KW) – achieved by the pi enterprise as a result of performing the zi task, within the total number of independent L tasks and the total number of dependent M tasks | |
| Received Benefits (KO) – Achieved by the pi enterprise when the pi enterprise performs the zi task (perspective of the pi enterprise) | |
| Contributed Benefits (KD) – benefits from the pj enterprise to the pi enterprise as a result of the performance of the zi task (perspective of the pj enterprise) | |
| Criterion | Description |
| Stability | Ability to maintain a current position in case of internal disturbances. The stability of networks is usually provided by proper relationship management. Business trust and compliance with the principles of responsible business are particularly important factors here. These two spheres facilitate the adjustment of social relationships in networks, mitigating economic risk and determining comparative stability of organisations operating in temporary and dispersed market structures. From the point of view of network and virtual organisations, economic indicators and indicators regarding relationships with business partners are particularly important, but other values may also provide significant information about anticipated stability of collaboration. |
| Adaptability | Ability to adapt an organisation to changes in the environment. Adaptability depends, most of all, on available resources and the ability to reconfigure the existing resources or to acquire new ones. One of the methods of assessing the efficiency of resource management is the Multi-Attribute Resource Management Model developed by ARC Advisory Group. The model covers such areas of enterprise resource management as: resources and interaction levels on which the enterprise is focused, scope of actions taken as part of resource management, selected approach and technologies employed to enhance efficiency, resources used by the managing team, anticipated collaboration level and integration with the enterprise information systems, results achieved as part of resource management. |
| Invention | Ability to change the operation of an organisation in pursuance of an intentional change of the environment. Actions in this regard are taken mainly as part of knowledge and intellectual capital management processes. In this context four types of development processes supporting the enhancement of efficiency in network environment can be distinguished. |
In second place the weights of assessment criteria were established (Table 4). Weights express the importance, relevance, materiality some factor (these are the measures used in a special way, because they are related to the evaluation criteria, which are the primary basis for evaluation). This step of the procedure is an essential factor in the evaluation of weighted objects, since it can not be done otherwise than by determining the preferences of the individual evaluation criteria. Weights are allocated to the particular assessment criteria based on the three-point scale. 3 points – dominant criteria, 2 points- basic criteria (required), 1 point – useful criteria.
Table 3. Assessment criteria of effectiveness of surveyed cluster
| Self-benefits (KW) – achieved by the pi enterprise as a result of performing the zi task, within the total number of independent L tasks and the total number of dependent M tasks | |
| Received Benefits (KO) – Achieved by the pi enterprise when the pi enterprise performs the zi task (perspective of the pi enterprise) | |
| Contributed Benefits (KD) – benefits from the pj enterprise to the pi enterprise as a result of the performance of the zi task (perspective of the pj enterprise) | |
| Criterion | Description |
