Alessandro Comai (2005) Discover Hidden Needs brf frontiers - proceeding paper

FRONTIERS OF E-BUSINESS RESEARCH 2004

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Discover Hidden Corporate Intelligence Needs by Looking at Environmental and Organizational Contingencies

Alessandro Comai Ph.D. Candidate, ESADE – University Ramon Llull, [email protected]

Abstract The purpose of this paper is to put forward a research framework capable of detecting the hidden needs of a firm in terms of type of formal competitive intelligence program (CIP). The model will focus on the internal and external determinants which compel an organization to establish a formalized intelligence process. This study is concerned with measuring the competitive intelligence sensitivity of a particular organization in a particular context. The first part introduces two different approaches to the examination of the corporate and decision maker’s needs which are generally used in the competitive intelligence field. Subsequently, it discusses the decision maker’s role and the potential failure to determine the CI needs as well as the potential value of the CI program. The second part focuses on research questions. The third part discusses which types of external and internal factors prompt a firm to establish a formal CIP. The paper concentrates on putting forward the factors which are assumed to have the most significant analytical influence and through which it is possible to pinpoint which organizations need to establish a CIP as well as the type of process required.

Keywords competitive intelligence, intelligence needs, environmental scanning, managerial blind spots, contingency factors.

Introduction

It is generally agreed that firms require selected information, called intelligence, for the strategic decision-making process and there are several differences in the way in which different companies use their information. Firms differ in the system they use for acquiring appropriate intelligence and in the degree of resources they devote to it. An increase in external uncertainties may be related to complexity and in order to cope with environmental changes, firms have strategic planning tools and information to help them formulate adequate policies. However, how do they know whether a firm is sufficiently equipped to sustain environmental information intensity without experiencing a competitive crisis? The objective of the paper is to identify a set of external and internal contingency factors which allow decision makers to know when they need a CI program and what type of focuses should be incorporated into it.

Understanding intelligence needs

Decision maker’s needs have long been studied in the information science and intelligence field (see for example Nicholas, 2000; Herring, 1996). Intelligence needs differ from


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intelligence wants and requirements. Aguilar (1967, p.7) suggested that the optimal level of information is the intersection of four specific, strategic information spaces: received information, wanted information, needed information and all information available from outside. Intelligence needs may be studied in an anticipatory way, which means that the intention is to detect them at an early stage. This method allows new information need to be detected and prevents information gaps. A cursory review of literature suggests that there are two general approaches used to study corporate and decision maker’s needs. They are:

Extrapolation The decision maker’s intelligence needs are established by asking direct questions or eliciting them during interviews. For instance, the “key intelligence topics” (KITs) protocol, suggested by Herring (1999), where decision makers are asked to specify the kind of strategic decision they will need to take within six months, the type of surprise they hope to anticipate or the key players or factor they wish to follow, is applied in order to understand the nature of the information required. In addition to KITs, Herring observed that intelligence requirements can be identified either in a proactive or responsive mode. Moreover, some decision maker’s needs can also be detected from an anthropologist’s perspective, by observing managers and reviewing the documents they use (Fahey, 1999, p.494), for instance. This indirect technique can be applied to study either senior or middle management intelligence needs during the year. Typically, the extrapolation approach employs primary sources.

Endorsement Refers to a method which detects corporate and individual needs by studying corporate and business strategy, objectives and purposes. For example, “key success factors” (KSF) studied by Daniel (1961), Rockfort & Bullen (1981), Leidecker & Bruno (1984) establish which key management activities require the attention of the company information system (Tyson 1998; Hussey and Jenster, 1999 p.79). KSF can be tailored to the decision-maker position and can be defined by looking at managerial goals and priorities or applied to all firms in the same sector representing the prerequisite factors for those firms wishing to start a venture in that specific context. On the other hand, KSF can be applied at business or product level. Nevanlinna (1997, p.88-89) discussed the fact that the best method for understanding decision maker’s needs may be to study the firm’s core business. Prescott (2001, p.9) considers that CI needs can be determined using market events. Hill (1993, p.59) introduced the concept of the “order-winners” and “qualifiers” whereby the marketing and production manager should monitor the goods- or service-related factors which win contracts and qualify the company as potential supplier to a client. Both approaches may detect the implicit needs of decision makers. Even if managers agree on the value of good information, which allows them to take better decisions and so accomplish strategic or tactical objectives, they do not have sufficient knowledge to recognize their needs. However, both approaches may fail to detect corporate CI needs at an early stage. McGonagle and Vella (2002, p.61) consider that “one of the major problems facing CI professionals is that they often do not have a clear understanding of what their internal clients really need in terms of delivered competitive intelligence”. The difficulty of evaluating managerial needs and the central role they play in this process allows the discussion to introduce the concept of the organization’s cognitive dissonance which is procured through manager assumption and cognitive limitation.


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Understanding decision maker blind spots

A cursory review of the literature on competitive intelligence and organizational behaviour, shows that managers are not always aware of or do not pay sufficient attention to the external business environment. Organizations often suffer from information cognitive limitation, myopia or competitive blindness (Levitt, 1960; Zajac and Bazerman, 1991; Zahra and Chaples, 1993, Gilad, Gordon and Sudit; 1993; Gilad, 1994; Wright et al. 2002; Fleisher & Bensoussan 2003). Watkins and Bazerman (2003), for instance, discussed the human “psychological vulnerabilities” as a cause of poor management decision and the study by Wright et al.(2002) described the “immune attitude” towards CI from the external perspective of several UK firms. Corporate illness can occur for several reasons. Andrew (1971 p.60) considers that “the corporate strategist is usually at least intuitively aware of the features of the current environment about him”. Managerial blind spots or corporate myopia can have different forms. Gilad (1994, p.19) identified three main causes of business blind spots: unchanged assumptions, corporate myths and corporate taboos, which refer to the idea that decision makers have wrong ideas regarding the external environment and even regarding the company itself. Porter (1980, p.58-59) described two main assumptions which competitors can make: about the firm itself and about the industry and other firms. For instance, in a Swedish electrical company “there was very little that inspired the members of the organization to monitor the environment in a wider perspective. The coming deregulation of the energy market was not a “reality” for most of them, even though they all could read about it in the newspapers” (Hamrefors, 1998b). Management blind spots not only refer to the limited detection of intelligence needs but also to the failure to understand the benefit of CI (Wright et al.2002).

