Methodological Considerations in Industry-related Logistics Research

1. Methodological Considerations in Industry-related Logistics Research Prof. Lauri Ojala NORDLOG Ph.D. workshop Trondheim, June 12, 2002

2. The presentation discusses... … the benefits of industry-related research, … the constraints of industry-related research, from a methodological point-of-view. The presentation also contains examples of industry-related “dissertation research trajectories”. However, the scope is not limited to Ph.D. research.

3. Industry-related research? • Research conducted and led by university staff for firms or groups of firms or industry representatives. • Firms or their representatives take actively part in the research process. • The private sector is funding parts or whole of the research. • Post-graduate theses often part of the process. • M.Sc. Thesis work not included here, if it is not part of a university-led project. Industry understood in the broad sense of the word (näringsliv)

4. How does industry-related research start? 2. Simultaneous matching Research proposal with University X 3. Contract research Research proposal to University X An on-going project or process of Firm A 1. Active promoting Research proposal from University X Time

5. The entry modes affect the available choices 1. Active promoting is often based on previous contacts The research idea comes from the university or an individual researcher. These have a model, method and/or theoretical framework that needs empirical evidence or testing. 2. Simultaneous matching may occur as part of a larger research program The idea can come from either side, or from a public research program. The applied model, method and/or theoretical framework often chosen jointly. 3. Contract research is usually very pragmatic and short-term The firm (or industry) has defined an area or issue that needs research input. The choice of method or framework may be very limited.

6. The source of funding has a bearing too Fully private funding Public-private funding Public funding Public co-fund, group of firms Unit of a firm Public co-fund, one firm Public funding only A firm Group of firms Often required, restricted Not easy Not easy Not easy Often required Public reporting Required High within the unit, often low in other units or externally Medium to high within the firm, often low externally Medium to high within the firm, often low externally Low to medium within the group, often low externally Low to medium within firms, medium to high externally Medium within the group, often low externally Internal and extrenal access Public funding = publicly funded research agencies, public foundations or universities own funds.

7. Theory, Method and Observation; Openness • Positivistic research typically starts with theory and ends with observations • Theory -> Method -> Observation • Grounded research approach has often the opposite order • Observation -> Method -> Theory • The openness of framework is often low in positivistic approaches, and high in open-ended research. • The approaches starting with well-founded theory and/or method suit industry-funded research better than e.g. open-ended grounded approaches.

8. Openness of framework in 25 Nordic Ph.D’s Contribution to Theory testing Contribution to theory generation Contribution to practice Adapted from: Vafidis, D. (2001) Methodological tendencies in logistics research, Empirical evidence from 25 Finnish and Swedish doctoral dissertations 1994-1998, TSEBA, Series D

9. Key benefits for firms of university-based research, with related concerns • At best, offering a neutral and external view based on the latest theoretical thinking. • Maintaining the unbiased approach even under criticisms and opposition from within. • Possibility to approach external stakeholders thanks to the universities’ integrity. • Maintaining high research ethics that does not compromise institutional or personal integrity. • A long-term expert relationships that goes way beyond consultancy type of assignments. • Depends on mutual understanding of long-term benefits.

10. Firms’ research interest goes seldom beyond solutions of practical and short-term value “Researchable domain” Scope of research General Theory building Open-ended questions Model building and testing Case descriptions Theory validation Analytic approaches Pragmatic operational or competitive issues Detailed Actor’s approaches “Solutions” Timeframe Week Month Quarter Year 4 years

11. Background Industry objective Research objective Funding Duration Main findings Backing Resistance Access Choice of method What happened Three illustrative research trajectories • Three single firm cases: • A no-go because of corporate politics. • Value-for-money through better supplier knowledge. • A strategic shift identified, but the firm unable to change.

