Modern market economies are dynamic. Organizations are constantly changing and developing from internal as well as external forces. In business we make strategic decisions, technological improvements, modifications in production capacity, mergers and acquisitions. Consequently, organizational change is an important research area.
However, the effects of these changes on other companies in the same organizational network are less readily recognized. According to business-to-business marketing research, actors are not isolated, but connected through technologies, knowledge, social relationships, administrative routines and other interdependencies. Every firm is directly and indirectly connected in relationships with others in such a way that it can be affected by changes within other organizations.
Some of the most important changes to organizations are bankruptcies, mergers and acquisitions, which are studied within multiple disciplines and from varying perspectives. For many years, researchers have been investigating different aspects of bankruptcies: reasons for bankruptcies, bankruptcy related costs, reconstruction of firms, efficiency of the bankruptcy process, economic historical perspectives and managerial issues (for an overview see Gratzer and Sjögren, 1999; Bruhner, 2004). Mergers and acquisitions on the other hand have been studied from the perspective of the merging companies; their organizational fit, company cultures, mergers and acquisitions as strategic change, the merger or acquisition process and arising synergies between companies (for an overview see Anderson et al., 2003).
The aim with this text is to explore change one step beyond the company in question, placing bankruptcies, mergers and acquisitions in a wider context of business relationships and interconnected firms. In the first section of the text I will introduce relevant theories and definitions in the network perspective and explain business relationships, how relationships are connected in networks and how changes in one part of the network may spread and affect other parts. In the second section, I will give an illustrative example that describes the development of one company’s network context during the years of the Swedish dotcom crash. I think the dotcom crash is a good empirical setting since the concentration of events such as bankruptcies, mergers and acquisitions is so high during this period.