Understanding the paradox

As has been discussed previously, the decision maker is one main component which interacts with the understanding of corporate needs. However, there are other elements which may influence organizational needs. Figure 1 shows the possible factors and activities which interact within the firm and which characterize the type and nature of the business information flow. For instance, Choo (2002, p.104) defined three key elements which affect the scanning behaviour of the decision maker: “situation dimensions”, which refers to the perception of managers, “managerial traits”, which refers to the position of the manager in the organization and “organization strategy” which refers to the organization itself. This paragraph discusses those factors which can help to reveal why decision makers can misperceive the value and the need for a CI program. Three key issues will be described as follows:

Issue 1 – CI and decision makers

One of the first issues to arise is which elements have the most important role in the information scanning process. The decision maker is the central element, playing the main role in the information process and is also responsible for the evaluation of the CI program. It is alleged that the relationships between the decision makers, the organization and the external environment affect the information acquisition process. The idea here is that managers filter,


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process, and categorize the information coming from the environment. Figure 1 shows how managers play a central role by demanding intelligence and perceiving the benefits of intelligence. As has been observed previously, intelligence needs are significantly influenced by personal judgments or beliefs.

Issue 2 – CI and performance The second issue relates to the benefits of the CI function. Scientific literature states that there is a positive relationship between CI and the performance of an organization (Miller and Friesen, 1977; Newgren, et.al. 1984; Dollinger, 1984; West, 1988; Daft, et al., 1988; Olsen, Murthy and Teare, 1994; Cappel and Boone, 1995; Elenkov, 1997; Ahituv, et al, 1998; Prescott, 2001, p.1; Wright et al., 2002; Suddaby; 2004 and Hughes, 2004).

Figure 1. The circular interaction of the decision maker’s needs, perceptions and blind spots.

Issue 3 – CI and the adoption rate in the firms The third issue deals with the fact that empirical investigations have shown that a small number of companies have formalized CI (Ganesh, Miree and Prescott 2003, Tena and Comai, 2004). The study by Tena and Comai (2004a), for instance, found that 50% of 164 Catalan multinationals have no formalized system. A similar result was found by Preble, Rau, and Reichel (1988) who assessed that only 51 percent of multinational corporations had any formal process where executives regularly monitored publications. Anecdotic observation confirms these findings for North American and European companies (Fuld&Company, 2003). Other studies show that companies are increasing their activities in the information acquisition process or business intelligence activity (Hannula and Pirttimäki, 2002). Considering the positive relationship between CI and performance there is no reason why an organisation should not apply CI.

2. Organization Performance

Studies show that a small number of

companies formally adopts CI

1. Decision Makers (DMs)

4. Firms with NO formal CI program

3. Firms with a formal CI program

Studies show that CI is related to performance

DMs decide when to adopt a formal CI program

Performance helps DMs understand the

importance of the CIP

Needs, perceptions and Blind spots


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Research questions

While there is a significant amount of literature on information needs (see Ashill and Jobber, 2001), few studies have been devoted to the company itself, using a complete external perspective to ascertain whether or not the firm needs a CI program (see Ryamond, Julien and Ramangalby, 2001). In other words, the paper deals with the “why” part of implementing a formalized environmental scanning process rather than focusing on the “what” and “how”, normally dealt with by specialised literature (Prescott, 2001, p.2-3). This section focuses on two central questions and relative objectives concerning what contingency factors are relevant in the understanding of the tacit need for a CIP.

Question 1: Should companies employ a formalized CI program? A review of literature shows that different perspectives are involved in the definition of a formalized CI program. Thomas (1980), for instance, defined the scanning practice characteristics as: 1) continuous over time, 2) applied in the annual planning cycle, and 3) used by the whole organization. Key words stemming from research carried out to date are: coordinated (Mark, 1997; APQC, 2000), ongoing or systematic process (APQC, 2000; Hannula and Pirttimäki, 2002) centralized (Cleland & King 1975) with a defined process in place (Prescott and Gibbons, 1993; Hirshorn, 2004), have an analytical capability (Mark, 1997) integrated to strategic planning process (Tena and Comai, 2003), the environment should be continuously scanned (Andrew, 1971, p.77), at least a full time equivalent specialist dedicated to do the activity (Tena and Comai, 2004b) any level should receive and benefit from intelligence (Andrew, 1971, p.193) level of resources dedicated (Tena and Comai, 2001). Independently from the definition, a level or degree of this formalization can be perceived as a way of establishing the CI effort, which relates to two research objectives.

Objective 1: Define which external environmental factors are positively related to the need for a formal CI program.

The paper assumes that the external environment is one of the contingency factors which allows an understanding of the corporate CI needs. Beldona, Habib and Inkepen (1997, pp. 72) argue that the degree of variety in an industry is directly related to competitive intelligence needs. For example, Pacific Enterprises started up a CI unit in order to cope with the rapid changes in its environment (APQC, 1997, pp.48). However, little work has been devoted to understanding which set of contingency factors is related to the needs of a CIP.

Objective 2: Define which organizational factors are positively related to the need for a formal CI program.

Organizational characteristics are also key elements influencing the intelligence activity. However, there is no literature which discusses the following topic even though anecdotic observation and other studies indicate a positive relationship between the organizational characteristics and the degree of CI formalization.


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Question 2: Which contingency factors are related to the CI function characteristic?

Objective 3: Study the positive relationship between the degree of each factor and the type of CI function characteristic.