| Stability | Ability to maintain a current position in case of internal disturbances. The stability of networks is usually provided by proper relationship management. Business trust and compliance with the principles of responsible business are particularly important factors here. These two spheres facilitate the adjustment of social relationships in networks, mitigating economic risk and determining comparative stability of organisations operating in temporary and dispersed market structures. From the point of view of network and virtual organisations, economic indicators and indicators regarding relationships with business partners are particularly important, but other values may also provide significant information about anticipated stability of collaboration. |
| Adaptability | Ability to adapt an organisation to changes in the environment. Adaptability depends, most of all, on available resources and the ability to reconfigure the existing resources or to acquire new ones. One of the methods of assessing the efficiency of resource management is the Multi-Attribute Resource Management Model developed by ARC Advisory Group. The model covers such areas of enterprise resource management as: resources and interaction levels on which the enterprise is focused, scope of actions taken as part of resource management, selected approach and technologies employed to enhance efficiency, resources used by the managing team, anticipated collaboration level and integration with the enterprise information systems, results achieved as part of resource management. |
| Invention | Ability to change the operation of an organisation in pursuance of an intentional change of the environment. Actions in this regard are taken mainly as part of knowledge and intellectual capital management processes. In this context four types of development processes supporting the enhancement of efficiency in network environment can be distinguished. |
| K1 - Calculation of productivity |
| K2 - Objectives and tasks |
| K3 - Stability (flexibility) |
| K4 - Coordination |
| K5 - Scale |
| K6 - Diversity of resources |
| K7 - Centralisation |
| K8 - Density |
| K9 - Formalization |
| K10 - Sharing of expertise with cooperants |
| K11 - Sharing of knowledge insider the middle of network |
| K12 - Barriers in the sharing of knowledge ” |
| K13 - Using of IT systems |
| K14 - Corporate problem solving |
| K15 - Inner commucation |
| K16 - Investment business |
| K17- Research-and- Development |
| K18 - Involvement in society |
| K19 - Observing the rules of corporate responsibility |
| K20 - Development of worker’s potential |
Then, the verifying assessment was conducted, where the normalized four-points assessment was provided. (Table 5) The verifying assessment is to indicate the extent to which the given subject respects established requirements. (given by the patterns of achievement assessment). Interpenetration of results and their tendency is the key issue in order to give an adequate verifying assessment, especially in the case of multicriteria model, in which individual criteria are of the stimulant, destimulant or nominant nature. The formula of verifying assessment is provided by the relation between actual fact and the master. The verifying assessment, which is defined in such manner, is a good appliance of normalization of assessment criteria., thanks to that the aggregate assessment is possible.
Table 4. Importance of the evaluation criteria
| Self-benefits (KW) – achieved by the pi enterprise as a result of performing the zi task, within the total number of independent L tasks and the total number of dependent M tasks | |
| Received Benefits (KO) – Achieved by the pi enterprise when the pi enterprise performs the zi task (perspective of the pi enterprise) | |
| Contributed Benefits (KD) – benefits from the pj enterprise to the pi enterprise as a result of the performance of the zi task (perspective of the pj enterprise) | |
| Criterion | Description |
| Stability | Ability to maintain a current position in case of internal disturbances. The stability of networks is usually provided by proper relationship management. Business trust and compliance with the principles of responsible business are particularly important factors here. These two spheres facilitate the adjustment of social relationships in networks, mitigating economic risk and determining comparative stability of organisations operating in temporary and dispersed market structures. From the point of view of network and virtual organisations, economic indicators and indicators regarding relationships with business partners are particularly important, but other values may also provide significant information about anticipated stability of collaboration. |
