An Integrated Economic Sociology Approach to Market-as-Network: The Example of a Shared Business Environment between Norway and China

Abstract

This study applies an economic sociology perspective in exploring the importance of cultural embeddedness of firm economic activities across borders. The findings are data driven and uses the seafood trade and its shared business environments between Norway and China as case example. The empirical findings of this study show that market-as-network, and actor-to-actor interrelationships will become increasingly important in forming resilient business networks. It also illustrates how economic sociology can provide a holistic framework of analysis in studying cultural embeddedness.

Keywords:

• China
• cultural sensitivity
• economic sociology
• market-as-network
• Norway
• seafood

Subject classification codes:

• D21
• M14
• M31
• Z13

Introduction

In the past decades, the convergence of several technological platforms has allowed for an increase in the ease of socio-economic transactions. Advancements in communication and logistic infrastructure have also encouraged the creation of smarter value chains and cross-border East to West business networks that complement business-to-business (B2B) as well as business-to-consumer (B2C) transactions. Within the literature and scholastic debate on cross-border economic transactions and activities, and international business (IB) studies, what has been consistently highlighted as a challenge is a deeper understanding of how firm activities are influenced by the extent of social embeddedness (Li, Worm, and Xie 2018; Mandják and Szántó 2010). How social relations affect firm behavior and to which extent economic action is rooted in structures of social relations are classic questions of social theory (Granovetter 1985, 2005). Studies have shown that firms that are culturally sensitive have a competitive edge because they are able to build resilient business networks through strong interpersonal relationships (Currant 2004; Fang 2012; Hofstede 2002; Hofstede 2015; Tixier 1996). Taking the example of the Norwegian seafood industry and its business interrelations and trade with China, this study explores how Norwegian and Chinese actors build a deeper understanding of cultural sensitivity through their shared business environments. The purpose of this study is to illustrate via a five dimensions framework, how social relations and the social embeddedness of a firm can contribute to creating more resilient East-West business networks.

The working assumption in this study, is that cultural sensitivity and the understanding of the dynamics of social embeddedness in economic activities will become increasingly important to build robust business networks across borders. Using an economic sociology perspective, the main research question addressed in this study is:

RQ: What aspects of firm social embeddedness can be identified that contributes to the creation of stronger market networks, and resilient business environments?

The research question is one that is contemporary and relevant to the business context between Norway and China. Norway is the second largest seafood exporter in the world and the seafood export has a long and important tradition. More than 95% of the Norwegian seafood production and catch is being exported to more than 140 different markets reaching an export value of more than 105 billion NOK (Johansen et al. 2019). Norway and China enjoy a prosperous seafood trade, and maintaining a portfolio of markets is important to reduce risk and keep prices competitive (Braathen 2018). Around 85–90 per cent of Norwegian imports into China are processed and reexported (The Norwegian Seafood Council 2019). Still, China has a strong domestic market with 1.4 billion people and its growing economy has been the center of attention for many foreign countries for investment and export, where the demand for seafood in China remains high (Braathen 2019; UNCTAD 2020).

Considering the increasing economic activities between Norway and China, this study focuses on the firm as the unit of analysis in the seafood industry. In collecting data, we approached and interviewed seafood supply network actors and stakeholders from Norway and China. Through the theoretical vantage point of economic sociology, social interactions and business interrelationships were studied to identify strategic patterns of business network building between the two countries.

The paper is organized as follows. The following section gives a brief state-of-the-art literature about economic sociology in the field of International Business. Section 3 describes the methodology employed for this study and highlights the corpus-driven or respondent driven salient themes uncovered during our interviews. Section 4 contains the analysis and discussion of findings in relation to the framework of economic sociology and the main research question raised for this study. Section 5 gives the concluding remarks, limitations to this study as well as future research directions.

Literature review

The study of economics with a sociological focus dates back to the 1930s, with seed ideas from Marx and Weber (Granovetter 1985). Marx focused on the dialectical relationship between social classes as actors and drivers of the dynamics of social change, and Weber considered the relationship between economic and social forces as mutually conditioning in the context of cultural and motivational significance (Martinelli and Smelser 1990). New ways of thinking about theory of markets with sociological foundations were however, introduced in the late 1980s (Harrison and Kjellberg 2014). Theoretical threads that combined the disciplines of economics and sociology evolved into the field of economic sociology (Smelser and Swedberg 1994; Swedberg 1998). Economic activity in any market was viewed as a form of dialogically embedded social interaction (Baker 1990; Frenzen and Nakamoto 1993; Uzzi 1997).

