El lado oscuro de la relación interinstitucional: ¿por qué las empresas salen de los procesos cooperativos?

The obscure side of the interorganizational relations: why do enterprises leave cooperative processes?

O lado obscuro dos relacionamentos interorganizacionais: por que as empresas saem dos processos cooperativos?

Breno Augusto Diniz Pereira, Juliano Nunes Alves y Patricia Ennes Silva

3. Research method

This study can be characterized as an exploratory, primarily qualitative in nature. In exploratory research, the plans are not intended to test specific research hypotheses (Hair, Barry, Money, Samouel, 2005). Moreover, the objective of this research is to explore or do a search on a problem or a situation to provide criteria and greater understanding (Malhotra, 2001).

As a strategy for observing the object of study, this research will address the method of multi-case. According to Yin "a clear need for case studies arises from the desire to understand complex social phenomena." (2005:20). The case study allows an investigation to preserve the holistic and meaningful characteristics of real-life events.

The study population was represented by pharmaceutical companies that, at some time, participated in an inter-network in the same sector, after a certain time, exited the associative process. In order to preserve the company and the data collected, it will not have his name revealed, being called, in this study, Network Pharmacies.

The unit of analysis in this study consisted of companies that came out of network pharmacies, and searched a significant sample of this population. These are located in the following cities in the Central Region of Rio Grande do Sul: Restinga Seca, Caçapava South Saldanha Marinho, Santa Bárbara do Sul and Porto Alegre. The network in question is located in the city of Porto Alegre, Rio Grande do Sul, and has affiliates in all other regions of the state.

In order to collect meaningful data that answer the study was conducted, first, a survey of companies that were part of the network pharmacies, and today no longer meet the membership base. At this stage, we considered the information - list of companies that came out - passed by the very network that voluntarily chose to collaborate with the research. The companies surveyed were selected randomly. Several companies were contacted by telephone until five agreed to participate. For these firms, data collection occurred through the use of in-depth interviews, applied personally by the researchers.

After this stage, it was the turn of the Network of Pharmacies. In this case, it was also an in-depth interviews, answered by the Managing Director of the Network, which lasted about two hours. The purpose of this interview was to make the confrontation between the perceptions of business and the network from which they belonged.

From all these questions, and because a significant number of alerts, both companies of the Network of Pharmacies, felt the need to check the path and the profile of another network structure with different characteristics, according to those interviewed, call here, Network Associates. Mentioned several times in other interviews, positively, to have a different view of the process, we sought to understand this new philosophy, and thus discover the reason for the satisfaction of its members. This interview was held in Santa Maria, with a Director of the Network. Its headquarters is located in Pelotas, Rio Grande do Sul

Finally, as the final analysis of this study, the variables diagnosed, the reasons that lead companies to come out of the networks were presented. For the study had a more significant and valid, were considered some theoretical arguments that helped in this finding.

This study used as a method, the exploratory research. In this context, the instrument used for data collection was the in-depth interview, which, according to Hair et al. (2005), to be conducted, there is always a risk that the interview process itself to influence the respondents.

4. Result analysis

The purpose of this chapter is to present and analyze the cases interviewed, seeking thus respond to the problem proposed in this paper: why do companies go out of network? To do this, and trying to facilitate understanding in this regard, it is necessary that it be divided into the following parts: a) characterization of the environmental / competitive where networks b) report of the interviewed companies that belonged to network, c) analysis of the cases presented, identifying the common and divergent d) reporting network, e) confrontation between the companies that left the network, f) submission of a new form of network and comparing the networks interviewed g) diagnosing problems in networks h) analysis of the company profile x selection process of the network; i) final report on the reasons why companies go out of network.

4.1. Environment Characterization

The province of “Rio Grande do Sul”, a region where they are located and business networks in this chapter, consists of an area of about 282 square kilometers and inhabited by 10.2 million people, descendants of Indians, Portuguese, Italian, German and Asian. The state has European features and has a high Human Development Index (HDI), a reflection of lower child mortality in Brazil, high literacy rates and improved sanitation and health (News Agencies - Government of RS, 2007).

According to the FEE (2007), Rio Grande do Sul has the fourth largest GDP in Brazil, reaching $ 156 billion in 2006. Moreover, the state of Rio Grande do Sul also has much of its economy (40.6%) based on the industrial sector, which grew 6.6% in 2004 compared to 2003. In those same years, private companies invested $ 14 billion in the state, offering workers about 29.2 thousand jobs.

