Business Association Activities

---

Business associations provide a wide range of key services to members, such as managerial, financial, business, legal, marketing, and technical (Best, 1990). Moreover, they can support members with an equally wide range of complementary functions. Doner and Schenider (2000) identified associational contributions to economic performance into two main categories: market-complementing and market-supporting. Market-supporting functions are instances where associations push underperforming states to provide those public goods that only states can provide, like strong property rights and effective public administration. Associations contribute indirectly through pressure on public officials.

Market-complementing activities involve direct coordination among firms. The authors analyze a wide range of market-complementing activities: macroeconomic stabilization and reform, horizontal coordination, vertical coordination, lowering the costs of information, standards setting, and quality upgrading. Moreover, they identified more productive associations as characterized by high member density, the ability to provide valuable resources to their members and adequate internal mechanisms for mediating member interests. Furthermore, other than economic-related impacts, business associations possess a relevant social dimension (Nadvi, 1999). They can act as a forum, providing members the possibility to meet and interact informally (Bennett, 1996).

Finally, different authors suggest that the functions of local business associations can be categorized in three main types of activities (Alberti, 1999; Nadvi, 1999):

1. Coordination and regulation

2. Representation of association’s interests to various levels of government

3. Provision of “real” services

The coordination role of a business association can influence horizontally the local producer, and vertically the supply chain in terms of forward and backward links (Rabellotti, 1999; Rabellotti & Schmitz, 1999). The regulation role is a consequence of the mediating role an association could play in coordinating business conduct between associates. However, any recognition of the regulatory power is totally based on the legitimacy of the association (Nadvi, 1999).

The representation of interest is probably the main aim of the association. It is the result of a three-step process as suggested by Alberti (1999):

1. Identification of interest: It is the political process that leads to the identification of the association reach versus competitors and potential supporters.

2. Legitimization: It is the process in which associations gain recognition.

3. Favorable conditions: Once a business association has identified the interest to protect and is legitimate in representing such interests, it can act on the market, with institutions, local government, or state to obtain the best conditions and benefits for its members.

Thus, other than managing the relationship with its associates, an association lobbies the institutions and brokerages service providers for its members. Among these types of activities, the market-supporting functions discussed above can be comprised. Therefore, even though some studies argue that such conduct results in seeking unproductive rents rather than the common or public interest, it may also provide a range of services that reduce information and coordination costs (Doner & Schneider, 2000).

The provision of real services is the most “visible” part of the traditional business associations’ activity. It is represented by all the goods and services the association can provide to its members, including (Alberti, 1999; Nadvi, 1999):

• General services (technical and managerial advice, information services, accounting and fiscal fulfilments services, personnel training)

• Technology support (both in terms of product and process)

• Linkage to local and global trade fairs

• Benchmarking services

The identification, for each activity, of the relevant organizations involved allows formation of the outline of a relationship framework. Relationships are fundamental, as any business association relays heavily on the relationships among all the different organizations involved in its activities. Thus, the “quality” of the relationships developed by each association is a possible source of its main competitive advantage: the ability to attract members and increase “visibility.” Moreover, stable and beneficial relationships with members, service providers, and higher institutions are an essential asset for developing a network of IO relations (Alberti, 1998). Consequently, an improvement in the management of the relations gives to the association the power to satisfy its members’ needs, leading to an improvement in the member–association relationship, because members feel more represented. This aspect is even more critical as a plethora of authors has already endorsed the necessity of a rethink in association strategies by focusing on relationship management (Alberti, 1998; Benevolo, 1997; Bubbio, 1997; Zan, 1992).

ICT-based solutions have always proven to be effective means of efficiently managing information flows; thus, the inherited potentials of ICTs to support business association relationships are enormous. The design of a framework of the relationships involved in a business association should then represent the first step to studying the most relevant relations and both impacts and opportunities of ICT support.

---