Barile, Sergio; Carrubbo, Luca; Iandolo, Francesca; Caputo, Francesco
Article
From 'EGO' to 'ECO' in B2B relationships
jbm - Journal of Business Market Management
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Suggested Citation: Barile, Sergio; Carrubbo, Luca; Iandolo, Francesca; Caputo, Francesco (2013) :
From 'EGO' to 'ECO' in B2B relationships, jbm - Journal of Business Market Management, Freie
Universität Berlin, Marketing-Department, Berlin, Vol. 6, Iss. 4, pp. 228-253,
https://nbn-resolving.de/urn:nbn:de:0114-jbm-v6i4.691
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RESEARCH ARTICLE
J Bus Mark Manag (2013) 6(4):228–253
URN urn:nbn:de:0114-jbm-v6i4.691
Published online: 31.12.2013
----------------------------------------
© jbm 2013
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S. Barile,
Full Professor in Business Management. University of Rome "La Sapienza", Dept. of Management;
sergio.barile@uniroma1.it.
L. Carrubbo,
Ph.D. in Business Management. University of Cassino and Southern Lazio, Dept. of Economics and Law;
l.carrubbo@unicas.it.
F. Iandolo,
Ph.D. in Business Management. University of Rome "La Sapienza", Dept. of Management;
francesca.iandolo@uniroma1.it.
F. Caputo,
Ph.D. Student in Business Management. University of Salerno, Dept. of Business and Research Studies
(Management and Information Technology); fcaputo@unisa.it.
From ‘EGO’ to ‘ECO’ in B2B relationships
Sergio Barile · Luca Carrubbo · Francesca Iandolo · Francesco Caputo
Abstract: This paper addresses sustainable development through the lens of the
Viable Systems Approach (VSA), a theoretical approach developed by, among others,
Golinelli (2000, 2005, 2010) and Barile (2000, 2008, 2009) to extend the relative
reflections of the governing processes of a firm by focusing on the research of
consonance within the specific context in which the firm operates. In fact, the aim to
ensure a sustainable value proposition, and therefore be more competitive, can only
be achieved if one understands and anticipates the evolution of the emerging
contingencies while still attempting to exploit one’s own distinctive features over time.
These issues have particular relevance in business to business (B2B) socio-economic
relationships where all of the elements are homeostatically balanced and must
constantly change to adapt to the external contingencies, and the lack of ability to
adapt and maintain balance could harm or end the relationship.
Keywords: Sustainability · Viable Systems Approach · B2B relationships · Change
From ‘EGO’ to ‘ECO’ in B2B relationships
229
Introduction
In the last several years, the paradigm of sustainable development has acquired
increasingly more relevance and has come to be understood as a form of development
of business activities that, in the wake of long thought, is capable of acknowledging
social, environmental and economic issues, thus ensuring the survival of social
systems and organizations.
The principles of social responsibility and sustainability, therefore, have become the
drivers of sustainable business activity, and the aim of those principles is to create
value and harmony with the reference entities of the enterprise. Accordingly, such
sustainability enables businesses to enhance the intangible components of their
assets (such as knowledge, relationships and trust within the specific context), which
are the main source of the benefits and success for the companies under the current
competitive conditions.
This paper addresses sustainable development through the lens of the Viable
Systems Approach (VSA), a theoretical approach developed by, among others,
Golinelli (2000, 2005, 2010) and Barile (2000, 2008, 2009) to extend the relative
reflections of the governing processes of a firm by focusing on the research of
consonance within the specific context in which the firm operates. In fact, the aim to
ensure a sustainable value proposition, and therefore be more competitive, can only
be achieved if one understands and anticipates the evolution of the emerging
contingencies while still attempting to exploit one’s own distinctive features over time.
These issues have particular relevance in business to business (B2B) socioeconomic
relationships where sustainability manifests, as we shall see, its value as a
driver capable of promoting the shared development of parts. In this regard, the work
aims to highlight the contribution that sustainability can offer to the maintenance of
long term B2B relationships in a circular logic in which the focus on sustainability
fosters the conditions for a long term relationship and the continuation of the
relationship encourages the attention of the parties to sustainability.
The underlying business category these elements act on is value, intended as a
positive dimension that is improved and enhanced through the interactive dynamics
that involve all the actors that participate and contribute to the development of B2B
relationships that can be defined sustainable when considered in an inclusive and
long-term perspective.
The concept of change, which is related to the need to maintain equilibrium in a
dynamic way, originates from rational actions (a function of perceptions) or intuitions
(understood as more impulsive effects) and takes into account more than a
phenomenological reality; some choose to change, while others are forced to do so as
a result of special circumstances.
From ‘EGO’ to ‘ECO’ in B2B relationships
230
Systems and the systemic perspective
Systems studies and theories increase knowledge about multiple perspectives
(informatics, managerial and organizational) and structuring capacities, thereby linking
components, connective functions and practical applications (Flood, 1990; Flood &
Jackson, 1991). Systems are found in nature, society, science, economics and within
IT tools. They are inside the human mind, exist within organizations and affect general
behavior. Systems have been the subject of many reflections and definitions, some of
which are summarized in Table 1.
