In the case of the ARA model for example it has to be made clear when analyzing data who are the actors, what are their activities and with which resources they interact. In other words, there has to be a bridge between the theoretical and the empirical.
This thesis concurs with the need to examine the intangible aspects of the ARA model that can contribute to a novel application of this model. The application of the ARA model for this thesis will be elaborated in the following section.
human activity that is sufficiently complete in itself to permit inferences and predictions to be made about the person performing the act.”
Halinen et al. (2012) observed that this approach has often been used in research examining relationship and network studies. This is due to the nature of network processes, which are “often discontinuous in character can be detected through discernible events, which potentially trigger network formation or dissolution, or otherwise mark important transition periods in the evolution of networks.” For example, in Fuglsang and Eide (2012) study of small tourism firms that innovated by turning the idea of experience tourism into reality using networks, the critical events approach was used to identify the behavioral aspects of network formation in micro-processes. They adopted a practice-based approach to highlight how network formation and innovation can be understood as process and practice. Schurr et al. (2008) examined interaction episodes that lead to relationship changes that can result in adaptation or changes in a business environment. Events, which can also be known as episodes (Håkansson et al., 2009) or moments (Medlin, 2002), are analyzed and used as building blocks that make up the interactive process in networks in this approach. Schurr et al. (2008) examined these changes in terms of actor bonds, resource ties, and activity links by employing CIT to
“investigate interaction patterns that sustain a relationship.”
This thesis proposes that the interactions between the actors, activities, and resources should also be taken into consideration when evaluating the ability of microenterprises to handle critical events in the innovation process. These above-mentioned studies are just some examples in which critical events can be identified from empirical data, such as through narratives as used in the case of Corradi (2013). These empirical data can be qualitatively analyzed to provide an understanding of the studied phenomenon. In the same vein, critical events are used to identify the focal network of actors, resources, and activities to analyze how microenterprises innovate. The critical events identified in this study are taken from descriptions of episodes where the key actors undertake actions, or decisions from a subjective point of view that has an effect on the actors’ bonds, resource ties and activity links associated with the innovation process of the microenterprises. These accounts, which the key actors viewed as being significant to the innovation process, are seen to have contributed to the critical event encountered by the microenterprises in different ways.
The ARA model has had great influence on how business relationships and the field of network research are viewed (Omta et al., 2001). This model has a process perspective when viewing the interactions around networks and in how these interactions emerge (Bizzi and Langley, 2012). Håkansson and Snehota
(1995) stated that one of the reasons they formulated the ARA model was because they were dissatisfied “with how business relationships were looked upon in general, where the relationships were mainly seen as a consequence of what the two parties wanted to get out of the relationship. In other words, that they were the results of specific goals driving the actors to develop the relationship.” The ARA model suggests that interaction outcomes can be described in the three substance layers: actor bonds, resources ties, and activities links. The actor layer touches on the interpersonal links that occur between actors through interactions. Bonds are established based on how actors influence each other within the relationships. The bonds established may open up or restrict opportunities for developing activity links and resource ties. This can aid in the adaptation of external resources and further strengthen or weaken the actor bonds and resource ties, depending on how the relationship plays out in the innovation process. What this ARA lens provides is a view on the key networking features that impact these layers during the innovation process. These have some parallels in how capabilities are formed, developed, or enhanced during the innovation process and can be seen as a supplement to address critics of the “intangible” elements of the ARA that were not on the forefront of discussion in previous literature.
By recognizing that each microenterprise has its own unique set of connected relations with other actors, level of activity, and ability to secure or source for the necessary resources, this thesis acknowledges the complexity of the innovation process as these microenterprises integrate external resources and build on capabilities through the interaction of these ARA layers as part of their innovation process. The analysis framework is thus adapted using elements from the ARA model to help identify the interactive aspect of the innovation process of microenterprises and explain how the innovation process is interrupted after encountering critical events, and how actor bonds, resource ties, and activities links are utilized at the intersection of critical events during the innovation process. This thesis suggests that microenterprises ”take advantage” of the opportunities provided by these critical events to introduce or enhance their dynamic capabilities. These dynamic capabilities are described as adaptive, absorptive, and innovative capacity in the microenterprises’
innovation process that may be enhanced through integrating external resources, or developed through interaction with these external resources. The development or enhancement of these capacities are aimed to address the barriers to innovation and may be a conscious or unconscious strategy.
The analysis framework is a broad preliminary framework based on theory that this empirical study can help to corroborate the elements presented. It is
expected that through the preliminary application of this framework, this tool can be adjusted based on the discussion of the analysis of the case in the concluding chapter.
3 Methodology
No man is an island entire of itself; every man is a piece of the continent, a part of the main; if a clod be washed away by the sea, Europe is the less, as well as if a promontory were, as well as any manner of thy friends or of thine own were;
any man's death diminishes me, because I am involved in mankind. And therefore never send to know for whom the bell tolls; it tolls for thee.
From “No Man is an Island,” Mediation XVII, Devotions upon Emergent Occasions
By John Donne, 1624
Håkansson and Snehota's (1989) article titled “No Business is an Island: The Network Concept of Business Strategy” drew parallels between the above-mentioned quote and how businesses and their environments interact through the network model. This chapter describes the research design for this thesis, the research instruments employed during the data collection process, and delimitations of the sample. This thesis employs a qualitative methodology structured around a case study approach. The choice to use case studies was motivated by it being “an empirical inquiry that investigates a contemporary phenomenon in its real-life context when the boundaries between phenomenon and context are not clearly evident and in which multiple sources of evidence are used” (Yin, 2009). Eisenhardt (1989) emphasized the potential of case studies to capture the dynamics of the studied phenomenon: “The case study is a research strategy which focuses on understanding the dynamics present within single settings.” Case studies provide depth and comprehensiveness for understanding a particular phenomenon. However, these objective may be met only if the study fulfills validity and reliability criteria, according to Gibbert et al. (2008). Gibbert et al. (2008) identified four aspects that can be assessed to ensure “the rigor of field research”: internal validity, construct validity, external validity, and reliability. This chapter clarifies the study along these guidelines to provide an overview of the methodologies engaged for this thesis.