Lightweight Electric/Hybrid Vehicle Design

Introduction xxiii
Analysts usually consider solidarity, altruism, reciprocity and trust when examining networks
in general. Solidarity is largely brought about by sharing of common experience; so social class
and economic position layers are sometimes seen as having solidarity as do family and ethnic
groupings. With altruism, of course, people help each other without thought of gain. Because it is
rare in most societies, rewards and penalties for actions tend to exist in its absence. Repeat
commitment to a network is expressed as loyalty and individuals often react to disturbance either
by ‘exit’, ‘voice’ (try and change things for better) or ‘loyalty’. The latter may be expressed as
‘symbolic relations’ in which an individual is prepared to do his duty and meet his obligations.
‘Voice’ is important in the organization of networks as it involves argument, debate and persuasion,
which is often fundamental to the direction taken by small to medium sized groups. Another
stabilizing coordination is the reciprocity with which symmetry is maintained between giving and
receiving. Of all the attributes, trust plays a central organizing role; essential if not all members
behave absolutely honestly. Individuals bet against the opportunistic behaviour of others according
to their reputations. Networks are often ‘flat’ organizations in the sense of having equality of
membership. There is an underlying tendency for individuals to become involved with cooperative
solidarity, if only because of the higher cost of not cooperating. Generally trust is built up over a
period of recognizing and evaluating signals from other actors and having opportunities to test
interpretations, over a rule-learning period, which leads to eventual solidification of mutual interest.
A study of French subcontracting companies to the engineering sector in the Lyons area, between
1975 and 1985, has shown that network coordination has improved performance relative to larger
firms during that period, often becoming dynamic investors in flexible CNC machine tools.
Essentially small firms benefited from large forms farming out some of their activities because
they could not run flexible machines long enough to amortize the capital cost. But this was only
the trigger and the firms later found the network of cooperation brought them trading advantages
way beyond those available in a classic market. Recent economics approaches have dealt with
transaction costs as a means of examining social ties between traders and such analysis involves
the organizational implications of the transaction cost. Trust can lubricate the friction behind such
costs. In the French study the small subcontractors were mainly supplying large engineering
companies in the capital goods sector involved in large, complex, customized and expensive
products for which client firms were unable to forecast requirements beyond a period of six months.
Employees of the subcontracting firms undergo periods of training in the assembly shops of the
client and the client firm becomes an expert in the engineering processes of the subcontractor so
that mutual understanding can be built. Each subcontractor takes orders from one client of not
more than 10–15% of total sales and the clients put themselves in the position of the subcontractors
in determining optimal level of orders. The relatively low percentage figure allows the client a
degree of flexibility without undermining the viability of the subcontractor. A ‘partnership’ exists
in that in exchange for improved performance on quality and delivery the client firm guarantees a
level of work for the subcontractor. Any defection of a subcontractor is made known to the whole
community of suppliers and the full penalty has to be made for non-delivery, so that trustworthiness
is not just judged by reputation; the long-term message from the experience was that ‘trust is
expedient’.
Other examples show that large companies often tend to divest themselves of activities to the
extent that they become essentially ‘systems integrators’ among a specialized consortia of companies
in the particular manufacturing environment. Quoted examples are Fiat, BMW and Volkswagen.
This breaking up of vertical integration may involve affiliated organizations or separate suppliers,
with many aspects of R&D and design being divested to systems suppliers. Relationships between
sub-units are too delicate to be left to market-type arrangements in this ‘associationalist’ way of
working.