Network theory and countertrade transactions

Traditional approaches towards countertrade view it in terms of the characteristics of isolated actors engaging in different forms of countertrade. An alternative approach for understanding countertrade is provided by the network paradigm. Countertrade, because of its complexity, reciprocity and government involvement, involves connected relationships in which the core transaction impinges on related transactions in various ways. Networks of actors are formed to undertake countertrade activities which involve the transforming of resources. This transformation occurs in an atmosphere which influences the nature of the relationships and the transaction is influenced by factors in the environment which gives rise to the need for countertrade. In this paper, three case studies of networks of relationships in countertrade transactions involving Australian organisations are described. These descriptions in each case are at the negotiation/early implementation stage and then six to ten years later at the point where the transaction is completed or nearing completion. The changes which have taken place in the network during this period are discussed in terms of actors, activities, resource transformation, atmosphere, relationships and structure. Applying the network approach to analysing countertrade, sharpens the focus on a number of characteristics of countertrade which distinguish it from other forms of international business behaviour.