| Adaptability | Ability to adapt an organisation to changes in the environment. Adaptability depends, most of all, on available resources and the ability to reconfigure the existing resources or to acquire new ones. One of the methods of assessing the efficiency of resource management is the Multi-Attribute Resource Management Model developed by ARC Advisory Group. The model covers such areas of enterprise resource management as: resources and interaction levels on which the enterprise is focused, scope of actions taken as part of resource management, selected approach and technologies employed to enhance efficiency, resources used by the managing team, anticipated collaboration level and integration with the enterprise information systems, results achieved as part of resource management. |
| Invention | Ability to change the operation of an organisation in pursuance of an intentional change of the environment. Actions in this regard are taken mainly as part of knowledge and intellectual capital management processes. In this context four types of development processes supporting the enhancement of efficiency in network environment can be distinguished. |
| K1 - Calculation of productivity |
| K2 - Objectives and tasks |
| K3 - Stability (flexibility) |
| K4 - Coordination |
| K5 - Scale |
| K6 - Diversity of resources |
| K7 - Centralisation |
| K8 - Density |
| K9 - Formalization |
| K10 - Sharing of expertise with cooperants |
| K11 - Sharing of knowledge insider the middle of network |
| K12 - Barriers in the sharing of knowledge ” |
| K13 - Using of IT systems |
| K14 - Corporate problem solving |
| K15 - Inner commucation |
| K16 - Investment business |
| K17- Research-and- Development |
| K18 - Involvement in society |
| K19 - Observing the rules of corporate responsibility |
| K20 - Development of worker’s potential |
| Criterion | Weight |
| K1 - Calculation of productivity | 3 |
| K2 - Objectives and tasks | 3 |
| K3 - Stability (flexibility) | 2 |
| K4 - Coordination | 3 |
| K5 - Scale | 1 |
| K6 - Diversity of resources | 2 |
| K7 - Centralisation | 2 |
| K8 - Density | 2 |
| K9 - Formalization | 2 |
| K10 - Sharing of expertise with cooperants | 2 |
| K11 - Sharing of knowledge insider the middle of network | 3 |
| K12 - Barriers in the sharing of knowledge ” | 3 |
| K13 - Using of IT systems | 3 |
| K14 - Corporate problem solving | 2 |
| K15 - Inner commucation | 2 |
| K16 - Investment business | 3 |
| K17- Research-and- Development | 1 |
| K18 - Involvement in society | 2 |
| K19 - Observing the rules of corporate responsibility | 2 |
| K20 - Development of worker’s potential | 2 |
Table 5. Conversion table for the scoring of the examination
| Self-benefits (KW) – achieved by the pi enterprise as a result of performing the zi task, within the total number of independent L tasks and the total number of dependent M tasks | |
| Received Benefits (KO) – Achieved by the pi enterprise when the pi enterprise performs the zi task (perspective of the pi enterprise) | |
| Contributed Benefits (KD) – benefits from the pj enterprise to the pi enterprise as a result of the performance of the zi task (perspective of the pj enterprise) | |
| Criterion | Description |
| Stability | Ability to maintain a current position in case of internal disturbances. The stability of networks is usually provided by proper relationship management. Business trust and compliance with the principles of responsible business are particularly important factors here. These two spheres facilitate the adjustment of social relationships in networks, mitigating economic risk and determining comparative stability of organisations operating in temporary and dispersed market structures. From the point of view of network and virtual organisations, economic indicators and indicators regarding relationships with business partners are particularly important, but other values may also provide significant information about anticipated stability of collaboration. |
