Reframing business relationships : the impact of M&As.

Mason, Katy J. (2007) Reframing business relationships : the impact of M&As. IMP Journal Seminar, Trondh. (Unpublished)

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Abstract

Critical incidents, such as horizontal mergers and acquisitions (M&A), force companies to re-think their business models and ‘reframe’ the way they develop and manage their business relationships. Through M&A companies enter into a set of new business relationships with other firms; thus companies re-conceptualise or ‘reframe’ each relationship to create shared understandings of how the relationship might work in practice. Previous research has shown that the way actors frame problems affects the decisions they make. Similarly, the way firms conceptualise their business relationships, affects their decisions regarding the design of their business model. It can be argued that the way companies reframe business relationships is, primarily manifestation of new business models and this affects both the decisions and actions that companies take regarding their business relationships. The challenge faced by companies attempting the reframing of business relationships is vividly illustrated by the impact of horizontal M&A. This paper explores how companies attempt to reframe business relationships following M&A activities and examines the implications of reframing for the organisation and the business network through, a case single buyer-seller relationship in the engineering sector. The central messages of this research are; first, that in order for companies to adapt and evolve business models, reframing at the ‘strategic’ or ‘proprietary’ level must filter through and drive reframing at the both the foundation level and the rules level of business model development. Second, the ability of firms to transfer or drive reframing at all levels of the business model is dependent on ‘events’ or ‘critical incidents’ such as M&As.