The paper presents the concept of cooperative business models in steel enterprises in Poland. The starting point is the presentation of the concept of business models, which is defined as a way of doing business based on cooperation between enterprises. This paper presents two collaborative business models, namely outsourcing and alliance networks, comparing the theoretical assumptions with the results of research carried out in steel enterprises in Poland

A. Jabłoński

M. Jabłoński

W. Sroka

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565 METALURGIJA 52 (2013) 4, 565-568W. SROKA, A. JABŁOŃSKI, M. JABŁOŃSKICOOPERATIVE BUSINESS MODELS IN STEEL ENTERPRISES IN POLANDReceived – Prispjelo: 2012-12-04Accepted – Prihvaćeno: 2013-03-22Review Paper – Pregledni radISSN 0543-5846METABK 52(4) 565-568 (2013)UDC – UDK 669.013.003:65.01:669.013.003:658.5:658.8W. Sroka, A. Jabłoński, M. Jabłoński, Academy of Business in Dąbrowa Górnicza, Faculty of Management, Informatics & Social Sciences, Dąbrowa Górnicza, Poland.The paper presents the concept of cooperative business models in steel enterprises in Poland. The starting point is the presentation of the concept of business models, which is defi  ned as a way of doing business based on coopera-tion between enterprises. This paper presents two collaborative business models, namely outsourcing and alliance networks, comparing the theoretical assumptions with the results of research carried out in steel enterprises in Po-land.Key words: steel enterprises, cooperative business model, outsourcing, alliance networkINTRODUCTIONThe shape and the image of the market where the competitive game is played determine the new areas of management of enterprises. The product (service) of-fered to the customer is one of the factors enabling the company to achieve a competitive advantage. Modern enterprises do not compete through products or services but through precisely constructed business models. The construction of business models is one of the biggest problems facing enterprises around the world. This is because they shape the logic of proﬁ  t generation. Busi-ness models, together with their components, directly inﬂ  uence the competitive advantage achieved by the company. They also support the company’s value growth which means that they should be protected from competition. On the other hand, weaknesses in the con-struction and management of the business model can contribute to the destruction of the company’s value. This also means that the place and role of the strategy in the management of the company is constantly chang-ing. This is particularly important in times of global economic crisis, which forces companies to look for new sources of competitive advantage. Business mod-els are more and more popular amongst Polish enter-prises. They are supported by greater links between the Polish economy and the world economy, and the pres-ence of global corporations in Poland. From these mod-els, special attention should be paid to business models based on inter-organizational cooperation, both bilateral and multilateral. It is assumed that instead of compet-ing, it is always better to cooperate with a potential (or direct) competitor. Taking into account the deliberations presented, the aim of the paper is the presentation of two selected business models based on inter-organiza-tional cooperation, namely outsourcing and alliance network, and the comparison of the theoretical assump-tions with the results of direct research carried out in steel enterprises in Poland.THE CONCEPT OF THE BUSINESS MODELDifferent deﬁ  nitions of the business model are pre-sented in the literature, within which we can observe both similarities and differences. According to Morris [1], a business model is the set of products and services delivered to the market by the company, which ensures a strong relationship with current and future clients. In turn, Linder and Cantrell [2] claim that a business mod-el is a coordinated plan based on the optimal utilization of resources and relations in order to create a strategy which will be compatible with the customer’s needs. Both of these deﬁ  nitions emphasize the importance of relationships and connections between the companies. This understanding of the concept of a business model allows for a change in strategic thinking. It relates to the building of a competitive advantage through ﬂ  exible implementation of the business decisions in the system of “the current business model of today, to the current business model of tomorrow” [3]. Based on the concept of business models, a cooperative business model can be deﬁ  ned as a way of doing business with the utiliza-tion of cooperation between enterprises. This coopera-tion can take different forms, e.g. bilateral arrangements (dyadic alliances, joint ventures) or multilateral agree-ments in the form of alliance networks, virtual organi-zations, clusters, franchising, and outsourcing. Their most important features are close relationships amongst enterprises and trust. It is hard to imagine the effective functioning of any business models without these fac-tors included. Cooperative business models are becom-566   METALURGIJA 52 (2013) 4, 565-568W. SROKA et al.: COOPERATIVE BUSINESS MODELS IN STEEL ENTERPRISES IN POLANDing more and more popular throughout the world. For example, the results of the leading Japanese automotive companies, i.e. Toyota and Honda, are determined to a large extent by the partnership cooperation with their partners in the keiretsu group. More importantly, coop-erative business models are not only the domain of one sector