The numbers have proven favorable in recent times, but the effects of globalization and the great facilities it resulted from major changes: in technology, scientific discoveries, increasing market segmentation, increased competition, increased costs of sales and distri-bution, high financial cost. (Rycroft, Kash, 2004). Thus, something had to be done to en-sure the sustainability of small and medium enterprises. One response was the formation of networks of cooperation that allowed for joint activities, facilitating the solution of com-mon problems and possible new opportunities.

In Ontario, the Program of Cooperation Network consists currently of more than 220 networks, comprising over 4,500 companies participating in the year 2006, turnover of sales of approximately 5 billion reais. These numbers have a direct impact on the economy of the state, because the profits are reinvested in the region where the trader is established (SEDAI-RS - Department of Development and International Affairs).

In the pharmaceutical sector was no different. Currently, there are about 4900 pharmacies distributed in all regions of the State and one pharmacy for every 2500 inhabit-ants. The networks in this sector amounted to 900 outlets in the State and had such great pioneer, Agafarma Network of Pharmacies. Founded in 1997, based in Porto Alegre, this network was the need for strengthening and uniting a group of businessmen to meet the challenges that the market began to demand from the global economy. The strategic alliance of small and medium entrepreneurs through associations, the practical answer was to grow into a fierce competition (SINPROFAR - Association of Retail Trade of Pharmaceutical Products in Rio Grande do Sul).

From this context, involving the associative movement and the great responsibility placed on this process with regard to the sustainability of their companies, it became nec-essary to survey in an attempt to diagnose the reasons why companies go out of network. From this point, this paper intends to report the experiences of business and sector net-works, and further analysis of these statements in search of explanations to justify such an act.

4.2. Sample Analysis

At this point, will discuss the common views of the companies interviewed and particularities in each one of them with regard to the purposes of entering the network, and the numbers of sales, profitability and market share; opportunist behaviors and relationships conflict and confidence reasons for companies to participate in the network, its advantages and benefits, the relationship between the number of members and earning potential of the company and the flow of information, the privileges of members; the interdependence between the companies and the network, the motives for companies to leave.

In the universe of companies surveyed, all of them are in the pharmaceutical market for over 10 years, and part of this process within the first 5 years of the network. Among these companies, which have remained on the network for a period of up to two years were less satisfied with the results, noting a lesser extent, the benefits in the short-term goals for the network. The exception to this rule comes from the case number 5, that even with less than a year to network, followed its development and saw great advantages in the associative process, if not in your company, at least those of its competitors or partners.

In relation to the goals that made them enter the network, all cases reported basically the same: bargaining power in the negotiation process, to obtain better prices and discounts, making the company a little more competitive. Even if the number 3, which came under pressure in the process of the network itself to prevent competition, it was considered the same goal, only secondarily.

The numbers related to billing, staff, products sold, profitability and market share were also discussed during the interviews. Of the 5 companies interviewed, only 1 did not disclose the information listed above. From the same focus, the companies that were less than 2 years at the network claimed that they had had no change in their numbers in that period. Already, companies with more participation time observed an increase, even slightly, their numbers in percentages. As one of the companies managed to satisfactory increases in sales, number of employees and market share, the other leveraged its earnings through sales and a larger number of marketed products.

In terms of perception of entrepreneurs about opportunistic behavior, conflict and trust between network members and network for enterprises, some issues should be considered. All companies have diagnosed high levels of conflict in the business to network. The difference is, again, in time to participate in the network, the companies presented in cases 1, 3 and 5 considered these negative levels in the development of the work, while companies in cases 2 and 4, with more time to network, claimed to be positive, they help in preventing problems and business growth.

The opportunist behaviors were also viewed by the companies that came out, except for case number 5, that even outside the network, had great influence and counted on the Board of the Network. These behaviors have led to distrust by the members, who believed they were paying for the personal interests of other members - linked to the Board. The example may be mentioned the negotiations made by the network, where they were guaranteed to the suppliers, the purchase of many products very significant in the total sales of these pharmacies. From the standpoint of those companies, one would be winning with it, and, of course, were not.