Table 1:The meaning of Systems Theories
Focus Author
«a system as a complex of interacting elements» (Von Bertalaffy, 1956: 142)
«many part compositions boundaries, connections and different
relationship levels show certain signs of system relevance and allow
an interpretation of its own capabilities as being critical and influential
and its relations with correspondent supra-systems and sub-systems»
(Parsons, 1965: 16)
«a system as an entity that is adaptable for the purpose of surviving in
its changing environment»
(Beer, 1975:174)
system elements are rationally connected» (Luhmann, 1990: 181)
«sub-systems focus on the analysis of relationships among its own
internal components while supra-systems focus on the connections
between the analysis unit and other influencing systemic entities in
their context»
(Golinelli, 2005: 230)
«a structure can be studied (what it is? How it is made?), a system
should only be interpreted (how does it works? What logics does it
follow?)»
(Barile, 2008: 75)
«a system can be defined as an entity which is a coherent whole» (Ng, Maull, & Yip, 2009: 379)
«managers have to plan structural adjustments to guarantee the
survival of the whole system, constantly formulating new
interpretations of the business scenarios in order to find an adequate
positioning, implementing periods of adjustment, transformation and
redefinition of the organizational structure»
(Mele, Pels, & Polese, 2010:
131)
Source: Author’s elaboration
Each system is characterized by a dynamic evolution and originated from a
specified structure (as a set of individual elements with assigned roles, activities,
responsibilities and tasks to be performed in compliance with specific shared norms
and constraints)as part of an ongoing relationship with a number of relevant external
systems (Golinelli et al., 2002; Barile, 2008; Barile & Saviano, 2008).
Every system is unique, it is different from every other ones. Given that the same
entity can carry out iterative processes, but comparing it with other entities during a
defined time and within similar situations, we can observe relevant divergences in
operations, effects and base-logics. Starting from the same structural features, a
comparison between the performance effects of any organization will certainly reveal
From ‘EGO’ to ‘ECO’ in B2B relationships
231
some differences (Rapoport, 1968). Therefore, we must consider many aspects and
factors when analyzing system behavior, such as experience, knowledge
improvement, ability construction, personal competences, tacit and codified
procedures, and specific operations, beginning with the potential application of internal
specific competencies and working toward the external effective manifestation of
actual patterns that are capable of evaluation (Krippner, 1991).
According to the VSA, within business development, the identification of external
system entities (such as business organizations) is important in potentially providing
input, acquiring the planned output and establishing the relations between the
components of the actual structure and the other entities involved in many different
types of relationships (Barile, 2008), such as:
 relationships between physical components that shape a given entity in a
particular context;
 relationships between various logical components of an entity in a particular
context;
 relationships between the various physical components and various logical
components of the external entity.
From this perspective, we can observe how any system can take priority over
single elements because these elements cannot be reduced to the sum of their links.
Thus, it is evident that organizations are not autonomous entities but rather are
dependent upon individuals and the networks of relationships that exist among them
(Vicari, 1991). The development of such a form of systems’ governance requires
certain social patterns that are appropriate to enterprises as well as to individuals, thus
requiring a sort of cultural attitude that is capable of influencing the behavior of not
only individuals but also businesses (Barile & Polese, 2010). Based on the features of
the systems, the value of solutions is generated through relationships; the firm’s ability
to communicate with its target and its capacity to obtain advantages from them are
based on iterative successful interactions. If a firm does not interact with other
participants, it cannot create the preconditions for the development of long-term
relationships (which is critical in B2B relationships where only the prolonged
interaction allows to maximize the value of the report, Wang & Bowie, 2009) and there
will be no reticular system created. In that case, we would see a simple set of business
units, consisting of a potential center with only stand-alone hypothetical connections.
Contact, create, participate! To survive in the long-term, a given system tends to
absorb energy, consciously or not, from the supra-systems (framework) that subsystems
(components), used to help develop and grow the eco-system in which it
works (Barile, 2008; Barile & Gatti, 2007). According to the VSA, the concept of
competitiveness (related to system viability) is strictly linked to the consonant relations
and resonant interactions among systems that share their own resources for the
system’s benefit in a win-win relationship to capture and manage its component
dynamics, especially with reference to the variations between internal characteristics
and external opportunities (Golinelli, 2005). Emerging relationships are very much
From ‘EGO’ to ‘ECO’ in B2B relationships
232
related to individuals who interpret and realize business missions, strategic actions,
and management practices through their values and cultural identity (Golinelli, 2010).
This type of social relationship can be defined as a «relational pattern that
characterizes every individual in a business and that involves personal, business and
stakeholder relations» (Polese, 2009a:203). Accordingly, in social relationships, the
consensus is favored when systems are mainly constituted by cohesive, interpersonal,
fiduciary, long-term relationships that are based on values rather than rules.
Change as a driver for sustainable B2B relationships
Change for identity enhancement
Today, change is often associated with the concept of evolution, or something
developing in a progressive condition, which implies advancing to the next level from
the previous one. The desire to change entails the need to improve and to grow, not
necessarily by size or consideration, but certainly to grow in a sustainable manner.
Considering that the framework contexts are subjective and are functions of specific
changes placed in a more objective and invariant environment, each specific suprasystem
is able to influence, more or less significantly, the type and the efficiency of
decisions for any organization, especially through the direct effects on their subsystems
(Golinelli, 2005; Barile, 2008).
Thus, a system does not change to modify its identity but works to stabilize itself
over time in an attempt to learn how to interpret the surrounding environment and its
complexity, to understand how, when and why to change. Obviously, change requires
the identification of new bases that must be leveraged to enable the establishment of
relationships, which, in turn, makes the fulfillment of the expectations of all involved
parties possible (Barile et al., 2012; Saviano & Caputo, 2013).