| Adaptability | Ability to adapt an organisation to changes in the environment. Adaptability depends, most of all, on available resources and the ability to reconfigure the existing resources or to acquire new ones. One of the methods of assessing the efficiency of resource management is the Multi-Attribute Resource Management Model developed by ARC Advisory Group. The model covers such areas of enterprise resource management as: resources and interaction levels on which the enterprise is focused, scope of actions taken as part of resource management, selected approach and technologies employed to enhance efficiency, resources used by the managing team, anticipated collaboration level and integration with the enterprise information systems, results achieved as part of resource management. |
| Invention | Ability to change the operation of an organisation in pursuance of an intentional change of the environment. Actions in this regard are taken mainly as part of knowledge and intellectual capital management processes. In this context four types of development processes supporting the enhancement of efficiency in network environment can be distinguished. |
| K1 - Calculation of productivity |
| K2 - Objectives and tasks |
| K3 - Stability (flexibility) |
| K4 - Coordination |
| K5 - Scale |
| K6 - Diversity of resources |
| K7 - Centralisation |
| K8 - Density |
| K9 - Formalization |
| K10 - Sharing of expertise with cooperants |
| K11 - Sharing of knowledge insider the middle of network |
| K12 - Barriers in the sharing of knowledge ” |
| K13 - Using of IT systems |
| K14 - Corporate problem solving |
| K15 - Inner commucation |
| K16 - Investment business |
| K17- Research-and- Development |
| K18 - Involvement in society |
| K19 - Observing the rules of corporate responsibility |
| K20 - Development of worker’s potential |
| Criterion | Weight |
| K1 - Calculation of productivity | 3 |
| K2 - Objectives and tasks | 3 |
| K3 - Stability (flexibility) | 2 |
| K4 - Coordination | 3 |
| K5 - Scale | 1 |
| K6 - Diversity of resources | 2 |
| K7 - Centralisation | 2 |
| K8 - Density | 2 |
| K9 - Formalization | 2 |
| K10 - Sharing of expertise with cooperants | 2 |
| K11 - Sharing of knowledge insider the middle of network | 3 |
| K12 - Barriers in the sharing of knowledge ” | 3 |
| K13 - Using of IT systems | 3 |
| K14 - Corporate problem solving | 2 |
| K15 - Inner commucation | 2 |
| K16 - Investment business | 3 |
| K17- Research-and- Development | 1 |
| K18 - Involvement in society | 2 |
| K19 - Observing the rules of corporate responsibility | 2 |
| K20 - Development of worker’s potential | 2 |
| Assessment criteria | Scoring | ||||
| Insufficient condition 0 | Admissible condition 1 | Average condition 2 | Good condition 3 | Distinguishing condition 4 | |
| K1 | 0 | 0-1 | 1 | <1 | <1 |
| K2 | 0 | 1 | 2 | 3 | 4 |
| K3 | 0 | 1 | 2 | 3 | 4 |
| K4 | 0 | 2-3 | 2-3 | 2-3 | 1,4 |
| K5 | 0 | 2-3 | 2-3 | 2-3 | 1,4 |
| K6 | 0 | 2-3 | 2-3 | 2-3 | 1,4 |
| K7 | 0 | 0-1 | 0-1 | 0-1 | 1 |
| K8 | 0 | 0-1 | 0-1 | 0-1 | 0,203 |
| K9 | 0 | 1 | 2 | 3 | 4 |
| K10 | 0 | 1 | 2 | 3 | 4 |
| K11 | 0 | 1 | 2 | 3 | 4 |
| K12 | 9-7 | 6-4 | 4-2 | 1 | 0 |
| K13 | 0 | 1-2 | 3-4 | 5-6 | 7-8 |
| K14 | 0 | 1 | 2 | 3 | 4 |
| K15 | 0 | 1 | 2 | 3 | 4 |
| K16 | 0 | 1 | 2 | 3 | 4 |
| K17 | 0 | 1 | 2 | 3 | 4 |
| K18 | 0 | 1 | 2 | 3 | |
| K19 | 0 | 1-2 | 3-4 | 4-5 | 6 |
| K20 | 0 | 1-2 | 3-5 | 5-6 | 7 |
Table 6. Hierarchical index ranges IE
| Self-benefits (KW) – achieved by the pi enterprise as a result of performing the zi task, within the total number of independent L tasks and the total number of dependent M tasks | |
| Received Benefits (KO) – Achieved by the pi enterprise when the pi enterprise performs the zi task (perspective of the pi enterprise) | |