Price, exclusive discounts, status, support and guidance, strength and competitive advantage were the main responses to the reasons why a company to enter a network and thus, these factors for all respondents, composed of all the advantages that the network should offer to its members, and the purpose for which it should be. In the short term, the main benefits highlighted by the companies that have greater participation in the network were the marketing activities and present status in the network name displayed in the storefront. The long-term, these same companies show financial profits - when there are less than the costs generated - and the structuring of the store, with different design, trained staff and standardization of customer service. The other companies did not show any kind of benefit.

When asked about the relationship between the number of members and earning potential of the company in associative process, the response was unanimous: the more members, more must be gained by companies, since the total purchasing power increases and the network becomes more bargaining power in the negotiation of purchases (in prices and discounts). In only one case was not extamente what happened. It was felt that, by negotiating directly with suppliers, discounts could be obtained equal or even better than those mediated by the network.

The perception of entrepreneurs, as the flow of information, presented differently. In most cases, it did not seem to be a problem, although not systematic. The information was relayed by the network, primarily through circulars and, subsequently, via e-mail. From these documents, the companies got to know about special offers, discounts, rule changes and major decisions. Already, the exchange of information between member companies, almost did not happen. Most cases held little interest from the network to promote such exchange.

Another important issue concerns the different privileges enjoyed by the companies. The companies considered that, even without evidence, those belonging to the Board made decisions always in defense of their own interests, and thus were systematic actions to the entire group, regardless of their circumstances or area of expertise. Moreover, companies with purchasing power far below the acceptable, as were most benefited in the associative process, acquire the purchasing power of larger companies.

Information about the flow of information and the privileges of some companies just did not make the testimony of the latter, as that was nearest to the Board and thus had a different perception of events. Anyway, none of these issues was considered a major problem for companies, despite the awareness that information is essential for the management of their businesses. What is sought, basically, were responses to the needs of the pharmaceutical market and future trends to enable them to prepare. At this point, the process, network, was flawed.

Regarding the dependent relationship between business and network, the first 4 cases said to be total. In this case, specifically, the relationship is presented in a negative way, because, according to the rules imposed, companies should not act without the consent of the network. Encouraging innovation and progress of companies, when it did, it was demonstrated from meetings, courses, training and events held by the network. Nevertheless, this perception was not shared between companies. Some of these activities not considered suitable for this purpose.

In response to questioning about the reasons that led the company to leave the network, some factors were cited. One refers to the increased costs, specifically those related to the monthly payment and the media. In this case, the costs had increased disproportionately to earnings, and occurred in an arbitrary manner, without time to enter the company's financial planning. This happened, for example, investments in television media, where the cost was apportioned equally, regardless of company size and region where he worked.

In the case of Pharmacy number 2, its output is made through a change of perception within the network and the lack of confidence arising from the event. With business growth, and consequently the network that saw an opportunity for further growth, changing the focus of business interests for their own interests. If so, this happened from the investment of its members, leveraged further by the arrival of a new form of membership: the members. From this fact, questions of trust were committed, making it impossible to continue the process. In the case of number 5, the output was for personal reasons of negotiation and self-gain: if the company remained in the network would lose the company-supplier relationships that bring more benefit to the company. Again the cost-effectiveness has become a basic aspect of analysis.

Despite the events cited, the companies did not repent of having participated in the associative process. Most of them consider that the knowledge acquired in this period formed the basis for new actions taken outside the network. They include the contents analyzed initially - sales, profitability, market share, number of employees and amount of products sold - which grew in the post-network. Would not the network just a learning phase in which firms are to truly consolidate?

A final point to be considered is the identity of the company. Many of them consider to have it lost in the period when they were on the network, due basically to the fact that his name disappear from their facades. Somehow, this fact upset the owners, especially those of smaller cities, where there are cultural differences of the major centers. Thus, two of the interviewed companies, in choosing a new network, chose the one that did not interfere in this question, and where the network name appeared with little emphasis on the facade of business. Frame 2 is presented a comparative overview about the testimony of the companies interviewed.

4.3. With the word: The Pharmacies Network

In this chain started his career on April 3, 1997 in Porto Alegre, from an initiative of 55 stores, large and small, seeking a better position to compete in the market, especially with large networks. Today, after 10 years, this already has 300 stores and an associated final project to reach 500 stores, even indefinitely.