Contingency factors can have a significant influence on manager attention and, therefore, on scanning behaviour. For instance, Prescott (2001, p.3) considers that a CI program is determined by market and non-market forces. Nevanlinna (1997, p. 69, 113-120) concluded in his company case study on Nokia, that competitive environment and company culture have an influence on strategic option with regard to the CI function characteristic. Moreover, McGonagle and Vella (2002, p.61), who linked several external traits to the CI function, consider that “not every company can afford to do all types” of competitive intelligence, which relates to the idea that there are several priorities depending on the type of organization and/or the type of industry with or in which the firm is competing.

The framework: external and internal contingencies and competitive intelligence program characteristics

Traditionally, internal and external are the two main environments used when analysing the strategic position of a firm in terms of its own resources and capabilities in comparison with the rest of the sector. Several studies have adopted this perspective in order to develop a theory or prove a hypothesis. The recent empirical study developed by Peyrot, et al. (2002), suggested that (1) environmental complexity (competitors, clients, products, suppliers) and (2) organization marketing size are central elements influencing decision-maker attitudes towards the use of CI. This part of the paper defines a set of the external and internal factors relating to the CI function. The research adopts the framework described in figure 2 to discuss two different contingency factor sources and their dependent variables: - external environment, which describes the general, competitive and commercial

environment. - internal environment, which describes the organizational characteristics. - the CI program characteristic which defines the type of scanning process required for the

particular organization in the specific context.


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Figure 2. The research framework

External environment characteristics In the discussion so far, it has been observed that specialized and strategic management literature has paid a substantial amount of attention to management with regard to environmental traits and the scanning process (see, for example: Aguilar, 1967; Hambrick, 1981, Sammon, et. al 1984, Porter, 1980, Daft et al., 1988; Sawyer, 1993; Lang et al., 1997; Elenkov 1997). Although there are significant studies on the independent variables and how these forces should be analysed, little attention was given to other traits which seem to be positive in relation to the information gathering activity. Little work has been dedicated to ascertaining which variables have sufficient weight to stimulate the company into adopting a proactive approach regarding the scanning of the environment. A review of literature (Miree and Prescott, 2000, p.219; APQC, 2000, p.60-61; McGonagle and Vella, 2002, p.61-88) revealed that there are some industry contingencies which affect the coordination of CI activities in the sales and marketing function, such as, for instance: regulation, information characteristics or levels of competition which create barriers or simplify the work of the CI unit. McGonagle and Vella (2002, p.61-88), for instance, defined an exhaustive list of 19 contingency factors divided into 5 different competitive environment categories. Others, such as Ansoff and McDonnell (1990, p.71) proposed 21 characteristics for estimating the profitability of a strategic business unit. Another significant contribution was provided by Ryamond, Julien and Ramangalaby (2001) who have identified the relative importance of certain external and internal factors which determine “the nature and the level” of the technological scanning activity of small Canadian firms. This work demonstrated which external and internal attributes positively affect the way in which firms gather, analyse and distribute information and how it is positively related to an increase in scanning activity. However, the question as to whether an increase in scanning activity is related to an increase in needs has not so far been answered. The following characteristic describes the principal factors of this particular environment affecting competitive intelligence programs:

CI program Characteristic

External Environment

Internal Environment


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Industry growth intensity: Firms which are in growing markets are likely to need a CI function.

Industry life cycle may have a positive relationship with the efforts dedicated to CI (Tena and Comai, 2001). Markets which are in the growth stage of their life cycle tend to be more complex. New contenders can be attracted, new customer segments will be developed and achieved and products will change rapidly. At the same time, a growing market will attract new players. In a recent survey of PricewaterhouseCoopers it was ascertained that “fast-growth CEOs report that business information on major competitors is more important today than it was a year ago.” (PWC, 2002). The assessment of markets as attractive and profitable suggests that companies must reinforce their strategy and observe possible new competitors. However, other industrial stages may be related to different kinds of CI needs (Tena and Comai, 2001).

Industry Rivalry Intensity: Firms which are competing with high level of industry rivalry are likely to need a CI function.

Firms which are in concentrated markets, where players are well identifiable and have a substantial market share, such as pharmaceutical, automotive, semiconductor, airline, telecommunications, investment banking, bulk chemical or petroleum (Saloner, et al., 2001; p.185), for example, may need a sophisticated CI system. Several studies (APQC; 1999; 2000, 2001) show a higher presence of coordinated CI Units in these industries. Nevanlinna (1997, p.70-74) also observed the important connection between level of competition in the telecommunications industry and competitor monitor system type. Du Toit, (1998) considers that competitor intensity refers to the number and type of companies competing. This category may consider the number of direct substitutes or the degree of concentration of competitors in the market as suggested by McGonagle and Vella (2002, p.66).

Regulation Intensity: Firms which are in free (non-regulated) economies are likely to need a CI function.

The more regulated the industry or the markets, the less formalized the CI needed. Oster (1999, p. 44-47) argues the key importance of governments in affecting industry profitability. The liberalization process developed from free economies which also have a significant impact on globalisation. For example, energy or telecommunications have undergone a transition from protected to free market. No regulated market reduces the barrier to accessing information enormously and, simultaneously, the value of the information also increases. The case of Telecordia Technology, for instance, shows the regulation effects and CI activity (APQC, 2000, p.24). McGonagle and Vella (2002, p.63) consider that those companies which face low levels of regulation will have a CI impact.

Globalisation Intensity: Firms which are affected by a globalisation pressure are likely to need a CI function.

Globalisation may arise as a result of government action on trade barriers. As a result, globalisation will create new market availability and, simultaneously, new opportunities and threats in the industry. Indeed, globalization seems to be one of the main reasons for establishing a CI function (Kahaner, 1997, p.29-30; Coburn, 1999, p.3-4;). This determinant has a propensity to increase the amount of information required in order to adopt a systematic intelligence process.