This mutual satisfaction acquires particular importance in B2B relationships where
the failure to satisfy one of the involved parties usually results in the termination of the
relationship and the inability of either party to achieve the shared goals (Haverila &
Naumann, 2011). However, if both parties are highly satisfied and they believe the
relationship is sustainable, they tend to spend more time with the partner and strive to
improve new transactions in other fields (Bolton & Bramlett, 2000; Reichheld & Teal,
2001; Gruca & Rego, 2005; Cooil et al., 2007). To enhance the relationship, change
must imply sustainability.
It follows that change must be considered a driver for sustainableB2B relationships
where, specifically, sustainability is perceived as «a process of change in which the
exploitation of resources, the direction of investments, the orientation of technological
development, and institutional change are made consistent with future as well as
present needs» (Brundtland Commission, 1987:15). Sustainability, therefore, is the
development that meets our needs without compromising those of others.
From ‘EGO’ to ‘ECO’ in B2B relationships
233
In this sense, a commonly shared representation of sustainability can be seen
really as the result of three dimensions, as in the Figure 1: economic (i.e., the capacity
to generate income and employment for the sustenance of the population), social (i.e.,
the capacity to ensure conditions of stability, democracy, participation and justice, as
well as the possibility to guarantee conditions of human well-being – security, health,
education – equally distributed to all classes and genders) and environmental (i.e., the
capacity to maintain quality and reproducibility of natural resources).
Fig. 1: Sustainable development
Source: Dréo, Johann (2006), “Sustainable development”
[available at http://commons.wikimedia.org/wiki/File:Sustainable_development.svg]
Based on this representation, it is evident that no system stands alone, and
therefore, to survive, organizations must relate to their own subjective framework and
respect the environment as a set of objects of exchange whose characteristics
influence and are influenced by the behavior of a system (Hall & Fagen, 1956; Capra,
2002). Considering environmental contingencies (Longenecker & Pringle, 1978;
Battilana & Casciaro, 2012; Yamagata, Yang & Galaskiewicz, 2013), organizations are
able to survive in a particular context only if they improve their ability to evolve and
ensure that their operations adopt and adhere to the external changes. Indeed, the
study of open systems involves a homeostatically dynamic adaptation to external
changes, and the survival of a system is directly related to the ability to seek and
promote dynamic and satisfactory evolution (equifinality).
Change to make a value proposition sustainable
As the world is becoming smarter (there is often talk of a smarter planet, Spohrer,
2010), systems must be people-centric, information-driven, and e-oriented to adapt
and mutually satisfy any participant involved within a system, while the community
should encourage and cultivate people to collaborate and innovate (Qiu et al., 2007).
As graphically represented below (see Figure 2), the effective personal perception
by final targets depends on the offer’s capacity to adapt its own solution to the
From ‘EGO’ to ‘ECO’ in B2B relationships
234
emerging changes, with the result being to make the value proposition sustainable
(Schein, 1990), intending the value as the result of a personal perception of quality
proposed and exchanged, while maintaining the appeal over time.
Fig. 2: Change as a driver for adaptation and sustainability
Source: Author’s elaboration
Studies on tectology, which deals with processes and changes with respect to
sustainability, explain that the dynamic element of preservation is the ability of
complex organizations to increase their business by drawing on the resources within
the environment in which they live as the only way to survive. Reacting to the external
changes can complicate the internal relations of a system, thus requiring a change in
the system’s structure to achieve a dynamic equilibrium (Bogdanov,
1988).Accordingly, we speak of the need for resilience, or the ability of a firm to cope
with shocks, to maintain a state of equilibrium over time, and this ability is a
characteristic of those organizations that are able to manage the processes of
evolution and change (Vicari, 1991). With respect to the attitude to respond to specific
needs of the market or to create new ones, the skill to understand the needs is an
intermediate solution that is most likely effective in terms of sustainability. The choice
of an offered value proposition by end-users occurs through a mechanism of purchase
or use (value in use, Vargo & Lusch 2008, 2010, 2011) as it triggers a process of value
Distance
Fitting
Target - t+1Target - t
Solution - t Solution - t+1
Adaptation
From ‘EGO’ to ‘ECO’ in B2B relationships
235
co-creation (Prahalad & Ramaswamy, 2004; Ballantyne & Varey, 2006; Grönroos,
2008) and implies the participation of multiple parties, thus making the value of a
particular offer “effective”(up to that point, it was only “potential”).
Although it is difficult to arrive at an unambiguous definition of the concept of value,
the one proposed herein is based on some known theoretical approaches and
applicative models that have incorporated the most recent instances and advances
related to this category, as shown in Table 2.
Table 2: Deepening value concept
Topic Focus Main authors
Theoretical references
“shared value” Porter & Kramer, 2011
“value co-creation”
Prahalad & Ramaswamy, 2004;
Ballantyne & Varey, 2006;
Grönroos, 2008
“subjective approach to defining
value creation”
Barile & Gatti, 2007
“value in use” Vargo & Lusch, 2008, 2010, 2011
“contextualization and value in
context”
Chandler & Vargo, 2011
Models reflecting
theoretical references
“Value chain and value system” Porter, 1985
value constellation Normann &Ramirez, 1993
Mc Kinsey pentagon framework Grant, 2005
Source: Author’s elaboration
The need to expand the traditional boundaries of the enterprise, to include, within
the processes of value creation, all the different actors involved, leads to the use of an
approach to value that has to be shared (Porter & Kramer, 2011), subjectively defined
(Barile & Gatti, 2007) and context-specific (Chandler & Vargo, 2011). These theoretical
stimuli can be also found in some known practical models (Porter, 1985; Normann &
Ramirez, 1993; Grant, 2005) that reflect this need of inclusion and the positive effects
in terms of value that can derive from it. Starting from these considerations, we
propose a notion of value that, in order to be sustainable, has to consider all the actors
the enterprise comes in contact with, actors that are involved in its value creation
processes in a long-term perspective. This approach seems to acquire more relevance
when referred to B2B relationships, because they imply virtuous dynamics and
interactions that have to be inclusive, in order to share the value propositions that
come from each actor of the chain to achieve a final value proposition that can be
perceived as more valuable.