In the past decades, the term ‘market’ has been used in the field of IB studies in reference to a wide range of academic research interests, from firm behavior and positioning strategies (Iyer et al. 2019), free trade and market access (Ju and Krishna 2005), marketplaces and design of marketplaces (Roth 2018), as well as information on trade prices (Guzmán et al. 2020). Markets have also been studied as patterns of network of exchange relationships (Johanson and Vahlne 2011; K. Mason and Mouzas 2012) with organization matrix influence of firm capability and resource availability. The perspective of ‘market as network’, grounded in the context of the business environment (Barnard 2010; Hilmersson and Johanson 2016) seems to align itself with the perspective of economic sociology. Far from being a homogenous entity, markets are constructed heterogeneous arenas of economic transactions (Harrison and Kjellberg 2010). They vary in cultural contexts, stakeholders, participating actors and their interrelationships (Hofstede 2015; Kjellberg and Helgesson 2006). In classical approaches to the study of economic transactions and markets, challenges arise in the holistic understanding of markets when macroeconometrics are abstracted and modeled to primarily market supply and demand (Allaire 2010; Beenstock, Lavi, and Offenbacher 1994).

Bringing a product to market requires cultural sensitivity (Voldnes and Grønhaug 2015; Voldnes and Kvalvik 2017) and the ability of the firm to take advantage of its cultural knowledge of the local market and be ambidextrous in their approach, balancing market exploration and exploitation (Vahlne and Jonsson 2017). The success of e-commerce sales for example, is intricately linked to social interaction behavior (Shaltoni 2017). This subject has drawn increasing scholastic interest as consumers can experience many global products at their desktops or via their mobile phones in their own native languages (Bilgihan 2016; Gong, Stump, and Maddox 2013). China for example, has one of the globe’s fastest growing online retail market and digital economies with a projected 1.14 billion internet population by 2025 (Thomala 2020). While new consumer demographics and behavior present fresh market opportunities, the evolving business relations and economic activities between Norway and China, will present challenges for market entry strategies (Johanson and Vahlne 2015).

In the context of evolving business environments, economic sociology is useful because it enables relativity in perspectives. Layers of heterogeneity within the seemingly homogeneous fabric of national cultures are acknowledged as naturally occurring irregularities of human and firm behavior (Stoltz 2018; Vahlne, Hamberg, and Schweizer 2017). The acknowledgement of heterogeneity in socially embedded economic activities implies too, that some economic activities might occur in a “dis-embedded” manner (Granovetter 1985; Stoltz 2018). In such an instance, actors in a social and business network analysis might arrive at a site of economic activity and be quite successful without having any prior specific connections with any other actor at that site. Martin (2009, 2015) refers to such a phenomena as occurring as an exchange in a forum where actors do not develop long-term connections beyond that encounter, and that they are not structurally embedded within that site, such that the economic transactions take place without any predisposed actor favoritism.

In Granovetter’s (1985) foundational work on embeddedness, it was explained that embeddedness comes about as a process between social action reciprocity and structures. Granovetter distinguishes between structural and relational embeddedness. Structural embeddedness refers to all bilateral economic relationships whilst at the same time being part of a comprehensive social network of connections. Relational embeddedness refers to the means by which economic actors leverage personal relationship networks (Granovetter 2005).

Economic sociological theories of market within the International Business and Marketing disciplines include firm internationalization models, markets-as-networks, marketing management on the demand side and service-dominant logic (SDL) (Harrison and Kjellberg 2010; Kjellberg and Helgesson 2006). Table 1 is adapted from Harrison and Kjellberg (2014) and includes the authors’ interpretation and understanding of market theories in the context of the field of International Business, where the traditional industrial marketing and purchase theory has laid partial foundation to theories of firm internationalization (Cordeiro 2019; Gebert Persson, Mattsson, and Öberg 2015; Vahlne and Johanson 2013, 2020).

Table 1. Market theories from the disciplines of International Business (IB) and Marketing that illustrate alignment with economic sociology, adapted from Harrison and Kjellberg (2014).