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Industry barrier level: Firms which compete with low levels of industry barrier are likely to need a CI function

The competence or capabilities of a firm, such as tangible and intangible capital, economy of scale, skills, and so on are required by markets. If markets do not require particular resources, it means that the entry barriers are weak. Indeed, if no special requirements were made by markets, firms acting in that particular market would be vulnerable. For instance, Coburn (1999) argued that technology can be a determining barrier and that a reduction of it intensifies the competitive arena. Firms which are not able to improve their competence and capabilities, if required, may be threatened from other contenders outside the particular industrial system. Entry barriers and potential and substitute firms were suggested by the five forces model (Porter, 1980). McGonagle and Vella (2002, p.64-66) consider that those companies which are in markets with moderate entry or exit barriers will have the greatest bottom-line CI impact.

Level of technical innovation: Firms which compete with high technology products are likely to need a CI function.

Technology intelligence as a response to technology intensity has been analysed by several authors (Ashton and Klavans, 1997; Coburn, 1999; Raymond, et al., 2001) and seems to be positively related to the need for a CI program (Kahaner, 1997, p.31). The result of the research into the technology scanning process in small firms developed by Raymond, et al. (2001, p.134) found that the “technology characteristic significantly affects scanning activity”. Firms must be able to develop technology in order to leapfrog competitive products and so respond to customer needs. Certain “disruptive” technologies are considerably effective when it comes to outwitting the firm’s products (Christensen and Raynor, 2003). However, some technologies can be suitable for other markets or industries. Cantrell (1998) stressed this point whereby the technology of a firm can also represent a possible threat to or opportunity for those companies which have the same technology or where the technology can satisfy the same customer need in a specific market. APQC (2001) shows that firms with products incorporating a high level of technology have been adopting competitive technical intelligence programs.

Industry Network Intensity: Firms which are in low Industry network intensity are likely to need a CI function.

The network may correspond to the nature and intensity of the relationships between the external environments. It has been commonly accepted that firms have little capacity for controlling the more remote environments such as economy and social behaviour and other eventualities. Allaire and Firsirotu (1989) defined that activities such as lobbying for and against the law and corporate social responsibilities and/or negotiation, are actions used by firms against governments with stakeholders, in order to cope with external global uncertainties. In contrast, there are other environments where firms have some degree of control over the players, in the form of the management of competitors and customer relations. Fahey and King (1977) “characterized environmental scanning as the process of seeking and collecting information about events and relationships in a company's environment”. The network wants to focus on the boundaries between players and their particular roles. Andrew (1971, p.70) considers that “the complexity of a company’s environment begins to appear more manageable as its relationship to other organizations and individuals is sorted out”. However, the intention here is not to analyse the implication of


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networks but to indicate that the existence between players of a type of network will significantly affect information availability and accessibility. The number of business networks, whatever type they may be, seems to have a positive relationship with information availability. Alliance and business networks provide the firm with a rich information environment (Koka, Prescott; 2002). Fuld (1995) suggests that when capital is exchanged, information will also be exchanged.

Organizational characteristics The following are the descriptions of several internal factors which interfere with the need for a CI program.

Technology intensity in products or manufacturing process: Firms which produce goods with a high level of technology are likely to need a CI function.

Technology intensity in the product or manufacturing process may be associated with a need for intelligence. In a recent study developed by Hannula and Pirttimäki (2002), all information and communication technology (ICT) firms among the 50 largest Finnish companies were found to have reported having a systematic CI program. A survey of Canadian R&D Companies made by Calof (1999) also found that the use of Competitive Technical Intelligence was developed systematically in 59% of the companies surveyed.

Level of Vertical Integration: Firms which are less integrated vertically are likely to need a CI function.

Vertical integration represents the level of power in the entire value chain. Integrated companies tend to build a better manageable environment around them and therefore have a better control not only with regard to the process but also with regard to information. Fuld (1995, p.32) considers that highly integrated firms will control contacts and sources of information on supply and distribution.

Level of diversification: Firms which operate in several Strategic Business Units (SBU) are likely to need a CI function.

As specified by Kotler (1997) or Walker, Boyd and Larréché (1995) a SBU will have a defined set of competitors, can be planned separately from the company and will have independent factors affecting profit. The more SBUs a company has, the more it will need a coordinated information system capable of coordinating its businesses portfolio. The type of business a firm may operate is also related to the type of CI function. For instance, the degree to which a CI program is centralized will depend on the resources which can be shared across the business (Prescott, 2001, p.6).

Export Intensity: Firms which are heavy exporters are likely to need a CI function

Firms which are active in new markets need to understand those markets and a CI program is therefore needed. Exporting companies conduct competitive intelligence in a more systematic manner (Viviers and Miller, 2004). Finnish export companies, for instance, with their small domestic market, have invested extensively in CI programs in order to gain an understanding of new profitable markets (Hirvensalo, 2004).


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Organization size: Large firms are likely to need a CI function. The absence of an intelligence function, and therefore the cost of making mistakes, may have a greater impact on large firms and therefore on firms which have invested more resources in businesses. Studies showed that large companies usually have systematic CI in place (Pirttilä, 1997; APQC, 1999; Prescott and Miller, 2001; Hannula and Pirttimäki, 2002; Tena and Comai, 2004a and 2004b).

CI function characteristic A large section of literature focuses on categorising the type of intelligence used in the firm (Fuld, 1995;Tyson, 1998; Marceau and Sawka, 1999, APQC,1999, 2000 and 2001; Prescott and Miller, 2001; McGonagle and Vella, 2002 and 2003; Hannula and Pirttimäki, 2004). McGonagle and Vella (2002, p.7) and Prescott (2001), for instance, suggested several areas where the type of intelligence function is different. The way that a CI program is organized can differ between firms. The following are six characteristics which define the CI function in the organization and which represent the dependent variable in the research framework (see Figure 2).

Process (spot, project, systematic)

This dimension describes the degree of formalization of the CI function in an organization. The more systematic the function the more formalized the function will be. The CI process relates to the process of defining needs and collecting, analysing and distributing the intelligence to decision makers. Fahey and King (1977) defined 3 types of process: the irregular, which represents the ad hoc study, the regular process which is defined as a periodically updated study and finally the continuous collection process. Other authors dedicated significant resources to it (Aguilar, 1967). Generally speaking, CI activities can be performed in three primary approaches. 1. Spot which means that intelligence is required on an irregular basis and no staff are dedicated to the CI function. 2. The project process, which means that the activity is performed by specific corporate or decision-maker request and must be achieved within a definite period of time (see Prescott and Smith, 1987). In this particular case the intelligence project is supervised by specialised staff. 3. Finally, the systematic process involves ongoing scanning of the environment, analysing the information and distributing the intelligence throughout the organization. This kind of process includes different intelligence products each of which can have a specific time frame (Prescott and Williams, 2003).