| Contributed Benefits (KD) – benefits from the pj enterprise to the pi enterprise as a result of the performance of the zi task (perspective of the pj enterprise) | |
| Criterion | Description |
| Stability | Ability to maintain a current position in case of internal disturbances. The stability of networks is usually provided by proper relationship management. Business trust and compliance with the principles of responsible business are particularly important factors here. These two spheres facilitate the adjustment of social relationships in networks, mitigating economic risk and determining comparative stability of organisations operating in temporary and dispersed market structures. From the point of view of network and virtual organisations, economic indicators and indicators regarding relationships with business partners are particularly important, but other values may also provide significant information about anticipated stability of collaboration. |
| Adaptability | Ability to adapt an organisation to changes in the environment. Adaptability depends, most of all, on available resources and the ability to reconfigure the existing resources or to acquire new ones. One of the methods of assessing the efficiency of resource management is the Multi-Attribute Resource Management Model developed by ARC Advisory Group. The model covers such areas of enterprise resource management as: resources and interaction levels on which the enterprise is focused, scope of actions taken as part of resource management, selected approach and technologies employed to enhance efficiency, resources used by the managing team, anticipated collaboration level and integration with the enterprise information systems, results achieved as part of resource management. |
| Invention | Ability to change the operation of an organisation in pursuance of an intentional change of the environment. Actions in this regard are taken mainly as part of knowledge and intellectual capital management processes. In this context four types of development processes supporting the enhancement of efficiency in network environment can be distinguished. |
| K1 - Calculation of productivity |
| K2 - Objectives and tasks |
| K3 - Stability (flexibility) |
| K4 - Coordination |
| K5 - Scale |
| K6 - Diversity of resources |
| K7 - Centralisation |
| K8 - Density |
| K9 - Formalization |
| K10 - Sharing of expertise with cooperants |
| K11 - Sharing of knowledge insider the middle of network |
| K12 - Barriers in the sharing of knowledge ” |
| K13 - Using of IT systems |
| K14 - Corporate problem solving |
| K15 - Inner commucation |
| K16 - Investment business |
| K17- Research-and- Development |
| K18 - Involvement in society |
| K19 - Observing the rules of corporate responsibility |
| K20 - Development of worker’s potential |
| Criterion | Weight |
| K1 - Calculation of productivity | 3 |
| K2 - Objectives and tasks | 3 |
| K3 - Stability (flexibility) | 2 |
| K4 - Coordination | 3 |
| K5 - Scale | 1 |
| K6 - Diversity of resources | 2 |
| K7 - Centralisation | 2 |
| K8 - Density | 2 |
| K9 - Formalization | 2 |
| K10 - Sharing of expertise with cooperants | 2 |
| K11 - Sharing of knowledge insider the middle of network | 3 |
| K12 - Barriers in the sharing of knowledge ” | 3 |
| K13 - Using of IT systems | 3 |
| K14 - Corporate problem solving | 2 |
| K15 - Inner commucation | 2 |
| K16 - Investment business | 3 |
| K17- Research-and- Development | 1 |
| K18 - Involvement in society | 2 |
| K19 - Observing the rules of corporate responsibility | 2 |
| K20 - Development of worker’s potential | 2 |
| Assessment criteria | Scoring | ||||
| Insufficient condition 0 | Admissible condition 1 | Average condition 2 | Good condition 3 | Distinguishing condition 4 | |
| K1 | 0 | 0-1 | 1 | <1 | <1 |
| K2 | 0 | 1 | 2 | 3 | 4 |
| K3 | 0 | 1 | 2 | 3 | 4 |
| K4 | 0 | 2-3 | 2-3 | 2-3 | 1,4 |
| K5 | 0 | 2-3 | 2-3 | 2-3 | 1,4 |
| K6 | 0 | 2-3 | 2-3 | 2-3 | 1,4 |
| K7 | 0 | 0-1 | 0-1 | 0-1 | 1 |
| K8 | 0 | 0-1 | 0-1 | 0-1 | 0,203 |
| K9 | 0 | 1 | 2 | 3 | 4 |
| K10 | 0 | 1 | 2 | 3 | 4 |
| K11 | 0 | 1 | 2 | 3 | 4 |
| K12 | 9-7 | 6-4 | 4-2 | 1 | 0 |