Being competitive, which implies being preferable compared to similar solutions,
also means improving more than others, often by updating or changing one’s value
From ‘EGO’ to ‘ECO’ in B2B relationships
236
proposition. The result of this consideration, with respect to B2B relations, is that the
competitive behavior is closely correlated with the ability to identify the appropriate
relations, the right channels of communication, and the proper organization of
information flows sufficient to harmonize the internal business development with the
evolution of the surrounding sides (Lovelock & Wirtz, 2007).
Only through a careful consideration of the factors set it is indeed possible for the
actors involved in a B2B relationship to create the conditions in order to develop longterm
relationships, thus making it possible to maximize the value co-production and
the recovery of the costs (not only financial costs) incurred by the understanding and
the adapting to the demands of the context (Blois, 2003).
Synthetically, the actors involved in a B2B relationship must understand the
expectations of the potential partners, in order that the relationship is not limited to
individual exchanges (Naumann, Williams & Khan, 2009) but it is a prerequisite for the
emergence of a system based on the relational model (Barile & Saviano, 2012). To
facilitate this development, each business Actor must operate synergistically to provide
stability and balance to all entities involved (internal or external) and especially to the
system as a whole. The survival, in a B2B relationship, implies the persistence of
identity and then the sustainability of the offer, an aspect that does not exclude
change.
Because the decision-making processes should adhere to logical thinking to
reduce complexity and confusion, we encourage new architectures for information
sharing and new infrastructures to strengthen organizations, calculations and system
performances (Demirkan & Gaul, 2006). In turn, this allows for better management of
complex situations (Barile & Polese, 2011). According to the adopted systems
perspective, sustainable change is critical for fostering closeness between parties in a
B2B relationship and for enabling the emergence of an eco-system in which the
combination of the supplied parts allows an easier resolution to the ventures or
problems imposed by complexity. Indeed, the opportunity to explore the processes
involved in a long-term interaction of a B2B relationship, as well as the structure of a
dynamic system and the expectations of the users, and to identify the ‘complexity of
the eco-system’ (Basole & Rouse, 2008) within which everything is collected, identified
and active, depends on the number of actors well as on the conditional probability that
these actors are involved in the service provision (Barile & Polese, 2010).
According to the VSA, in this regard, the system is made viable (and then able to
survive in the long run) by the behavior that is assumed, including the perspective of
value creation, to be more strategic, more responsive, more adaptive, and more
intelligent. The characterization and optimization of the relations, the re-designing of
organizational configurations, and the management of complexity, are therefore all
elements that identify a successful system, that is, a system that can form stable
relationships within extended networks (Polese, 2004, 2007).To continue in the longterm,
as shown in the highlighted logic, these interconnections must be based on
shared broad principles of sustainability (Polese 2009b; Polese & Minguzzi 2009).
From ‘EGO’ to ‘ECO’ in B2B relationships
237
Sustainability and the VSA
The adoption of a systemic approach to the analysis of business phenomena in
general and of B2B relationships in particular, together with the introduction of the
principles of sustainability, requires a change of perspective that leads to an integrated
analysis of the various instances presented herein. These reflections seem to better
qualify VSA as one of the conceptual framework for the phenomena analyzed herein,
as it overcomes some limits of the viable system model VSM (Beer, 1975), the theory
it takes origin from, as it analyzes both the structural and the systemic aspects of
phenomena contemporarily. The theoretical basis that are considered useful to a
better definition of what proposed herein originate from VSA considerations of the
complexity of systems and the management of the systems, of the need for the
simultaneous observation of phenomena both from structural and a systemic
perspective, and of the consequences of interpreting these dimensions in terms of the
organization’s behavior. Therefore, according to the VSA, each system can be
observed through a static analysis of its structure and, if activated in a dynamic way,
can evolve as a consequence of improvements in knowledge (technicalities),
operational experiences (practicalities), skills (abilities) and iterations (even
unknowingly). Accordingly, changes to both the structure and the system itself can be
induced. For this reason, it is important to understand what leverages can be
considered to facilitate the development and implementation of a synergy that will
ensure the viability and the survival of the system.
Under VSA the interpretive perspectives change. The main aspects we can use for
the investigation of organizations’ behavior may be defined according to three different
points of view; then we focus on a “structural” (i), “behavioral” (ii) and “systems” (iii)
perspective. The first one (i) deepens the relevance of roles, rules and constraints of
sub-elements operating and interacting within the same system, taking into account
the possible contingences deriving from the outside; the second (ii) focuses on the
interpretation of relationships between systems’ parts affecting their actions
reciprocally, especially in terms of personal categorical values, routines and
interpretation schemes; the third (iii) is about the influences coming from the
connections of different levels characterizing the eco-system as a whole, in particular
referring to the consonance/resonance between themselves and highlighting their real
chances to survive (making their actions sustainable) in the long run.