Theoretical approach	Assumptions	Definitions	Concepts (i.e. what about)	Conceptual relations (i.e. how and why)	Theoretical applications in context
Firm internationalization (markets-as-networks)	Interaction and interdependence Resource heterogeneity Matrix influence of firm capability, resource availability and business environment context Dyadic structures as actors Psychic distance of actors / stakeholders between business environments Time as contextual element	Market as patterns and network of exchange relationships	Relationships contingent on Time and business environment Firm resource, capability, actors and activities Organization network	Activity–Resource–Actor (ARA) interaction model for business relationship. Eight economic sociology concepts are identified: embeddedness, networks, institutions, power, social capital, identity, social structures and cognition.	Closeness of relationship Structure of networks Degree of dependence Firm internationalization, born-global companies and subsidiary studies
Marketing management	Business environment targeting same customer segment with similar product offering Demand-side focus Markets and industries are not synonymous	Markets are defined as meeting place for sellers and buyers Product markets, geographical markets and customer-need based markets are differentiated Multi-dimensional concept made up to technology, function and customer group	Market structure, boundaries and behavior Market driven orientation Customer needs, preferences and wants Market segmentation Product differentiation	Market structures shaped via product-market strategies Firm market behavior Bottom-up or top-down mapping of markets and market segments	Extent of market orientation by different firms/markets Relationship marketing Segmented market spaces Product-market strategies development
Service-dominant-logic (SDL)	Actors are resource integrators Resource heterogeneity Value is co-created Co-creation as process Value is unique, idiosyncratic and context dependent B2B and B2C processes are collapsed into A2A (actor to actor) Users define value Exchange takes place in networks	Service-centered theory of markets System view of markets From ‘market to’ to ‘market with’	Users and providers Resources provide services through integration Value-in-use Network service system, service ecosystem Resource integrators Operant and operand resources 8 foundational premises	Users co-create value with providers through relational processes of offer-making in networks and systems of value creation	Empirical work is recent, and underdeveloped Marketing strategies need to be closely connected to customer use and design Service system resource types

In the context of the case example of this study, within the field of International Business, scholars have further identified five dimensions that can influence the evolution of the global food business environments (Phyne et al. 2016), including that of the seafood industry, and its shared business environments between Norway and China. The global food economy will be increasingly characterized by quality consumerism and the rise of organic foods (Goodman 2003; Kjeldsen, Deleuran, and Noe 2013). The five dimensions in the following sections highlight the potential advantages of focusing on cross-border interrelationships and market-as-network (Anderson, Asche, and Garlock 2018; Phyne et al. 2016)

The five dimensions framework that characterizes the global food market-as-networks

The consolidated extant literature in International Business have broadly identified five prominent characteristics of an evolving food supply network (Fang and Tan 2013; Lindgreen et al. 2017; Touzard, Chiffoleau, and Maffezzoli 2016) that include:

1. Geographical proximity refers to the economic geography benefits of and importance of the location of the seafood production in nearness to consumers, cities, and harbors. As seafood is highly perishable, the proximity of production to dining table is important for market access. Depending on distance to the market, producers will specialize or cater their product to the market needs. This body of research in the past decade has also turned toward the consideration of the broader ecology of the business environment and cultural heritage. Scholars have argued that seafood production coupled with the activity of culinary tourism (Ab Karim and Chi 2010; Mason and Paggiaro 2012; Smith and Xiao 2008) can help ensure heritage preservation and conservation of valuable maritime and coastal landscapes.

2. Relational proximity refers to the contrasting effects of face-to-face interaction between seafood producers and end consumers. Implicit in this dimension is how the number of intermediaries between seafood producers and market consumers might affect how the seafood is perceived on the market when purchased. As the consumption of seafood is experiential, personal experiences can be created in a face-to-face purchase directly from the producers. Although more convenient, “anonymous” customer experiences are created for consumers when seafood is sold at supermarkets in global value chains (Dunne et al. 2011; van Herpen, van Nierop, and Sloot 2012).

3. Terroir or Product Provenance refers to the soil, waters, and climate of the local region of seafood production that gives seafoods their unique characteristics. The terroir of a product reflects its local eco-environment, production techniques, local knowledge, culture and history (Charters 2010; Fourcade 2012; Iversen and Hem 2008; Watson et al. 2016).

4. Branding of the seafood can be done through interpersonal and interregional marketing strategies. Country specific branding helps with product market access, and acceptance of a new product on the market. For example, “Seafood from Norway” as a brand, is a quintessential example of a local-in-global feature of Norwegian produced seafood that is marketed internationally (Carsana and Jolibert 2017; Seafood From Norway 2017)

5. Supply chain and network governance refers to the management structure of local, regional, and international organizations (associations, cooperatives, trade unions, supranational organizations). Their roles are important and influential in shaping the identity and marketing of the seafood through (i) providing and controlling for product provenance by use of Geographical Indicators or promoting seafood routes through collaboration and trade agreement and (ii) through ensuring the high quality of perishable seafood products. In this context, the current, effective urgency for reaching mutually beneficial bilateral trade agreements between the Norway and China is empirically warranted (China Daily 2019; China Embassy 2019; Zhikai and Lindkvist 2005).