Position (centralized, decentralized, hybrid)

There are several options for locating the CI function within the organization (Prescott and Miller, 2001). Empirical studies (APQC, 1999; 2000 and 2001) demonstrated that there can be as many as seven different positions within the company. However, three central classifications for the CI function can be adopted: centralized (APQC, 2000, p.77; McGonagle and Vella, 2003, p.31-32; Cobb; 2003), decentralized (McGonagle and Vella, 2003, p.31-32; Ngamkroeckjoti, and Johri, 2000) and diffused (Fuld, 1995, p.420-422).


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Level (tactical, business, strategic, corporate) It is commonly accepted that that there are three main decision-making levels: the tactical or operational, the business unit and the corporate planning level. For each category there is a specific group of decision makers each with a specific type of CI need.

- Tactical orientation consists of achieving CI bottom-line impact (McGonagle and Vella, 2002). British Telecom, for instance, has a strong tactical orientation in the CI group specializing in monitoring other players with lower rates (Prescott and Williams, 2003). Tactical CI is valuable for different kinds of managers such as brand managers, for instance, who can achieve a significant impact from it.

- Business level refers to the intermediate management position in the company and the CI program will satisfy the intelligence needs of business managers. Procter & Gamble, for instance, which in the past had its business evaluated from just one perspective, has now been taking a more business-like approach and analysing its entire portfolio (APQC, 1999, p.22).

- Finally, the strategic perspective of CI was widely argued by Sammon et al. (1984, p. 15) and Vella (1988, p. 19-28). For instance, Compaq Computer Corporation allocates CI resources primarily to the strategic decision-making process (APQC, 2000). Anecdotic observation shows that there are firms which apply strategic and corporate intelligence primarily. Baron (1995) and Fleisher (1999) discussed the importance of the non-market forces such as governments, interest groups, activists or the general public, as potential variables to be managed at the corporate level.

Location (Marketing, Finance and Technology)

Location relates to the area of CI specialization. It has been generally accepted that there are 3 main areas of intelligence (APQC, 1999, 2000, 2001):

- Marketing intelligence, introduced by Kelley (1968) will be one of the major sources of CI and will grow considerably within the firm. For instance, the last survey by Tena and Comai (2003) shows that for 53.3% of the Catalan multinationals surveyed, marketing is the most dominant location for the CI unit.

- Technical intelligence refers to the dominant use of science and competitive technical intelligence (Ashton and Kalvans, 1997; Norling et al, 2000). Typically technology intelligence includes patent and other sources analysis which should suggest technological trends, opportunities and threats for R&D departments.

- Financial intelligence is very common in those organizations which are financially business oriented. BP for instance is very financially oriented and thus differs from other companies even within the same sector (APQC, 2003 p.25).

Time Span (short, medium or long term)

The time span characteristic refers to the time factor associated with the information. Short-term and future oriented data needs were suggested by Herring (1999). Decision makers need to survey current and potential players in the competitive environment. By this Herring means that the intelligence function should build and maintain specific profiles according to the organizational need. On the other hand, future oriented CI has also been discussed abundantly in specialized and strategic management literature (Sammon, et al, 1984, p.114; Fahey and Randall, 1997; Herring, 1999; Gilad, 2003; Prescott and Williams, 2003). This type of


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intelligence tends to be prospective and anticipate the environment using the weak signals it receives.

Object (competitors, consumer, general landscape and stakeholder)

Finally, this dimension includes the research topic. A review of literature shows that there are two common terms associated with CI: competitor intelligence focusing primarily on the competition (Porter, 1980; Fahley, 1999, Sammon, et al. 1984; Fuld, 1995; Hussey and Jenster, 1999) and, on the other hand, competitive intelligence focusing on the broader environment (Prescott and Gibbons, 1993; Day et al., 1997, Oster, 1999; Prescott and Miller, 2001; Fleisher and Bensoussan, 2003). However, CI can be used to study other particular issues such as the consumer (Aaker, 1998), for example, or the stakeholders, as suggested by Freeman (1984) who defined it as “any group or individual who can affect or is affected by the achievement of the organization’s objectives”.

Conclusion

The proposed research is to generate a set of critical questions to which the organization should give some thought and consideration before setting up the CIP. Indeed, the organization should be able to pre-evaluate the CIP project by looking at a set of key contingency factors using external and internal information. The research objective is to develop an instrument to detect CI corporate hidden needs and to evaluate whether the company needs to formalize environmental scanning by adopting a CI program. Moreover, the firm will be able to detect which type of CIP is more suited to the context in which the company is currently operating.