but are becoming widely used throughout the global economy. It should be noted, however, that the problem is not to develop a business model, even the most innovative, but to implement it and thereby achieve a competitive advantage, defeat competitors and in-crease the company’s value.THE CONCEPT OF OUTSOURCINGAccording to the concept of outsourcing, the com-pany focuses on its key business instead of dealing with the activities of the entire area of   the value chain, and simultaneously sets up constant cooperation with differ-ent companies to purchase their products or services, which previously have been produced in-house. A long-term and permanent relationship between companies and the mutual beneﬁ  ts resulting from long-term coop-eration and mutual partnership is central to this concept. This represents a shift of perception and location of the supply functions within the company. Outsourcing oc-curs in most countries as well as in various sectors of the economy. It is utilised by large, multinational corpo-rations and small entities alike. It helps companies to take advantage of external services and resources, en-suring high quality and competitive prices. An advan-tage is that the partnership is based on the principle of specialization and professionalism [5]. No wonder that the total value of the ﬁ  eld of electronics has reached $ 100 billion, while in the computer chip manufacturing industry value has increased from a few billion dollars in 1992 to more than $ 50 billion in 2002 [6]. Although at the end of the twentieth century, this concept was used mainly in the IT ﬁ  eld, now we can observe dy-namic growth in other industries, primarily in the area of human resource management [7]. Outsourcing has been and continues to be widely used in traditional sec-tors of the economy, such as the steel industry. This was particularly evident in the second half of the 90’s and the beginning of the current decade, when the steel plants used this concept on a large scale in the restruc-turing process. One of the classic activities was the spinning-off the processes which were not regarded as part of the core business. These processes included: protection of property, maintenance, medical services, transportation, accounting, and others. These activities were carried out in almost all steel plants. The scale and scope of outsourcing activities executed by particular plants were the only differentiating factors [8]. These restructuring activities were not only a feature of the Polish steel industry, but were also observed in other countries, especially those from the former Eastern bloc. This was mainly due to the similarity of their pre-vious organizational structures, because all the steel mills in these countries were constructed according to a similar scheme (pattern), assuming maximum self-suf-ﬁ  ciency. Table 1 shows the outsourcing activities in Ko-sice steel plant, which is now part of U.S. Steel.This means that outsourcing is a potential source of competitive advantage, reducing business risk and bringing many beneﬁ  ts. In other words, it should be treated as a cooperative business model.FUNCTIONING OF ALLIANCE NETWORKSStrategic alliances are treated as the response to changes in the market, caused by both technological factors (convergence of products and services), market factors (increase demand) and economic factors (in-creasing competition from global companies as well as smaller local companies) [10]. This means that compa-nies, in order to maintain a competitive advantage are forced to cooperate with other ﬁ  rms. It is even believed that participation in a strategic alliance is the foundation Table 1 Outsourcing in US Steel Kosice [9]No. Area Description Year1. Maintenance Installation and handling of power equipment19912. Distribution and logisticsHandling of duty free zone, storage of strategic raw materials 19913. Administration  Protection of property 19914. Maintenance Forklift service 19925. Repairs Machine maintenance, painting, storage19926. Production Laboratories, quality control19937. Maintenance Manufacturing of refrac-tories20028. Social sphere Laundry, health clinics, training, recreation centers2003800   850   1 000    1 800   3 750   5 200   6 300   7 000   8 100   7 600   7 100   6 700   7 700   8 850   0   1 000   2 000   3 000   4 000   5 000   6 000   7 000   8 000   9 000   10 000   1986198819901992199419961998No of alliancesYearsFigure 1   The growth of no. of strategic alliances in the years 1986- 1999 [12]567 METALURGIJA 52 (2013) 4, 565-568W. SROKA et al.: COOPERATIVE BUSINESS MODELS IN STEEL ENTERPRISES IN POLANDof a company’s competitiveness. One of the reason is that alliances facilitate the implementation of world class manufacturing standards [11]. Small wonder that between 1986 and 1999, the number of alliances has increased more than tenfold (Figure 1). Alliance net-work, i.e. alliances built up on the basis of network or-ganizations is one of the most widely used cooperative strategies. They are a beneﬁ  cial alternative compared to other forms of a company’s growth. They allow the pro-duction of products and goods that are beyond the capa-bilities of the individual companies, facilitate innova-tion, maintain a high growth rate and increase ﬂ  exibility. As a result, they create opportunities to achieve a long-term competitive advantage [13]. Thus, they can be re-garded as a classic example of a cooperative business model.COOPERATIVE BUSINESS MODELS IN PRACTICESince the 90’s, the steel industry in Poland has fol-lowed the latest trends in business management. Before privatization, the largest