To further clarify the assumptions and conclusions drawn thus far, we follow the
major reflections of the VSA scholars (Golinelli, 2010; Barile, 2008, 2009) and
summarize the methodological approach as follows:
From ‘EGO’ to ‘ECO’ in B2B relationships
238
Table 3: Different perspective in VSA
From a structural
Perspective
From a behavioral
perspective
From a systems
perspective
The structure of an organization
originates from a given set of
shared rules and relational
connections.
Visible skills are a result of the
inherent capabilities.
A viable system lives and its goal
is to survive in an environment
populated by other viable systems.
The system ‘realizes’ the
structure and the relationship
qualifies both of them.
From the same relation
originate more interactions,
respecting the same distinction
between function and role in
the moment in which the
second can express the first.
Each context is subjectively
defined and extracted by a general
environment by each viable
system’s decision-making body,
and in it the system is immersed
adaptively.
The structure aims to survive in
function of various systems
associated with it, even if not at
the same time for each of them.
Education is the form, the
routine determines that the act
is substance.
Each viable system distinguishes
and identifies the various suprasystems
relevant in its context,
because of its specific end goal.
The contexts are subjective as a
function of specific objectives
and changing.
The rule is the application of a
law, and determines how often
the rule itself can also change,
if considered to be positive.
A viable system has the ability to
regulate and manage
independently the dynamics of its
adjustment.
Contingency is influence,
planning is critical, their
composition is relevant.
The categorical values form the
basis for a personal
interpretation of the events.
The convergence of the systems
and its entities of reference
towards a same point starting from
different starting positions is
defined consonance (synthesis of
compatibility, tune, affinity, etc.)
and the variation of the gradient of
this displacement vector (with a
defined direction and verse)
represents its measurement.
The supra-systems are capable
to influence the decisions of a
system, in particular in direct
effects on its own sub-systems.
The interpretation schemes
shape the information and
categories establish their
priorities.
The acceleration (wanted) of this
relation between (among) two (o
more) elements is resonance
(defined as the modification of
consonance trough times).
The choices represent the
realization of the decisions as a
result of the action of the
interpretation scheme.
The viability is commensurate with
the realization of the dispositions
to change.
Source: Author’s elaboration
Referring to the cited literature for an in-depth analysis, we concentrate on the
notions relevant in Table 3. The first concept to be explored is information variety, as
the VSA proposes a substantial equivalence (isomorphism) between information
variety and a viable system. Information variety constitutes the specific endowment of
a viable system and consists of three elements: categorical values, interpretation
schemes and information units.
From ‘EGO’ to ‘ECO’ in B2B relationships
239
The information units are the outer layer of the information variety and express the
«structural composition of knowledge» (Barile, 2009:70). As such, they represent
anything that is perceived by the viable system from its specific context of reference
(i.e., the data outside the system that, via computing processes, become information).
Interpretation schemes are the forms of knowledge (Barile, 2009:74), in that they
represent the way in which information units are filtered and transformed into
information. The categorical values represent a system’s strong beliefs and set of
values that guide it in its decision-making processes. As such, they must be
considered as they constitute «the resistance that the possessed knowledge opposes
to change» (Barile, 2009:78), and they represent the subjective filter regarding the
acceptance of events or facts.
The concept of information variety, understood as a compendium that consists of
categorical values, interpretation schemes and information units, allows the reference
of two other fundamental concepts, consonance and resonance, for the understanding
of the dynamics of decision-making and the behavioral processes of the systems. As
presented in the third column of Table 3, a system is viable when pursuing the aim of
systemic survival. This ultimate purpose is comprised of several objectives that
reference particular activities that are linked to partial results. To achieve its purpose of
survival, each system extracts from the general environment its specific context.
Within this context, it identifies the relevant entities (supra-systems) with which the
system establishes relationships of consonance and, in the future, the development of
resonance, thus obtaining the identification of decisions shared and accepted within
the reference context. The centrality of these concepts, with particular reference to the
contextualization process and the consequent definition of shared objectives, is
fundamental in the definition of the entities as they relate to the pursuit of the systemic
purposes. Therefore, information variety acts in the subjective extraction of the context
of reference and in establishing relationships (subsequent interactions in the dynamics
of the system) between the involved actors. All of this affects the analysis of complex
phenomena and the design of (complex) service systems that operate in complex
environments, and furthermore, it is all declinable in different fields of application
(Barile et al., 2013b), and considerably so in a complex service ecosystem.
The importance of the contribution of the VSA concepts to the definition of
sustainable B2B relationships leads us to better define sustainability. According to the
shared definition, sustainability addresses the simultaneous consideration of the
economic, social and environmental dimensions. This tripartite approach is often
referred to as the ‘triple bottom line’ (Elkington, 1997); that is, the consideration of the
existing tight relationship among profit (economic dimension), planet (environment
protection) and people (social equity) and the need to include these issues in business
behaviors and decision-making processes. The theoretical and practical debate on
whether businesses have (Bowen, 1953; Bell, 1978; Carroll, 1979, 1991) or do not
have (Friedman, 1962; Ladd, 1970) responsibilities that go beyond the economic
dimension is ongoing in the literature. We make reference to the systemic perspective
that wants to ‘open the borders’ to include examples that can qualify ecosystems. This
approach (Meadows et al., 1972) is particularly coherent with the VSA, as it proposes
From ‘EGO’ to ‘ECO’ in B2B relationships
240
an integration and interrelation of different perspectives that, only when simultaneously
considered, can define a sustainable set of relationships and activate sustainable
interactions, thus enhancing the viability of the system and acting on the success of its
survival.