These five characteristics provide a unified framework of analysis to the study’s collected data. It gives a guiding systematicity and rigor in investigating aspects of business interrelations between Norway and China seafood markets. It will also help uncover contextual nuances that give rise to the building of complex network relationships in the seafood business environment. The five dimensions framework can also be used to uncover contextual paradoxes, and help uncover the complexities of glocalization in the seafood trade networks between the two countries (Ritzer 2003; Thompson and Arsel 2004).

The evolving landscape of interpersonal relations in China

A challenge faced by most economies today is the pace and magnitude of change through developing knowledge, expertise and influences of both globalization and glocalization (Pierre 2014). The prediction by scholars that the 2000s would see a global shift of economic power toward the Far East, was illustrated in a Gross Domestic Product (GDP) weighted timeline by The Economist (2018). The Far Eastern gravitational pull in power is due in part because China is so populous, and it is a variegated economy that is developing quickly (Leung 2019; UNCTAD 2020). In 1990, there were about 750 million Chinese people who lived in extreme poverty, today, that number is reduced to 10 million. Chinás GDP per person grew by 903% from 1990 to 2017 (The Economist 2018).

Although scholars have observed that change in China continues to be influenced by Confucianism (Lee 2005; Xing 1995; Zhang, Bai, et al. 2012), the pace and magnitude of economic growth in China also means evolving societal values (McKenzie and Merrilees 2008; Pierre 2014). As such, the shift in global economic influences toward the Far East indicates a need to work toward a deeper understanding of Far Eastern cultures, and to understand the historical events that shaped its socio-economic and cultural evolution (Rarick 2008; Spence 2005). In the example of China, the functional role of interpersonal relations broadly encompassed the concept of guanxi 关系 (in simplified Chinese), has played a foundational role in creating a cohesive society and business environment both domestically and abroad. It is within the nuanced concept of guanxi that communicative social codes are formed, taught, perpetuated, and applied in social behavior (Yan et al. 2017). In a study that evaluated traditional Chinese cultural beliefs, it was found that the respondents felt that traditional values were still important, even if it was perceived that relationship building styles had become replaced in the business context by more Westernized values (Willis and Quan 2009). The subject of Chinese interpersonal relations in business network to the West remains under researched in the field of International Business (Ding and Akoorie 2009; Fang 2012; Lee 2005; Wong 2005).

While global economies might now be witnessing a wave of populism and retreat of globalization (The Economist 2017), there is a general consensus that this might not be completely true (Vahlne, Ivarsson, and Alvstam 2018). Rather, global businesses are witnessing an evolution or transitioning phase of the multinational, where in effect, multinationals and globalization is not in retreat but is morphing in structure and operation where in this new era of globalization, deeper interpersonal relations are needed (Jimenez et al. 2018; Vahlne, Ivarsson, and Alvstam 2018). Although the concept and dynamics of guanxi is evolving (Berger et al. 2018), research findings continue to suggest that cultivating good guanxi connections can expedite economic exchange which can leverage firm performance advantages (Davison, Ou, and Martinsons 2018; Huang 2011; Lee et al. 2017, 2018). Ethnographic research conducted during the 1990s found that guanxi is often associated with sentiments (renqing, 人情, gangqing 感情), face (mianzi 面子), gifts (liwu 礼物) deliberately maintained and cultivated to facilitate other social activities (Leung and Chan 2003; Smart 1999; Wong and Chan 1999; Yang 1994). More recent studies have found that guanxi dynamics might change and thus needs to be refined as Chinese societies undergo dramatic socio-economic and political changes (Berger et al. 2018; Yan et al. 2017).

Methodology

Respondents for this study were identified and recruited using the Norwegian Seafood Council Exporter Registry database. Norwegian companies who had a trade presence in Asia, particularly in China were identified and their top managers approached and asked to be respondents in this study. To obtain an in-depth understanding of the importance of cultural sensitivities in cross-border trading contexts, we approached individuals who fulfilled the following criteria of (i) having at least five years of experience in working across cultures, (ii) had decision-making capability for the enterprise (these individuals were usually in top leadership company positions) and (iii) individuals who had Chinese counterparts in their business network in China that we could contact. These cultural-spanning individuals ranged in age between 30 and 60 years of age, were mostly males and they held directorship positions in both the Norwegian and Chinese companies. As top managers in companies, they were also influential individuals in the decision making processes of the firm and could leverage on company networks for business initiatives. The respondent response rate to the call for interest in participation for this study was about 30%. In total, 14 individuals, 8 from Norway and 6 from China, agreed to be interviewed. The individuals who agreed to be interviewed were experienced industry leaders and had between ten to thirty years of experience in the seafood trade between Norway and China.