| K13 | 0 | 1-2 | 3-4 | 5-6 | 7-8 |
| K14 | 0 | 1 | 2 | 3 | 4 |
| K15 | 0 | 1 | 2 | 3 | 4 |
| K16 | 0 | 1 | 2 | 3 | 4 |
| K17 | 0 | 1 | 2 | 3 | 4 |
| K18 | 0 | 1 | 2 | 3 | |
| K19 | 0 | 1-2 | 3-4 | 4-5 | 6 |
| K20 | 0 | 1-2 | 3-5 | 5-6 | 7 |
| Category | Scoring |
| E – network service of a high effectiveness index index value: IWI above 80% maximal value | 168-128 |
| EA - network service of a satisfactory effectiveness of index index value IWI 61% - 80% of maximal value | 127 - 87 |
| EB - network service of a average effectiveness of index index value IWI 40% - 60% maximal value | 86 - 46 |
| EC - network service of a low effectiveness of index index value IWI from 40% maximal value | 0 - 45 |
Table 7. Amount of distinguished clusters
| Self-benefits (KW) – achieved by the pi enterprise as a result of performing the zi task, within the total number of independent L tasks and the total number of dependent M tasks | |
| Received Benefits (KO) – Achieved by the pi enterprise when the pi enterprise performs the zi task (perspective of the pi enterprise) | |
| Contributed Benefits (KD) – benefits from the pj enterprise to the pi enterprise as a result of the performance of the zi task (perspective of the pj enterprise) | |
| Criterion | Description |
| Stability | Ability to maintain a current position in case of internal disturbances. The stability of networks is usually provided by proper relationship management. Business trust and compliance with the principles of responsible business are particularly important factors here. These two spheres facilitate the adjustment of social relationships in networks, mitigating economic risk and determining comparative stability of organisations operating in temporary and dispersed market structures. From the point of view of network and virtual organisations, economic indicators and indicators regarding relationships with business partners are particularly important, but other values may also provide significant information about anticipated stability of collaboration. |
| Adaptability | Ability to adapt an organisation to changes in the environment. Adaptability depends, most of all, on available resources and the ability to reconfigure the existing resources or to acquire new ones. One of the methods of assessing the efficiency of resource management is the Multi-Attribute Resource Management Model developed by ARC Advisory Group. The model covers such areas of enterprise resource management as: resources and interaction levels on which the enterprise is focused, scope of actions taken as part of resource management, selected approach and technologies employed to enhance efficiency, resources used by the managing team, anticipated collaboration level and integration with the enterprise information systems, results achieved as part of resource management. |
| Invention | Ability to change the operation of an organisation in pursuance of an intentional change of the environment. Actions in this regard are taken mainly as part of knowledge and intellectual capital management processes. In this context four types of development processes supporting the enhancement of efficiency in network environment can be distinguished. |
| K1 - Calculation of productivity |
| K2 - Objectives and tasks |
| K3 - Stability (flexibility) |
| K4 - Coordination |
| K5 - Scale |
| K6 - Diversity of resources |
| K7 - Centralisation |
| K8 - Density |
| K9 - Formalization |
| K10 - Sharing of expertise with cooperants |
| K11 - Sharing of knowledge insider the middle of network |
| K12 - Barriers in the sharing of knowledge ” |
| K13 - Using of IT systems |
| K14 - Corporate problem solving |
| K15 - Inner commucation |
| K16 - Investment business |
| K17- Research-and- Development |
| K18 - Involvement in society |
| K19 - Observing the rules of corporate responsibility |
| K20 - Development of worker’s potential |
| Criterion | Weight |
| K1 - Calculation of productivity | 3 |
| K2 - Objectives and tasks | 3 |
| K3 - Stability (flexibility) | 2 |
| K4 - Coordination | 3 |
| K5 - Scale | 1 |