The goal of sustainability for the viable firm is certainly an articulated challenge for
the governing body, that is, the decision-maker. Combining the purpose of survival
with a philosophy of governance for sustainability requires that certain fundamental
concepts, as well as the interactions and dynamics of the system, be defined and
clarified. In order to evaluate the actions of the firm, in accordance with the
contemporary observation of both structural and systemic dimensions of phenomena,
it is possible to add to the traditional dimensions of valuation (efficiency and
effectiveness) the dimension of sustainability and to define the relationship that exists
among these three concepts (Saviano et al., 2010):
 Efficiency is defined as the ability of the system to reach a goal by optimizing the
used resources; therefore, it favors a short-term perspective that is specifically
oriented to a specific process.
 Effectiveness concerns the actual capacity of the viable system to achieve the
objectives; unlike efficiency, it is based on a more extended perspective that
includes the entire context of the reference and refers to the strategies
implemented.
 Sustainability is the dimension that concerns the environment in general, and as
such, it is related to the purposes underlying the government decisions and is a
measure of the overall comprehensive activity.
Although herein we propose an extension of the traditional measures of valuation
of corporate actions to the consideration of sustainability, it is clear that the three
dimensions have different nature and importance. In fact, effectiveness implies
efficiency and sustainability implies effectiveness and, consequently, efficiency. The
basis on which this tripartite division rests is, in fact, the economic dimension; without
compliance with the minimum conditions of efficiency in the short term, in fact, there
may not be effectiveness in achieving the objectives or sustainability of the value
propositions in the long term.
In Figure 3, the traditional tripartite division of sustainability dimensions, as
represented in Figure 1, is reconsidered in light of the considerations presented and
discussed herein.
For the sake of simplicity, we reference the dynamics of the emergence of viable
systems. Efficiency relates to the lowest level of connectability in that it recalls, in
essence, the simple structural coupling according to which a set of elements is
configured as undefined.
From ‘EGO’ to ‘ECO’ in B2B relationships
241
Fig. 3: The Viable Systems Cycle
Source: Author’s elaboration from Barile, 2012.
The efficacy, however, is at the level of consonance. Therefore, it correlates to the
relatedness, which is understood as the potentiality that the elements identified in the
previous phase can actually be connected among themselves in relation to a specific
purpose or a specific context.
The last level is that of sustainability. Sustainability is realized at the systemic level,
that is, when the relations identified before are activated in the systemic dynamics and
thus become interactions that qualify the resonance.
Figure 3 depicts the above explanation by integrating the emersion of the viable
system with the three elements – efficiency, effectiveness, and sustainability. This
representation shows that the considered dimensions cannot be regarded as
alternatives or as antithetical constructs but must rather be viewed as necessary
elements to the simultaneous existence of each other. What is relevant for the
determination of each of dimension is the subjective perspective that is adopted. For
sustainability, which is a broader and more inclusive dimension than the others, to be
adopted, it is necessary that the point of observation does not discount any of the
single actors because the system is intended as a whole and must be perceived as
such to examine business phenomena and its dynamics in their totality.
The cycle presented in Figure 3 highlights how a company extracts a frame of
reference on the basis of specific relations of consonance from the general
From ‘EGO’ to ‘ECO’ in B2B relationships
242
environment, and the company defines its competitive portion within which it identifies
the various entities and their specific demands.
The conditions that determine the qualification of a viable firm and its performance
measures are expressed in terms of efficiency and are concerned with the actual
processes. The evaluation at the context level assesses the effectiveness of the firm
and identifies different measurement models that include efficiency to ensure that
management reflects the basic economic requirements. The last level identified
addresses environmental and social findings. Accordingly, this level includes those
issues that, while not directly part of the specific context, affect the ability of the firm to
remain viable because they are directly related to the development of the resonance.
Even in this case, what is important is the perspective of the observation, which, in
the case of companies, is the perspective of the governing body. «The look of the
governing body, in fact, that moves by observing the environment and then
progressively tightens the focus on the context up to the structure of the governed
system and related components, must constantly consider the environment to monitor
emerging issues for the purposes of maintaining over time the conditions of viability
that reverberate on the company as well as on all the actors in its context. In this
perspective, sustainability becomes the general paradigm of reference in a vision,
directly linked to the VSA principles, that lead to it being perceived as an important
dimension of the conditions of viability of the system» (Barile et al., 2013a:40).
From EGO to ECO
«Nothing happens in isolation» (Barabasi, 2002), in accordance with the accredited
concept of “embeddedness” (Granovetter, 1985). Therefore, as every economic actor
cannot be considered outside of its context, one must recall that «life consists of a
network of relationships in which we interact» (Capra, 1997:14) and that «life is a
network of relations, and so is business» (Gummesson, 2005:326). You change
because you are part of a larger and interrelated system, a sort of ecosystem, in
which you live and operate, which suggests that you react to your actions and expect
decisions to modify previous decisions to create a different future in accordance with
the logic of co-evolution.
Figure 4 refers to the evolutionary path that we want to trace using the
methodological paradigm of the VSA and the concepts developed in the previous
paragraph. Because this approach emphasizes the strong role of the observer in the
analysis and definition of phenomena, the reported elements must be understood to
be simultaneously present in a phenomenon, which can be observed from different
perspectives. Accordingly, the attention is focused on the structure-system dichotomy
(Barile & Saviano, 2011a), which is intended as a general interpretation scheme. The
VSA emphasizes the whole rather than the individual elements because an analysis of
single elements, though still considered, is perceived as a reconstruction of the whole
that takes into account the principle of interaction, which serves as the foundation for
the internal and external relations of the system. Starting with Figure 1, we read this
From ‘EGO’ to ‘ECO’ in B2B relationships
243
representation in its dual dimension, that is, structurally or statically, and systemically
or dynamically. This change of venue is rich in implications as it extends beyond the
notion of connection and introduces the relations and interactions among actors. With
respect to interactions, we define an interactive dynamism that goes beyond the
physical exchange. The focus at the systemic level can thus explain the dynamics of
the interactions, thereby overcoming a typically analytical-reductionist logic in favor of
a holistic view when analyzing business phenomena.