An open-ended interview framework was constructed for the purposes of this study. Each interview followed a semi-structured interview guideline. The interview guide was designed to cater for the perspectives of the respondents based on their job profiles and organization function. The semi-structured interview gave a flexible framework to which the main purpose was to encourage the respondents to share their insights and experiences of the business environments of the seafood industry. Respondents were encouraged to highlight challenges that they faced and share how they addressed these challenges.

Although this study targets a firm level analysis, within the economic sociology five dimensions framework of analysis, the questions were nonetheless designed to target several levels of units of analysis, including the (i) Individual level, with questions pertaining to the respondent themselves, i.e. “Tell us about yourself and how many years have you been working in the seafood business in the Norwegian and/or Chinese market”, “What is your role in the company” etc., the (ii) Organization level, i.e. “Tell us about your company, its vision, history and market entry strategy etc.” and the (iii) Societal level or business network level, i.e. “Can you describe your network of suppliers and/or customers, and the similarities/differences in the culture of the business environments”. The interview questions were designed as open-ended questions to accommodate the different business roles each respondent had, and to best capture their insights.

The interviews were transcribed in accordance to the Gothenburg Transcription Standard 4.6 (Nivre et al. 2004). The transcriptions were used to create a text corpus for the purpose of a corpus (data) driven text analysis. The interviews had an average span of between one to one and a half hours and rendered about 320 A4 pages of transcribed text. The corpus created contained about 160,000 words, which satisfies the criteria for small specialized corpuses, ranging between 80,000 and 200,000 words (Aston 1997). The advantage of creating a small text corpus is that the data focuses on a specific subject of interest, and it increases researcher familiarity with salient themes, and respondent concerns.

Systemic functional linguistics (SFL) (Halliday and Matthiessen 2014) in combination with the use of a word concordance software program called AntConc version 3.4 (Anthony 2019) were used in content analysis. Based on the analysis of grammatical structures, SFL views language from a functional perspective, where language is used in a transactional manner to express meaning. SFL allows for a systematic and rigorous way to conduct text analysis that takes context of use into account. The use of SFL is supported by AntConc, which is a concordance software that can retrieve word frequency counts and uncover salient themes from the respondents. AntConc was also used to perform keyword-in-context (kwic) analyses. A kwic analysis allows for an understanding of how the word was used in context, thus uncovering any accompanying or frequently occurring word collocations that reveal respondent attitudes, affect or emotions, and modality (or sense of obligation) toward the situation.

Analysis and discussion

The corpus data and the systemic functional linguistics qualitative analysis indicated a complex network of actors in the seafood sector trade between Norway and China. In correlation with perspectives from the Norwegian seafood industry magazine articles, the seafood trade across borders was indeed built by individuals who invested time and effort in building interpersonal relations in an actor-to-actor network (Stevens 2020). Respondent interviews also indicate that the influences of interrelationships between stakeholders and actors tend to span across one or more of the five dimensions, creating a multi-level, multi-perspective understanding of the seafood trade network workings, much as Harrison and Kjellberg (2014) indicated in market-as-networks theory.

The following sections will discuss the findings from the interviews and how the importance of cultural sensitivity, embeddedness, and network-as-market relate to the various dimensions of the framework that includes: (i) geographical proximity, (ii) relational proximity, (iii) terroir, (iv) branding and (v) supply chain/network governance.

Geographical proximity

In China, the quality of seafood is often associated with proximity of consumption to the place of production. Respondents conveyed that geographical proximity to a main distribution center with live seafood is a prominent feature in the Chinese consumer market. To be able to physically handle the fresh produce, feeling for firmness of flesh in the fish for example, is customary for Chinese consumers. Chinese customers, some of whom shop for the household, prefer to see, and handle the product before purchasing even if it requires an early morning meeting with the fisherman at the main wet market distribution center. Most Chinese wet markets are constructed as centers of food activities, with tributary roads lined by food hawkers and restaurants. In practice, many customers will purchase food from the wet market, and then go across the street to have their ingredients cooked by a food hawker. The physical infrastructure of the Chinese wet market thus reinforces the perception that geographical proximity contributes to the “freshness” of the seafood product, and its quality. In the past decade, food scandals in China have considerably lowered consumer confidence in food safety (Xinhua 2019). As such, Chinese respondents to this study have mentioned a preference from Chinese consumers for imported products, as imported foods are currently perceived as “safer options” compared to local produce, which gives seafood from Norway a competitive advantage. This perspective in our findings corresponds closely to findings of another recent study on seafood sales in China (Voldnes and Elde 2019; Xu et al. 2012; Zhang, Bai, et al. 2012).

