The role of owners in industrial networks – the case of a steel producer

Abstract

Purpose – In this paper, the authors will argue that owners as one type among many other types of actors is essential to bring into the picture when analyzing developments in industrial and other kinds of business networks. The direct relationship between owners and the business unit, the firm, is one type of relationship. But owners, as well as the firm as such, also possess several indirect relationships that could be highly relevant in many business network situations. The purpose of this paper is to investigate both direct and indirect relationships when analyzing the role of owners. Design/methodology/approach – The empirical base is coming from an earlier Swedish investigation of the development of a steel company in the course of 75 years. In this study the authors mapped ownership and the role owners had in financial and other terms. The authors also made a detailed investigation of the development of the company in terms of important customers and suppliers, i.e. its business network. In total it means that the empirical data give us a quite multidimensional picture of the role and importance of ownership over a substantial time period. Findings – The owners were for this company not at all important as financers. The monetary flow went, during the whole period, from the company to the owners. The owners, however, played a far more important role in an indirect way, affecting the way the company designed single business relationships as well as the combined network of those relationships. The owners were more important as network designers than as financial contributors. The analysis focusses on two topics: the ways in which owners contributed to the development of the firm during several phases of its development and similarities and differences between the various types of ownership (an entrepreneur – owner, a customer firm, a bank, a family industrial sphere). Originality/value – The results indicate that the existence and importance of indirect relationships is of vital importance when analyzing the importance of owners in business networks. These indirect relationships are usually not analyzed in contemporary research about ownership. This an interesting and important topic and the authors hope that this study will be followed by many more. The addressed topic is especially relevant for the policy implications.