Fig. 4: The evolution of the ‘Es’
Source: Author’s elaboration
As previously reported, the consolidated approach to sustainability includes a
number of considerations that arise from adopting a systemic paradigm.
If you represent reality as a set of contexts, each of which is anthropomorphically
defined and, therefore, is always evolving, the definition and representation of
sustainability are not intended as a consequence of a cause-effect mechanism. The
interaction of the three elements identified must achieve a sustainable intersection that
is configured as certain and, therefore, is theoretically obtainable by anyone. However,
the interpretation herein proposed goes beyond the consideration of the sum of the
dimensions identified and focuses on the virtuous dynamic interaction that is derived
from the dimensions. This step involves the abandonment of a vision oriented on the
individual parts in favor of one that takes into account the combination of the parties
themselves and how these parties arise in connection with the subjective element that
observes and composes them. In fact, the information variety that determines and
inspires the guidelines for responsible and sustainable government processes is
extremely important. Therefore, the adoption of these guidelines within the dynamics
of the business at the level of the individual assumes that there is a strong similarity, or
Eco-systemsinteractions
Ecology relations
Environmentconnections
Elements activities
Theevolution of the “Es”
From ‘EGO’ to ‘ECO’ in B2B relationships
244
consonance, among the actors. Accordingly, it is evident that the systemic vocation of
sustainability is a key indicator of the interactions that develop between the enterprise
intended as a viable system and the other viable systems that populate the specific
context of the enterprise (Barile et al., 2013b).
As displayed in Figure 4, the evolution of the “Es” can be better explained by
referencing the previously mentioned process of contextualization as it determines the
extraction of a portion of the general environment that is “anthropomorphically
determined” by the decision-maker. However, because sustainability is a dimension
derived from the simultaneous presence of the other dimensions, it is necessary that
the others interact while still having the survival of the firm as a viable system as an
ultimate goal. The necessity of considering the observational perspective clearly
emerges from the representation of Figure 4 in which there is the simultaneous
presence of both structural and systemic dimensions, both of which must be analyzed
contemporarily rather than antithetically. The focus on interactions at the systemic
level is a useful concept for explaining the dynamics of evolution and adaptive change
over time. Accordingly, such a concepts allows for the analysis of the dynamics of the
enterprise and considers the conditions of survival from a perspective that takes into
account guidelines that promote sustainable interactions that guarantee the survival of
the system. The ability to change its behavior as a function of the external changes
enables an organization to adapt more effectively, thus fueling the chances of survival
in the long run and helping to make its value proposition more sustainable. The
analysis, as it relates to the dynamics of B2B relationships (Xiao et al., 2013;
Jaaskelainen, Kortelainen & Hinkkanen, 2013; Johnson, 2013), allows the
relationships to be ‘re-read’ with new theoretical and practical stimuli, as presented in
the following paragraph.
‘Re-reading’ Sustainability of B2B relationships through VSA
According to the VSA, in general, the action (intended as the material execution of a
deliberate choice) strictly depends on the effective understanding of a given
phenomenon, and especially depends on the ability to apply a cognitive method
established for the interpretation of events through the internal/external dichotomy
(Barile & Saviano, 2011). Thus, the ability to analyze facts, attitudes, relationships
(even if B2B ones or other kind) and people is linked to the ability to imagine the ecosystem
that surrounds us as something that is inevitably integrated as a fundamental
part of each actor’s life.
Only through this perspective is it possible to understand why even small nuances,
usually seemingly minor or insignificant, can produce a paradigm shift in the
environmental conditions that may invalidate any source of business strategy,
especially those strategies that are initially considered successful under different
environmental conditions (Boulding, 1956; Ackoff, 1976; Bowler, 1981; Banathy,
1996). To properly coordinate the coveted equilibrium at a systemic level, the strategic
decision makers of any organization must understand how to share opportunities and
resources among all the parts of the eco-system to ensure the satisfaction of each of
From ‘EGO’ to ‘ECO’ in B2B relationships
245
them in terms of value. The value is in together. According to this logic, it is no longer
essential to qualify the operators (Actors) involved, and the distinction between
provider, operator or customer becomes almost irrelevant because the focus is on the
business relationships, on the collaboration, and on the achievement of mutual
satisfaction. It is needed to understand, concisely, that the relationships (of any kind)
manifest their full potential value only if properly “grown” over time and, in this
perspective, sustainability is the “instrument” that makes it possible to profitably keep
the relationship in time (Hakansson & Snehota, 1995, 2002).