With regards to building interpersonal relations in B2B, Norwegian respondents mentioned that to build trust, they would rather build relationships with fewer, but reputed steady suppliers. Their long-term goal is particularly also to understand and learn about how their Chinese partners operate in the market-as-network. The long term goal for Norwegian companies is to embed their own firm operations in the Chinese business environment.

A technological disruption to the business environment is the establishment of e-commerce platforms. Traditionally in China, people would visit their local wet market to buy fresh food. With the establishment of e-commerce platforms for direct sales, seafood can be traded from greater distances than the neighborhood wet market or grocery store. According to respondents who were distributors, e-commerce for fresh foods purchase is a promising channel of marketing. According to Chinese respondents, there is currently a 3 km district circumference preference for fresh seafood delivery to the doorstep via e-commerce sales, otherwise the consumer will need to continue to shop for seafood at the main wet market or at the local grocery stores. There is also indication from the Chinese respondents that the e-commerce purchases for seafood has the potential to become more mainstream, even if distributors remain uncertain if the trend will be as strong as for nonperishable goods such as clothes, shoes and even food items such as wine.

Relational proximity

This dimension refers to the number of intermediaries along the supply chain network between producer and end consumer. It is generally acknowledged that the greater the number of intermediaries, the greater the challenge in maintaining close interpersonal relations between producer and end consumer (Augère-Granier 2016; Renting, Marsden, and Banks 2003). According to the Chinese respondents who have close relations with restaurants as customers, the consumption of seafood is as much experiential, as it is sensory. In the Chinese seafood business environment, short supply chains are appreciated by consumers who also prefer to cultivate long-term relations with their suppliers. The more proximate the producer, or the shorter the supply chain, the more personal and informal the relationships, where product marketing can take place in the form of direct seafood tastings at the main distribution point. In our field study conducted in China, it was observed that restaurants surrounded the main wet market distribution center for seafood. Food hawkers play an important role in the business environment, acting as actors who provided value-added services for the producers as well as consumers. Interpersonal relationships are built around the reciprocal product-services encounter when customers have a favorite and trusted food hawker. The physical proximity to market and seafood produce creates a culinary and gastronomic community in the neighborhood where neighbors meet each other at the market and discuss what foods they intend to have over the day and during the week. Recipes are also discussed and shared between neighbors who meet at the market.

In relative contrast, this immediacy of contact in the business environment to Norwegian suppliers of seafood is missing. Norwegian respondents attribute the inability to cultivate proximate relationships directly with Chinese consumers to the fact that Norwegian seafood are often sold at the larger grocery stores in China. This necessarily disengages the Chinese end-market consumer in terms of consumer level and individual interrelationship building. There are also no shared Norwegian-Chinese food recipes for seafood, where Norway and China have distinct and different culinary heritage.

Provenance

According to both Norwegian and Chinese respondents, salmon produced in Norway has a high level of repute in the Chinese seafood market. It is in this aspect that interpersonal relationships are built at firm levels, between supplier and distributor for example, and also at individual levels, between producers and consumers (EIP-AGRI 2019). Seafood provenance calls to mind ‘terroir’ or the location of product origin. It also implies embedded cultural knowledge that is needed in the production and processing of seafood.

Depending on the type of seafood to be consumed, and in which social context (restaurant or family home or dinner functions etc.), end consumers and Chinese distributors are highly concerned with product provenance, because expensive foods are markers of social status and wealth. While consuming seafood might not be an extravagant affair in China where fish, seaweed and shrimp could be said to be eaten on a daily basis, the event of dining out for birthdays, weddings or even family gatherings of significance (in celebration of elder birthdays, Chinese New Year homecomings etc.) could be socially marked by having more expensive items, one of which is the Norwegian salmon. Norwegian salmon is increasingly used in the Cantonese style Chinese New Year’s auspicious lo hei (撈起) dish. Lo hei usually consists of strips of raw fish, mixed with shredded vegetables. A variety of sauces and condiments are drizzled over the ingredients. Salmon is increasingly used in these dishes because of the red salmon flesh signifies ‘good luck’ and ‘happiness’ in Chinese tradition. In this aspect, the branding of Norwegian salmon as luxurious and associated with ‘prosperity’ is a positive trend.