Frame 2 – Most rated variables

The network has, in its formal structure, an elected board, with a term of 2 years, with renewal for another 2 years, and consists of owners of pharmacies. In the case of re-election at least 50% of the governing body must be renewed. It also has an Administrative Council and other Advisory participants of the General Assembly, and 35 employees.

The main advantages offered by the network can cite the training and advisory services, especially with regard to the legal aspects, as in the case of small businesses, if they are isolated, have little access. In addition, they acquire the status that brings in the network name, considered essential for companies in the industry, enable it to compete and make it visible to the consumer. Another aspect considered is the exchange of experiences between the companies, made possible by the level of cooperation between them. Success stories are presented in meetings with members of the other for analysis and possible adaptation to their companies.

In the short term, the company that enters the network already provides a portfolio of prospects up to 3000 consumers. This is possible through a policy of loyalty cards, distributed to network clients, which allows the purchase of medicines in any store of the chain, discount and other benefits. Already, the long-term, companies can turn potential customers into actual customers, and thereby improve their earnings. For this to occur, the network provides the necessary support - training and advice - and the affiliate need only follow the guidance of expert

The biggest difference of the network is in its policy of negotiation. Of the total of the discount negotiated for its members, from 1 to 2% are in the network for operating expenses and other investments: media, merchandising material, uniforms, etc.. According to calculations made by the network, the company does not gain associated with the negotiation outweighs the investment made by the network on behalf of its members. All of this negotiation, according to the Board, is known to all members.

Despite the harmony highly visible, in some situations could be observed moments of conflict between the partners. This applies to the "invasion of territory" - forbidden by the network - where a company distributes pamphlets promotions outside their area of expertise. In these cases, the network operates, promoting dialogue and recalling the basic rules for the coexistence of the group.

Regarding the flow of information, the network opted for a computerized system, with the proposal of a 'web portal' where 70% of members are already interacting. But it was not always so. This change was only possible now, due to a significant number of pharmacies that have passed through the succession process, providing cultural changes in business management. At one time, the information was passed via a 'circular', sent by mail or through distributors, the logistics of delivery of drugs was seized. Information among member companies is through a forum, online, via computer. This also was only possible now, the same cultural issues that prevented the use of such technologies.

From the standpoint of the network, the high number of members only benefits all. Thus, the brand is sprayed and customer loyalty is faster. The major problem in relation to this point, concerns the assemblies, which led to a change in status. The impossibility of obtaining quorum at meetings and votes, we decided to create a new category of affiliate partners, which allows voting with the minimum number of members. The socio-affiliate has a license to use the mark, a process similar to the franchise, which differentiates it from affiliates of three aspects: the monthly payment higher, can not be voted and can not vote.

The selection of new members go through some specific criteria. One concerns the physical size of the company and can not be less than 40 m. The other refers to the time the market, as stipulated in at least 2 years. Companies seeking to network, seeking a solution to their financial problems, are not accepted. The initial investment is significant for such an undertaking and should be performed in the shortest time possible. This is a renovation of the store to the philosophy of the network: new paint, new light, new layout, in addition to the royalty paid to enter. By past experience, the company that has financial problems at the outset tends to worsen their situation with the investments required.

The network currently is worrying about the high dependence of business to her, and in this sense, is making some proposals. One refers to a scoring model that will differentiate and reward companies with respect to their potential, seeking innovation and progress of each company, making each one think for themselves, and seek advice on the network of their actions, not the solution of their problems.

Among the problems presented by the companies during this period, we can mention, first of all, inefficiency in the management of business and, therefore, issues related to the high cost and reduced profitability. In no time, according to the network, it is the promise of increased financial gain. The network believes that, from the support given in relation to consulting, media, and structure, companies can get the better numbers, but only as a result of these actions. Another problem raised concerns the competition that, in some cases, shown unfair, causing, in most cases, thoughtless actions and desperate actions that promote the failure of the company.

This financial deterioration is only one of the reasons that lead companies to leave the network. The monthly payments begin to slow down, people do not participate more in meetings, and guidance when requested, is carried out so late. In this context, some companies are closing their business or even sell them to others. However, the main factor is the failure to comply or they do not believe in them or because they were unable to fulfill what is determined by the network, and voted in the assembly. This is due mainly to the rules of purchase, where 65% of the purchases must be made with the partner number 1, and the remaining 35% can be divided among the other fornecededores accredited by the network.