In light of the VSA principles, it is possible to analyze viability traits, deepening the
concepts of homeostasis, openness, self-regulation, autopoiesis and equifinality as
well as their effects on business behavior insofar as they stimulate resource
availability, system connections, consonance and resonance, and viability. Based on
the VSA, looking at the changes in firm performance when environmental
contingencies occur, we can see that firms are able to survive in a particular context
only if they improve their capacity to evolve and to make operations that are adherent
to the external changes. To put it in greater detail, the VSA contributes to a new way of
directing and managing inter-firm relationships, strengthening the possibilities and the
qualities of systems’ evolutions by focusing upon smart, adaptive and proactive
behavior. Thus, to improve firm competitiveness and system relationships, we must
look for dynamic models based on multi-criteria decisions supporting systems, that are
capable of reaching satisfactory outcomes for decision makers as they search for
continuous feedback on production processes to align their traits with consumers’
needs, considering the influence of the critical resource owners (supra-systems) and
the relevance of sense-making (Weick, 1995) as crucial for context comprehension
and for consequent system actions that create satisfactory processes with the
stakeholders that own critical resources (Barile, 2009). From this perspective, it is
interesting how overcoming the B2B, B2C or C2C logic leads us to more carefully
analyze the characteristics and advantages of the connections, as suggested in some
recent advances of service research with respect to A2A relations (Wieland et al.,
2012; Polese et al., 2012; Carrubbo et al., 2012). This overrun is exceeded if we
review, through the lens of sustainable development, all of the economic relations that
guide the economic system towards a model of functional service that reflect circular
economic logic (see Figure 5) in which the use of resources is based on the principles
of effectiveness and efficiency (Huxley, 1953).
From ‘EGO’ to ‘ECO’ in B2B relationships
246
Fig. 5:Towards the circular economy
Source: Author’s elaboration from McKinsey (2012), “Towards the circular economy”,
[available at www.thecirculareconomy.org]
This model stands in contrast to the traditional model, defined as linear, in which
resources are used in a unidirectional succession of extraction - production consumption
in which there is a huge loss of value as well as negative effects on the
entire material chain. On the contrary, an industrial circular model is proposed to
replace the concept of ‘planned obsolescence’ (end-of-life) and prevent it from
intervening in the supply chain, thus ensuring that the processes of design, production,
disposal and recovery are in a position to protect the interests of all constituent parts of
the eco-system.
The concept of circularity is particularly significant from our perspective because it
is based on virtuous interactive processes that involve the entire company and, in a
broader view, the supply chain as a whole. Thereby, it implies that the performance
resulting from the eco-system can better meet the economic and sustainable
expectations of those who are currently involved as well as those who will be involved
in the future.
Managerial and Practical Implications
The logic of change and the concept of sustainability affect hardly actions and plans of
managers and practitioners for a lot of organizations in every field. The possibility to
make sustainable their value propositions led organizations (and their government) to
re-think and improve their own operations in a feasible way; today the systems
thinking helps us to interpret and manage nowadays business processes, fostering
strategies and policies with the aim to increase the performance evaluation and the
From ‘EGO’ to ‘ECO’ in B2B relationships
247
quality perception. The focus of the “ECO” point of view is useful to valorize the
relationship with supplier, customer and any other stakeholder (or Actor) surrounding,
in the attempt to obtain some advantages from the resource and information sharing
and catching the same final goal in terms of survival, with the consequence to highlight
the relevance of co-creation processes and to promote the win-win logic.
Having said that, there are a number of implications for the B2B relationships as
well, because of the common interest of several Actors to do something better
together, regarding their multi-contributions to the same value proposition; that is
applicable to the sectors of healthcare, tourism, transportation, energy grids, ICT,
education and many others. Today everything could be related to the systems
perspective and to the possibility to operate as a system, in a systems context; then
the adaptation to the external changes and the ability to re-configure oneself to survive
over time represent the main aspects in each sector we should study, and this implies
the need to develop the fitting governance models, with many effects for the
operations and behaviors of each organization involved.
Conclusions
Ultimately, you change, adapt and try to anticipate the changes of a specific context
because it is based on a logic that cannot provide for the maintenance of an unaltered
variety. This is not intended as stasis or as the preservation of the status quo over
time. Even without clear signals that determine corrective or innovative actions, the
intrinsic pro-activity that drives, even unknowingly, entrepreneurial action and that has
always been based on the same principle of doing business, reflects the dynamic
nature of the real modern behavior.
Over time, increasingly more organizations will be able to reconfigure themselves,
and businesses will be increasingly more able to reformulate and re-organize their
assets, enabling them to maintain a stable and sustainable equilibrium over time.
Future reflections on sustainability will then have to adopt a holistic approach that
takes into account the instances of all parties whose interests, both tangible and
intangible, are in some way influenced by or influence the activity of the specific
enterprise. The concept of context, determined on the basis of the governing body’s
information variety and elected field of action, implies that the value created and
spread by the enterprise is the result of the simultaneous fulfillment of economic,
social and environmental objectives.
The relational perspective, combined with the concept of circularity, focuses on
analysis at the process (i.e., systemic) level, and thus analyzes phenomena during the
dynamics of development. In this sense, the focus is on achieving a mean vector as an
expression of the level of satisfaction and the balancing of different instances whereby
the expression of different dimensions must be traced to the average value so that the
value created is sustainable.
From ‘EGO’ to ‘ECO’ in B2B relationships
248
In looking toward the future, the challenge to direct the activities of the governing
body will involve balancing the needs of a varied and wide range of subjects, including
future generations, with a constant eye on economic constraints. Reviewing issues
already presented in the literature, according to which «Profits, no matter how large,
can never reach a level sufficiently high to satisfy the economic agent» (Bell, 1978),
the transition from an egonomy to an economy will have to consider the social and
environmental responsibilities of individuals because such a transition will significantly
affect their existence. Furthermore, businesses, which represent the most complete
form of organization for those individuals who exercise their social role, will also bear a
strong responsibility to protect these environments.
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