12. Background: After Sales division of a stock-listed manufacturer. Industry objective: Implement a global direct distribution (DD) model. Research objective: Test, analyse and apply direct distribution concepts. Funding: Direct funding approved by VP After Sales. Research duration: Intended 3 years, realised 1.5 years. Main findings: DD with clear operational benefits and cost savings. Backing: Board split over strategy and preoccupied with costs. Resistance: Some Board members and other divisions. Access: Excellent within the unit, limited in other units. Method: Multiple case analysis on SC benefits and costs. What happened: The concept not approved by the Board, VP resigned; after two years the concept was re-introduced under another name along a massive e-business project to enable global on-line visibility. No academic reports. A no-go because of corporate politics

13. Background: Production division of a stock-listed manufacturer. Industry objective: A coherent sourcing strategy for key suppliers. Research objective: Analyse & model industrial buyer-supplier relationships. Funding: Direct funding approved by VP Sourcing. Research duration: Intended 3 years, realised 2 years. Main findings: Intra- and inter-functional issues undermine supplier relationships; normative rules difficult to give. Backing: Division management and key Board members Resistance: Limited; intra-functional frictions affected data gathering. Access: Excellent with the unit and suppliers, good in other units. Method: Multiple case study within firm and suppliers; interviews. What happened: The intended sourcing strategy did not materialise; VP was absent a lengthy period. The data and expertise gathered was very useful when preparing an extensive e- sourcing implementation. Dissertation expected in 2003. Value-for-money through supplier knowledge

14. Background: A stock-listed distributor Industry objective: To find arguments for the current market governance. Research objective: Understand the business logic in logistics terms. Funding: Company-related foundation. Research duration: Intended 3 years, realised 2 years. Main findings: Current business model and strategy unsustainable. Backing: CEO and VP, but Board split over principles. Resistance: Some Board members. Access: Excellent within the firm and with external stakeholders. Method: Multiple case analysis on SC benefits and costs. What happened: Top management in disarray, CEO retired, opposing Board members left the firm, new CEO had difficulties gaining control. The indicated business logic was desperately needed. Controlling stake eventually taken over by an expanding firm, focused on logistics strategy. Dissertation in 2003. Strategic shift identified; firm unable to change

15. Problems in industry-related research • Discontinuities in business. • Key contacts changing positions or firms • Mergers and acquisitions • Change in management or strategy • Sudden changes in the competitive position • Lack of contingency plans in the research contract. • Unclear confidentiality issues or public reporting principles. • Lack of time to communicate the research process. • Lack of interest for methodical or theoretical considerations.

16. The joint-Nordic PhD programme in logistics Ph.D. Course on Case Study Research in Logistics Turku School of Economics and Business Administration, Turku, Finland January 14-18, 2003 Contact for further information: log@tukkk.fi

17. Course outline The methodological basis of the course lies in the three different approaches to the discipline: the analytic approach, the systems approach and the actor’s approach as presented by Arbnor and Bjerke, 1997. Each approach leads to different research questions and requires different methods of inquiry. The students should learn to understand this relationship and to choose the methods that are consistent with the approach chosen. The course consists of the following parts: Part a. ``State of the art’’ in logistics research; input from senior academic researchers. Part b. Feedback from senior researchers on the students’ own methodological considerations. Part c. The students prepare papers on the course subject, ``Applying Case Study Research Methods in logistics research’’. Tentative cost per participant € 500 incl. accomodation and meals. For Nordic participants, external funding may become available.

18. Preliminary Course programme Tue, Jan 14 • Introduction to the course. By Professor Lauri Ojala • A Review of Nordic Logistics Research Associate professor Britta Gammelgaard • An Analysis of Nordic PhD Dissertations. Econ. Lic. Dimitrios Vafidis and Professor Lauri Ojala • A Framework of Logistics Research By Professor Stock • Evolving trends in international logistics and SCM research By Professor Stock. • The Arbnor & Bjerke framework for business research, Associate professor Britta Gammelgaard • Theoretical and Methodological Issues in Case Study Research (a). Professor Mats Abrahamsson • Theoretical and Methodological Issues in Case Study Research (b). Professor Lillian Barros • Theoretical and Methodological Issues in Case Study Research (c). Assistant Prof. Olli-Pekka Hilmola • Theoretical and Methodological Issues in Case Study Research (d). Professor Jari Juga • Constructive Research in Business, Accounting. By Professor Kari Lukka, • Epistemological considerations in research. By Professor Olav Solem • Presentation of own research questions and methodological considerations. In groups led by professors • Introduction to writing scientific papers. By Professor Marianne Jahre • Collaborative writing. By Docent Andreas Norrman • Collaborative paper writing using Case Research method in logistics research. In groups with professors • Hand out and presentation of the students’ written papers to all participants. • Rounding off the course and course evaluation Wed, Jan 15 Thu, Jan 16 Fri, Jan 17 Sat, Jan 18