| K6 - Diversity of resources | 2 |
| K7 - Centralisation | 2 |
| K8 - Density | 2 |
| K9 - Formalization | 2 |
| K10 - Sharing of expertise with cooperants | 2 |
| K11 - Sharing of knowledge insider the middle of network | 3 |
| K12 - Barriers in the sharing of knowledge ” | 3 |
| K13 - Using of IT systems | 3 |
| K14 - Corporate problem solving | 2 |
| K15 - Inner commucation | 2 |
| K16 - Investment business | 3 |
| K17- Research-and- Development | 1 |
| K18 - Involvement in society | 2 |
| K19 - Observing the rules of corporate responsibility | 2 |
| K20 - Development of worker’s potential | 2 |
| Assessment criteria | Scoring | ||||
| Insufficient condition 0 | Admissible condition 1 | Average condition 2 | Good condition 3 | Distinguishing condition 4 | |
| K1 | 0 | 0-1 | 1 | <1 | <1 |
| K2 | 0 | 1 | 2 | 3 | 4 |
| K3 | 0 | 1 | 2 | 3 | 4 |
| K4 | 0 | 2-3 | 2-3 | 2-3 | 1,4 |
| K5 | 0 | 2-3 | 2-3 | 2-3 | 1,4 |
| K6 | 0 | 2-3 | 2-3 | 2-3 | 1,4 |
| K7 | 0 | 0-1 | 0-1 | 0-1 | 1 |
| K8 | 0 | 0-1 | 0-1 | 0-1 | 0,203 |
| K9 | 0 | 1 | 2 | 3 | 4 |
| K10 | 0 | 1 | 2 | 3 | 4 |
| K11 | 0 | 1 | 2 | 3 | 4 |
| K12 | 9-7 | 6-4 | 4-2 | 1 | 0 |
| K13 | 0 | 1-2 | 3-4 | 5-6 | 7-8 |
| K14 | 0 | 1 | 2 | 3 | 4 |
| K15 | 0 | 1 | 2 | 3 | 4 |
| K16 | 0 | 1 | 2 | 3 | 4 |
| K17 | 0 | 1 | 2 | 3 | 4 |
| K18 | 0 | 1 | 2 | 3 | |
| K19 | 0 | 1-2 | 3-4 | 4-5 | 6 |
| K20 | 0 | 1-2 | 3-5 | 5-6 | 7 |
| Category | Scoring |
| E – network service of a high effectiveness index index value: IWI above 80% maximal value | 168-128 |
| EA - network service of a satisfactory effectiveness of index index value IWI 61% - 80% of maximal value | 127 - 87 |
| EB - network service of a average effectiveness of index index value IWI 40% - 60% maximal value | 86 - 46 |
| EC - network service of a low effectiveness of index index value IWI from 40% maximal value | 0 - 45 |
| Category | Index value | Amount of clusters |
| E | 168-128 | 3 |
| EA | 127-87 | 17 |
| EB | 86-46 | 27 |
| EC | 0-45 | 9 |
A value of effectiveness index IE was determined for each surveyed network service according to the table,
(1)
where :
wj – weight of the j assessment criterion,
qij– point verifying assessment,
I = 1, …, m – network service,
J= 1, …, n – assessment criteria.
The maximum weight value of effectiveness index amounts to 168. This amount would be reached by an company if it became a 4 grade for each of assessment criteria. In surveyed population of 56 network services the biggest phatic index value.
After calculating of the index , the clusters were qualified to the given categories. (table 7)
Among the surveyed clusters, three of them got E category. This is the cluster of a high index value. In this group can be found the IT companies . The biggest amount of clusters are found in EA(17) and EB(27) categories.
The studies are an example of the use of multi-criteria approach in assessing the efficiency of business networks. This approach reflects the complexity of economic relationships formed in them. In the presented study the business network efficiency evaluation is based on efficiency measures/criteria relating to the achievement of goals in the organisation as a whole, within a coherent efficiency system.
It should be stated that the efficiency assessment of network organisations needs a multi-level approach which reflects the complexity of economic relationships formed in them. The considerations discussed can lead to the following conclusions:
Acknowledgements
The article was developed in the framework of the project entitled: Model assessment of efficiency of business networks. The project was funded by the National Science Centre allocated on the basis of the decision number DEC-2013/11/B/HS4/01030
1 The issue of criteria for assessing the efficiency of business networks widely article describes: Barczak B., Kryteria oceny efektywności struktur sieciowych, (in English: Evaluation Criteria of Network Structure Efficiency), in Ekonomika i Organizacja Przedsiębiorstwa, Orgmasz, Kraków, nr 2 (75, pp: 28-38, ISSN: 0860-6846, 2013.
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