In this dimension, interpersonal and cross-cultural relations between Norway and China seem to be built on broader marketing campaigns, on educating the end-consumers on the luxury of seafood from Norway.

Branding and product identity

Indeed, when branding and marketing seafood in China, respondents indicate that consideration needs to be placed on the social demographic profile of the customers. With the free trade agreement (FTA) between China and Norway having renewed commitment and focus, seafood business firm owners are optimistic of the increase in sales, with the view that there is enormous potential for seafood from Norway to gain market share in China. Part of the increase in demand for seafoods in China is due to the younger, more mobile individuals of China who have traveled abroad and who have been educated in the west and who are influenced into more western dining styles. The interview data correlated with findings by the Norwegian Seafood Council (Braathen 2019) that Norwegian seafood complements modern food trends in China, where more Chinese consumers are choosing to eat seafood from Norway (if not seafood produced abroad).

A complexity from this dimension is that whilst China moves toward greater consumerism and where expensive food and drink are markers of social wealth and standing, there exists a segment of customers who remain price conscious. It is in this context that the broader inter-regional and bilateral trade agreements play a crucial role, to bring more affordable seafood from Norway to China.

Governance of supply chain network

At the moment, Chile is the main salmon supplier to China, much due to its Free trade agreement with China and a constant 6 kg supply at a lower price compared to Norwegian salmon supplies (Seaman 2019). This was also confirmed by Norwegian respondents and Chinese distributors of seafood. But while there is optimism for market expansion, respondents have raised concerns over two general themes that include, (i) fragmentation of information due to many actors in the market network, and (ii) lack of technology and shared platforms for information exchange that facilitate standardization of product cataloguing toward greater food security and traceability.

Fragmentation of information

In relation to the concept of market-as-network, the reliance on “trusted supplier” sources means that the seafood sector is highly competitive in the Chinese market. Norwegian producers are aware that unlabeled seafood from Norway can be labeled and sold in China as ‘seafood from Norway’. Some respondents did not see this as a big challenge, although false labeling of seafood does raise concern for the future marketing and consumption of seafood from Norway in China. The concern surrounds the erosion of trust for end consumers on the market when they find out that they have paid for an item that is not delivered.

Respondents shared that the mislabeling practice could in part be due to market fragmentation and lack of data sharing. When in China, fragmentation refers to the inadequate documentation controls from point of entry to secondary distributors and end-consumers. Imported seafood can be relabeled at point of entry or at the distributors because there exists different means of categorizing products when moving from Norway to China. The nonexistence of a shared information platform for import procedures, product and component labeling as well as knowledge expertise in traceability logistics, is one that is common in the global supply network management. The aim of standardization of information sharing is part reason as to the creation and existence of macro-organizational structures such as the European Union (EU) to govern and manage information asymmetries that take time to fully harmonize.

The creation of a shared platform for knowledge exchange, toward standardization of trade procedures and product labeling for the seafood industry between Norway and China under the FTA negotiations is certainly underway and being developed. Still, respondents have voiced some current challenges in the infrastructure and organization of the system both from Norway and from China, where for one respondent, “the problem is the fragmentation of the market. So, you cannot trace who is selling the seafood from Norway, if it is Norwegian seafood or from some other country or even locally produced. The market is also open, and we as distributors even, cannot control who sells after us. Maybe they sell to restaurants or they sell online. A lot still think about cheap, how cheap they can get the fish.”

Technology and shared platforms of information exchange

In the era of digital infrastructures and technological advancements, the pace of innovation, implementation and use of new technologies in China can be a disruptive force on the current management of supply chain networks. This disruption may not always be negative, but it nonetheless means that seafood producers and distributors will need to adopt more agile business models to keep up with changing technologies, the services they provide, and market demands.

As one Chinese respondent shared, a single internal software system of a multinational firm for example, can span the globe in terms of shared platforms, connecting their own suppliers with end-customers in multiple countries simultaneously. Small to medium firms have little affordable means to construct such a shared information platform. As a seafood trader and one who is interested in new technologies, the respondent would prefer if higher governance structures and infrastructure would consider creating shared technological platforms, even working toward a standardization of communication processes that might benefit overall seafood trade between Norway and China.

Due to increased competition between Norwegian and Chilean salmon in China and even locally produced seafood, this respondent anticipates the creation of technological platforms to help improve or facilitate the traceability of provenance of the seafood. Food safety and traceability is already a big topic of debate within the wine sector on the Chinese market where there are blockchain technologies being applied. The respondent mentioned thus, the use of applied blockchain technologies, QR-codes, or tamper-proof food package labels in future for seafood produced in Norway.