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Table of Contents VOLUME I TRACK 1 ELECTRONIZATION (DEVELOPMENT) OF BUSINESS Session 1 MEASURING CUSTOMER PERCEIVED VALUE OF E-SERVICES Kristina Heinonen, Tore Strandvik, Hanken - Swedish School of Economics and business administration ______________________________________________________________ 1 WEB USERS’ OPTIMAL ON-LINE EXPERIENCE: A PROPOSED EXAMINATION OF A MATCHING HYPOTHESIS Fang Wan, University of Manitoba; Ning Nan, University of Michigan; Malcolm Smith, University of Manitoba _____________________________________________________ 13 IMPULSE BUYING ON THE INTERNET: ENCOURAGING AND DISCOURAGING FACTORS Nina Koski, University of Tampere ____________________________________________ 23 Session 2 ATTRACTION OF COMPANY ONLINE COMMUNITIES Maria Mäntymäki, Tuula Mittilä, University of Tampere ___________________________ 36 SOURCES OF VALUE-CREATION IN CONSUMER-ORIENTED ONLINE COMMUNITIES – RESULTS FROM A PILOT STUDY Miia Äkkinen, Virpi Kristiina Tuunainen, Helsinki School of Economics ______________ 52 CRM IN THE INSURANCE INDUSTRY: AN ATTEMPT TO USE SURVIVAL ANALYSIS IN RETENTION AND CROSS SELLING Maria T. Salazar, Tina Harrison, Jake Ansell, University of Edinburgh ________________ 68 Session 3 SERVICES, E-SERVICES AND E-SERVICE INNOVATIONS ─ COMBINATION OF THEORETICAL AND PRACTICAL KNOWLEDGE Raija Järvinen, Uolevi Lehtinen, University of Tampere ___________________________ 78 THE EMERGENCE AND EVOLUTION OF E-BANKING IN SAUDI ARABIA: THE CASE OF SAMBA FINANCIAL GROUP Mohammed Ben-Jadeed, Alfonso Molina, University of Edinburgh __________________ 90 GOING DIGITAL ─ EVOLVING DIMENSIONS OF eGOVERNMENT Jyri Naarmala, University of Vaasa ___________________________________________ 107


Session 4 THE RATIONALE OF FINANCIAL SHARED SERVICE CENTRES IN LOCAL GOVERNMENTS Timo Hyvönen, University of Tampere; Janne Järvinen, University of Oulu; Lasse Oulasvirta University of Tampere; Jukka Pellinen, University of Jyväskylä ____________________ 118 DONEGAL INTEGRATED SERVICE DELIVERY PROJECT: DEVELOPING A SYSTEMATIC APPROACH TO SERVICE MODERNISATION AND THE MANAGEMENT OF CHANGE Tony Kieran, Donegal County Council ________________________________________ 131 THE CHALLENGES OF RISK MANAGEMENT IN DIGITAL SUPPLY NETWORKS Jukka Hallikas, Lappeenranta University of Technology; Iris Karvonen, VTT Industrial Systems; Mika Ojala, Tampere University of Technology; Tony Rosqvist, VTT Industrial Systems ________________________________________________________________ 142 Session 5 VIRTUAL TEAMS AS KNOWLEDGE SHARING VENUES Marja Eriksson, Satu-Marja Mäkinen, University of Tampere ______________________ 157 Session 6 CUSTOMER PERCEIVED QUALITY IN INNOVATIVE ELECTRONIC INSURANCE SERVICES IN B2B CONTEXT Aki Ahonen, University of Tampere __________________________________________ 171 CONSUMER ATTITUDES AND REACTIONS TOWARDS THE USE OF PERSONAL CUSTOMER INFORMATION IN MARKETING Mirella Lähteenmäki, Helsinki School of Economics _____________________________ 186 A CONSTRUCTION KIT FOR THE APPLICATION OF WORKFLOW-MANAGEMENT-SYSTEMS IN PRODUCTION ENVIRONMENTS Klaus Heinz, Horst-Artur Crostack, Oliver Grimm, Reiner Sackermann, Wissem Ellouze, University of Dortmund ____________________________________________________ 200 Session 7 AN OUTSOURCING PARTNERSHIP MODEL Marianne Kinnula, University of Oulu ________________________________________ 210 THE POSSIBILITIES OF LIFE CYCLE COSTING IN OUTSOURCING DECISION MAKING Anni Lindholm, Petri Suomala, Tampere University of Technology _________________ 226


APPLYING THE VALUE RE-ENGINEERING FRAMEWORK TO SERVICES: A LONGITUDINAL IT OUTSOURCING CASE Heli Syväoja, IBM Finland; Kimmo Pekkola, Fujitsu Services Oy Finland ____________ 242 TRACK 2 MANAGEMENT OF INFORMATION AND KNOWLEDGE Session 1 COMPETITIVENESS OF KNOWLEDGE INTENSIVE SERVICES Marjo Haataja, Jussi Okkonen, Tampere University of Technology __________________ 255 BUSINESS ECOSYSTEM AS THE NEW APPROACH TO COMPLEX ADAPTIVE BUSINESS ENVIRONMENTS Mirva Peltoniemi, Elisa Vuori, Tampere University of Technology __________________ 267 KNOWLEDGE-INTENSIVE BUSINESS SERVICES AND CO-PRODUCTION OF KNOWLEDGE – THE ROLE OF PUBLIC SECTOR? Jari Kuusisto, Anmari Viljamaa, SC-Research __________________________________ 282 Session 2 ELECTRONIC BUSINESS: DEPLOYMENT AND STRATEGIES A CASE STUDY: VACON PLC, A FINNISH MEDIUM SIZED ENTERPRISE Heidi Puurunen, Josu Takala, Vaasa University _________________________________ 299 AN EXPLORATORY STUDY OF THE ROLES OF INTERNET COMMUNICATION IN BUSINESS RELATIONSHIPS Nataša Golik Klanac, Hanken – Swedish School of Economics and Business Administration ________________________________________________________________________ 315 Session 3 TRUST-RELATED TECHNOLOGIES FROM THE CONSUMER'S POINT OF VIEW ─ FEATURES SPECIFIC TO E-HEALTH SERVICES Riku Lemmetty, Kari Mäkelä, Telemedicine Laboratory, Digital Media Institute, Tampere University of Technology __________________________________________________ 325 FRAMEWORK FOR CONSUMER RELATED TRUST ISSUES IN E-COMMERCE Minna-Kristiina Paakki, University of Tampere _________________________________ 332 Session 4 DEVELOPMENT OF A PERFORMANCE MEASUREMENT SYSTEM IN A KNOWLEDGE-BASED PUBLIC ORGANIZATION Hannu Rantanen, Tuija Oikarinen, Lappeenranta University of Technology, Lahti Unit __ 340