4.4. Why do the companies leave?

The main problem of research that guided this study refers to the reasons that lead companies to come out of the networks involved. Diagnosing these reasons means to minimize the problems arising from this decision, which hamper the success of the associative process and contributing at least in some stages of its development - the creation of their status, and formatting of the contract selection process of its members - reducing the problems at the time of a possible dissolution.

During this study, five companies were analyzed in order to discover those reasons. The following is a brief summary of the statements given by the companies interviewed, with specific reference to the reasons which led them to leave the network.

The case number 1, the city of Restinga Seca, emphasized the relationship investment versus return over the period he spent in the network. Although the structure made possible by the process, expenditures for these purposes did not justify the gains received. Furthermore, the decisions were imposed - the companies were not consulted about the decisions to be made - created a certain discomfort in the business to network, leading to lack of confidence about the real interests of the network.

The second case presented as a main justification for its withdrawal, lack of trust in the network, which shows changes in perceptions about its purpose - business growth through greater bargaining power with suppliers. Over time, without much trouble to invest in shares imposed, but troubled by the lack of control over their own business - put then in the hands of those who no longer trust - the company chose to seek new alternatives. What differentiates this company from the first and the fourth is the time when this part of the associative process and structure that she already had prior to entering the network. In this case, their gains were more established and entrepreneurial vision had more space, and are thus better prepared for the market and their needs. In the third case examined, the injury was apparent in the first year of the associative process and, in an attempt to prevent competition, the company submitted to the rules imposed by the network for another year. The original rules focused primarily on restructuring the company's image and marketing efforts that would enable the achievement of this goal. Initial benefits were not realized, primarily due to lack of competition in the city. The clientele was already formed and nothing could change that. The marketing activities and new corporate image generated costs for the company, and these, in turn, led to an increase in sales or more customers driving by your store, as the vast majority of the city has been buying the company. Expenses were in vain and the calculations estimated that another competitor in town would bring much harm as those raised in these actions. All that change had no reason to be - it took longer to have the same billing.

In case number 4 presented in this report, the costs of tuition and the media, during his 4 years on the network increased, with no provision in the budget, while the benefits in this same period, had a significant increase. The few financial gains made during this period were not sufficient to cover the actions of the media imposed by the network.

The last case presented also highlighted the cost-benefit aspect as the main reason for leaving the network. The main issue involved the choice to decide between staying in the network and thus increase their bargaining power, but lose the loyalty of your best customer, or leaving your network, and pay a negotiated alone, but ensuring its sales volume in relation to representations. At present, the decision weighed on the side of higher revenues.

Despite cultural differences, and regional management, submitted by com-panies, one issue was clear: when the problem affects the pocket of the entrepre-neur, it's time to withdraw from the process. The cost-benefit, then, becomes one of the main causes of this decision.

Simply put, Souza, Rocha (2009) and Ding, Huang (2010), the cost-benefit analysis provides means to systematically compare the results of a given project with the values of resources used to achieve the desired results. This tool lists all the benefits and costs, tangible or intangible, easily quantifiable or not, that will affect all members of the particular project is adopted.

For the companies interviewed, most reported that this relationship was affected during the associative process as a result of various procedures. Shares imposed by the network, from a given time, and passed the phase of euphoria and creating expectations of the outcome of the case did not have the same meaning. What at first was tolerable, because it is a new experience, with great promise of succeeding, it has become harmful - in the broad sense of the word - causing serious harm to businesses.

Another aspect has been observed with some vehemence in this study: the relationship of trust between enterprises and network. For Janowicz-Panjaitan, Noorderhaven (2009) trust is related to the expectations one has about the behavior of another, where the first hold that their safety is preserved by the attitudes of the second and vice versa. According to Das, Teng (1998) trust means taking risks and leaving themselves vulnerable attitudes of those we trust, with whom we interact.

On the one hand overconfidence can pose a hazard, the possibility of negligence, with uncertain results possible and, secondly, its absence or over-confidence can mean the impossibility of the ultimate goal of a company which is the well-being of its members (Hart, Teixeira, 2005). According to Du, Ai (2008), the idea is that the network configuration promotes an environment conducive to sharing information, knowledge, skills and resources essential for innovation processes.

In this light, these two variables - money and trust company network - were crucial to firms make their decisions and choose to leave the network. Despite the different paths taken by them, these variables now have a great importance in the analysis of a new project, even when the choice involves entering into a new network. But that's another story.

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