Practical implications

The following paragraphs will discuss the study findings in relation to the research question asked at the beginning of this study, taking into consideration, the complexities and layers of interpersonal relations spanning the five dimensions framework.

Dimensions of relational proximity can be addressed or managed between Norway and China with continued organized socio-cultural and economic activities at various points along the seafood value chain. The sharing and learning of each other’s cultural heritages such as joint activities of seafood product promotions at trade events, and the sharing of narratives through marketing campaigns can help share the norms of seafood consumption in each culture. These sharing of narratives encourage relational proximity between producers and consumers and can help toward raising awareness of the importance of terroir and quality products.

Geographical proximity can be managed in relation to the supply chain network. Actors and stakeholders can accordingly identify what is required in their immediate business environments for its efficient provision of products and services across borders. In terms of cross-border trade, digitalization and advancements in technology might help toward greater transparency in goods and services traded. A shared knowledge platform that connects suppliers with producers may help in shortening the supply chain for improved quality products and services.

The dimension of supply chain network governance includes the national, regional, and international governing structures from legal infrastructure to shared policies and trade agreements. Just as unique terroir lends seafood its identity and therefore international marketability based on individual producer commitment toward quality seafoods, it will be the macro system of support built between the two countries that will help create a robust market network. Most of the respondents considered market network governance such as having the FTA between Norway and China enforced, and building a shared information platform for seafood trade exchange, as highly important mechanisms and infrastructure that facilitates improved interpersonal and international relations for the seafood sector.

Conclusion

This study has brought findings and a discussion from a corpus driven study, investigating the dimensions of support for market-as-network business relationships in the seafood trade between Norway and China. In view that a deeper understanding of cultural sensitivity and embeddedness of economic activities across borders will be more important for future global trade, we applied an economic sociology approach toward a practical understanding of how Norway and China build social relationships toward creating a stronger, more resilient, shared seafood business environment.

Using a five dimensions framework of analysis, it was illustrated how an economic sociology approach can provide a useful and integrated theoretical lens in studying social relations in the shared business environments between Norway and China. The interview findings had also shown how respondents used their market-as-network knowledge to build stronger working relations. These findings correspond with several key studies in the literature on the importance of cultural sensitivity and embeddedness (Raskovic 2015; Vahlne and Jonsson 2017; Voldnes and Kvalvik 2017). The corpus driven analysis made salient the contextual complexities involved in the global seafood business environments between Norway and China.

With the working FTA between Norway and China, respondents are hopeful for greater market access for Norwegian seafood products in China. This finding also correlates with IB studies literature that indicate that the processes of globalization will continue to evolve (Anderson, Asche, and Garlock 2018; Vahlne, Ivarsson, and Alvstam 2018). But while there is optimism in new opportunities, some respondents are foreseeing that they will need more agile business models to cope with the rate of technology implementation and acceptance on the Chinese market for sales and purchase of Norwegian seafood products.

With Norway having a premium brand image for seafood, respondents have indicated that product integrity and authenticity labeling might become areas for future applied research. The complex fabric of supplier to end-customer networks make the task of ensuring greater integrity in the local-to-global seafood supply chain challenging where an integrative, if not integrated management perspective toward structural organization and policy alignment will be needed.

The limitations to this study are such that the study has focused solely on the seafood trade between Norway and China, and the qualitative findings could be different if other countries were to be investigated. Due to the complexities of the seafood industry business environments, it is acknowledged that there are many more perspectives along in the market network actors and stakeholders that were not reflected in this study. What is hoped however, is that the findings articulated in this study will contribute to the growing body of academic literature and practitioner discourse that continues to inform governance structures as support material in moving forward toward facilitating more efficient relations.

Avenues for future research include a broader selection of countries from East and West to be studied and compared for efficient social embeddedness and shared business environments. For the context of Norway and China, this study has illustrated that an integrated effort is needed. From individual firm commitment to broader international trade agreements, the move toward smoother, more transparent food supply chains necessarily involves multiple stakeholders, not in the least end-consumers themselves who need to take on the responsibility of self-education on food and drink consumption.

Acknowledgements

This research is part of the Nofima (The Norwegian Institute of Food, Fisheries and Aquaculture Research) strategic research program called Market Access, funded by the Norwegian Ministry of Trade, Industry and Fisheries, with project number 12361. The authors would like to acknowledge Dr. Pirjo Honkanen, Research Director of the Marketing Department at Nofima, for her editorial support.

Additional information

Funding

The present research was financially supported by Nærings- og Fiskeridepartementet.