WEB-BASED BOUNDARY ELEMENTS IN THE MANAGEMENT OF INTERNAL AND EXTERNAL COMPLEXITY IN AN INDUSTRIAL ORGANIZATION THE CASE OF OUTOKUMPU COPPER PRODUCTS OCP EUROPE, EPC ELECTRICAL POWER & COMPONENTS BUSINESS LINE Marjatta Maula, Tampere University of Technology _____________________________ 347 SUPPORT SYSTEM REQUIREMENTS FOR AN APPLIED COST-BENEFIT-SHARING-MODEL Iwo Riha, University of Dortmund; Stefan Weidt, Fraunhofer Institute of Material Flow and Logistics ________________________________________________________________ 364 TRANSITIONS IN MASS CUSTOMIZATION STRATEGIES – REQUIREMENTS FOR INFORMATION SYSTEMS Jaakko Riihimaa, Seinäjoki Polytechnic; Mikko Ruohonen, Marko Mäkipää, University of Tampere ________________________________________________________________ 373 AUTHOR INDEX VOLUME II Session 5 THE ROLES OF INTERNAL AND EXTERNAL INFORMATION IN BUSINESS INTELLIGENCE Virpi Pirttimäki, Tampere University of Technology _____________________________ 385 DISCOVER HIDDEN CORPORATE INTELLIGENCE NEEDS BY LOOKING AT ENVIRONMENTAL AND ORGANIZATIONAL CONTINGENCIES Alessandro Comai, ESADE - University Ramon Llull ____________________________ 397 THE ROLE AND TYPES OF BUSINESS INFORMATION IN DIFFERENT “SCHOOLS OF THOUGHT” OF STRATEGIC MANAGEMENT Marko Mäkipää, University of Tampere _______________________________________ 414 Session 6 LITERATURE RESEARCH APPROACH ON RESEARCH TOPIC: SCANNING COMPETITIVE ENVIRONMENT Katja Rajaniemi, ABB Oy __________________________________________________ 428 Session 7 ABSORPTIVE CAPACITY OF KNOWLEDGE INTENSIVE BUSINESS SERVICES: THE CASE OF ARCHITECTURAL AND ENGINEERING SMES Jan Waalkens, Rene Jorna, Theo Postma, University of Groningen __________________ 444


CHASING TIME IN ORGANIZATIONS – TEMPORAL STRUCTURING OF R&D WORK FROM THE PERSPECTIVE OF PRACTICE Soja Ukkola, University of Lapland __________________________________________ 459 MANAGEMENT OF COMMUNICATION NETWORKS IN KNOWLEDGE INTENSIVE SERVICE ORGANIZATIONS – THE PERSPECTIVES OF CONDUIT AND LANGUAGE GAME MODELS Matti Koivuaho, Tampere University of Technology _____________________________ 470 Session 8 ARE YOU READY FOR THE RIGHT KNOWLEDGE MANAGEMENT STRATEGY: IDENTIFYING THE POTENTIAL RESTRAINS USING THE ACTION SPACE APPROACH Roman Wong, Barry University; Tarja Tiainen, University of Tampere ______________ 480 THE CONCEPT OF REGIONAL CATALYST IN THE CONTEXT OF THE DIGITAL BUSINESS ECOSYSTEM Eeva Salminen, eBRC; Andrea Nicolai, T6; Petri Räsänen, Technology Centre Hermia Ltd; Marko Seppä, eBRC ______________________________________________________ 491 THE ROLE OF SCIENCE PARKS IN DEVELOPING COMPANY NETWORKS Anne-Mari Järvelin, Professia Ltd.; Hanna Koskela, University of Tampere ___________ 507 TRACK 3 STRATEGIZING IN KNOWLEDGE SOCIETY Session 1 STAKEHOLDER MANAGEMENT AS A PLAY Kalle Pajunen, Juha Näsi, Tampere University of Technology ______________________ 520 STRATEGISING IN MULTI-VOICED BUSINESS SETTINGS Hanna Lehtimäki, Life Works Consulting Ltd.; Johanna Kujala, Tampere University of Technology ______________________________________________________________ 534 EVOLVEMENT OF TRUST AND MUTUALITY IN EARLY STAGES OF INTERORGANISATIONAL COLLABORATION Jari Ylitalo, Eerikki Mäki, Kirsi Ziegler, Helsinki University of Technology __________ 546 Session 2 DEVELOPING MEASURES FOR MANAGERS' STAKEHOLDER ORIENTATION: A BUSINESS ETHICS PERSPECTIVE Johanna Kujala, Tampere University of Technology _____________________________ 561 CORPORATE SOCIAL RESPONSIBILITY IN CSR REPORTS Meri Vehkaperä, University of Jyväskylä ______________________________________ 572


FOUR WAYS OF DEFINING A NARRATIVE IN BUSINESS ETHICS RESEARCH Anna-Maija Lämsä, Marianne Ekonen, University of Jyväskylä ____________________ 581 Session 3 BUSINESS MODELS IN THE EMERGING CONTEXT OF MOBILE ADVERTISING Hanna Komulainen, Tuija Mainela, Jaakko Sinisalo, Jaana Tähtinen, Pauliina Ulkuniemi, University of Oulu ________________________________________________________ 590 BUSINESS DESIGN: THE CASE OF A DIGITAL ART STUDIO Sébastien Caisse, Benoit Montreuil, CENTOR, Laval University ___________________ 606 Session 4 USING ONTOLOGIES FOR STRATEGIC EARLY WARNING SYSTEMS - A PRELIMINARY ASSESSMENT OF POTENTIALS AND DRAWBACKS Stephan Cappallo, Sven Wiegand, University of Duisburg-Essen ___________________ 623 EXECUTIVE USE OF STRATEGY TOOLS: BUILDING SHARED UNDERSTANDING THROUGH BOUNDARY OBJECTS Sari Stenfors, Leena Tanner, Ilkka Haapalinna, Helsinki School of Economics _________ 635 Session 5 NETWORK CAPABILITY OF SMALL AND MEDIUM-SIZED ENTERPRISES Tiina Lemmetyinen, Lea Ahoniemi, Business Research and Education Centre, University of Tampere ________________________________________________________________ 646 COMMUNICATION IN INTERORGANIZATIONAL COLLABORATION: A CASE STUDY Kirsi Ziegler, Jari Ylitalo, Eerikki Mäki, Helsinki University of Technology __________ 656 Session 6 STRENGTHENING EMERGING INDUSTRIES IN THE LESS FAVOURED REGIONS THROUGH “BRINGING KNOWLEDGE IN” MECHANISM Kati-Jasmin Kosonen, SENTE, University of Tampere ___________________________ 670 FROM CAPITAL INVESTORS TO KNOWLEDGE INVESTORS: THE RISE OF ENTREPRENEURIAL VENTURE-TO-CAPITAL Richard Harrison, University of Edinburgh Management School; Hannu Jungman, Tampere University of Technology; Marko Seppä, eBRC _________________________________ 685 INSTITUTIONAL INVESTOR’S DECISION MAKING CRITERIA FOR INVESTING IN VENTURE CAPITAL FUNDS Harri Kinnunen, University of Jyväskylä ______________________________________ 695


Session 7 A REAL-TIME EVALUATION OF INTELLECTUAL CAPITAL, INTELLECTUAL PROPERTY AND INTELLECTUAL PROPERTY RIGHTS IN EARLY-STAGE ON-LINE ENTERPRISES Geoff Gregson, Richard Harrison, University of Edinburgh ________________________ 710 TRUST OR CONTROL ─ GOVERNANCE CONCEPTS FOR VIRTUAL ORGANIZATIONS Christoph Lattemann, Thomas Köhler, University of Potsdam ______________________ 720 KNOWLEDGE CREATION AND DISSEMINATION IN VIRTUAL ORGANIZATIONS Asta Savaneviciene, Kestutis Duoba, Kaunas University of Technology ______________ 734 Session 8 EXECUTION MATTERS? SEARCHING THE STRATEGY LOGIC FOR GROWTH OF YOUNG HIGH-TECHNOLOGY FIRMS Jukka Ala-Mutka, Compass Management Partners Oy/Tampere University of Technology ________________________________________________________________________ 744 TOWARDS UNDERSTANDING SMALL FIRM INTERNATIONALISATION – TECHNOLOGY BASED SME FOCUS Sanjay Bhowmick, University of Auckland ____________________________________ 758 AUTHOR INDEX


Author index Ahonen, Aki 171 Ahoniemi, Lea 646 Ala-Mutka, Jukka 744 Ansell, Jake 68 Ben-Jadeed, Mohammed 90 Bhowmick, Sanjay 758 Caisse, Sébastien 606 Cappallo, Stephan 623 Comai, Alessandro 397 Crostack, Horst-Artur 200 Duoba, Kestutis 734 Ekonen, Marianne 581 Ellouze, Wissem 200 Eriksson, Marja 157 Golik Klanac, Nataša 315 Gregson, Geoff 710 Grimm, Oliver 200 Haapalinna, Ilkka 635 Haataja, Marjo 255 Hallikas, Jukka 142 Harrison, Richard 685, 710 Harrison, Tina 68 Heinonen, Kristina 1 Heinz, Klaus 200 Hyvönen, Timo 118 Jorna, Rene 444 Jungman, Hannu 685 Järvelin, Anne-Mari 507 Järvinen, Janne 118 Järvinen, Raija 78 Karvonen, Iris 142 Kieran, Tony 131 Kinnula, Marianne 210 Kinnunen, Harri 695 Koivuaho, Matti 470 Komulainen, Hanna 590 Koskela, Hanna 507 Koski, Nina 23 Kosonen, Kati-Jasmin 670 Kujala, Johanna 534, 561 Kuusisto, Jari 282 Köhler, Thomas 720 Lattemann, Christoph 720 Lehtimäki, Hanna 534 Lehtinen, Uolevi 78 Lemmetty, Riku 325

Lemmetyinen, Tiina 646 Lindholm, Anni 226 Lähteenmäki, Mirella 186 Lämsä, Anna-Maija 581 Mainela, Tuija 590 Maula, Marjatta 347 Mittilä, Tuula 36 Molina, Alfonso 90 Montreuil, Benoit 606 Mäkelä, Kari 325 Mäki, Eerikki 546, 656 Mäkinen, Satu-Marja 157 Mäkipää, Marko 373, 414 Mäntymäki, Maria 36 Naarmala, Jyri 107 Nan, Ning 13 Nicolai, Andrea 491 Näsi, Juha 520 Oikarinen, Tuija 340 Ojala, Mika 142 Okkonen, Jussi 255 Oulasvirta, Lasse 118 Paakki, Minna-Kristiina 332 Pajunen, Kalle 520 Pekkola, Kimmo 242 Pellinen, Jukka 118 Peltoniemi, Mirva 267 Pirttimäki, Virpi 385 Postma, Theo 444 Puurunen, Heidi 299 Rajaniemi, Katja 428 Rantanen, Hannu 340 Riha, Iwo 364 Riihimaa, Jaakko 373 Rosqvist, Tony 142 Ruohonen, Mikko 373 Räsänen, Petri 491 Sackermann, Reiner 200 Salazar, Maria T. 68 Salminen, Eeva 491 Savaneviciene, Asta 734 Seppä, Marko 491, 685 Sinisalo, Jaakko 590 Smith, Malcolm 13 Stenfors, Sari 635 Strandvik, Tore 1


Suomala, Petri 226 Syväoja, Heli 242 Takala, Josu 299 Tanner, Leena 635 Tiainen, Tarja 480 Tuunainen, Virpi Kristiina 52 Tähtinen, Jaana 590 Ukkola, Soja 459 Ulkuniemi, Pauliina 590 Waalkens, Jan 444 Wan, Fang 13 Vehkaperä, Meri 572 Weidt, Stefan 364 Wiegand, Sven 623 Viljamaa, Anmari 282 Wong, Roman 480 Vuori, Elisa 267 Ylitalo, Jari 546, 656 Ziegler, Kirsi 546, 656 Äkkinen, Miia 52

Alessandro Comai (2005) Discover Hidden Needs brf frontiers - proceeding paper

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