steel mill in Poland, Huta Ka-towice, had formed several alliances in the form of joint ventures with foreign companies. One of them was the company HK ABB, formed with the Swiss-Swedish group ABB, and the second was Alkat, set up with the French company Air Liquide. A similar situation was observed in other mills, especially in Huta Sendzimira. Other mills, due to much lower potential and capacity, entered into cooperation arrangements on a much small-er scale. Among the broadly deﬁ  ned cooperative busi-ness models, the most important were links based on outsourcing. Frequently, the main separated areas of ac-tivity were: maintenance, rail and road transport, auto-mation, widely understood services (cleaning, protec-tion of property, water, medical services). From the very beginning it was assumed that the spun-off companies were oriented towards maximum reduction of operating costs. Those companies had also various protective packages, e.g. priority in receiving orders from the mills. Generally, after the take-over of the Polish steel enterprises by foreign capital at the beginning of the current decade (ArcelorMittal, CMC, Celsa) the new owners applied one of two strategies: merging the spun-off companies with the core business, or leaving the companies outside the structure. Currently, companies providing services which are necessary in the produc-tion process are usually included within the structure of consolidated enterprises [14]. For example, American CMC, the owner of Huta Zawiercie, decided to follow this course of action, and since 2005 they have operated as the plant’s departments. Spanish Celsa, which is a strategic investor in Huta Ostrowiec, applied a com-pletely different approach. Prior to privatization, the mill had spun-off companies providing different ser-vices, including despatches of refractories, industrial gases and transport. Seven companies with different le-gal status currently work for Celsa Huta Ostrowiec. The most complicated situation was observed in steel mills owned by ArcelorMittal Poland, mostly due to the scope and scale of past outsourcing activities. Initially, the situation remained unchanged as it enabled compliance with the EU requirements regarding the number of em-ployees. A comprehensive strategy for all the subsidiar-ies was subsequently prepared. The companies (activi-ties) needed to ensure the production process were in-corporated into the structure of the ArcelorMittal Po-land. For non-core business entities, such as companies dealing with the provision of medical services and tour-ism, the company is open to potential investors. The fact remains that some auxiliary functions are still out-sourced, such as transport and wastes processing [15]. In 2011, a research team from the Academy of Business in Dabrowa Gornicza conducted direct research which included a group of 125 companies operating in ﬁ  ve tra-ditional sectors of the Polish economy: steel industry and steel-related sectors such as machinery, coke, min-ing and energy. The research attempted for the most part to identify the scale and scope of the 10 selected man-agement concepts in Polish companies in these sectors [16]. The concept of outsourcing was one of the most widely used by the companies surveyed (24 indica-tions). Respondents were able to choose the use of out-sourcing by: reduction of the company’s organizational structure, reducing the number of management levels, employment reduction, business process outsourcing, outsourcing in processing and information manage-ment, IT outsourcing, outsourcing of HR functions, payroll, staff leasing. Of these, two concepts were most frequently indicated: “reduction of the company’s orga-nizational structure, and “reducing the number of man-agement levels” and “employment reduction” – re-sponses of this type were given by 15 and 18 companies respectively. All other proposals were much less com-mon (less, than 10 indications). The relatively minimal interest in the outsourcing of IT and HR functions is surprising, as they are generally considered amongst the most common. Nine and four companies indicated the utilization of these concepts respectively. In these same studies, one of the concepts analyzed was inter-organi-zational cooperative strategies (alliances, networks, vir-tual organizations). However, in contrast to outsourc-ing, inter-organizational cooperation strategies were among the least popular management concepts utilized by the companies (only nine indications). Respondents were able to choose from the following options: bilat-eral alliances in the form of: 1) partial purchase of shares in the partner company, mutual exchange of shares (cross-sharing), creation of a separate entity (a joint venture company), loose agreements such as the ap-pointment of a task team to work in R&D; 2) network organization; 3) virtual organization. Respondents mainly favoured the formation of bilateral alliances, among which “loose agreements ...” were strongly dominant. Other forms of bilateral alliances were seem-568   METALURGIJA 52 (2013) 4, 565-568W. SROKA et al.: COOPERATIVE BUSINESS MODELS IN STEEL ENTERPRISES IN POLANDingly utilized only two or three times. It is worth noting that two respondents identiﬁ  ed the creation of virtual and network organizations, which means that the re-spondents mainly use the simplest forms of inter-orga-nizational cooperation. On the other hand, it should be noted that virtual organizations, by nature, are rather the domain of other sectors of the economy.CONCLUSIONCooperative business models are regarded as the most promising strategy. This is an opportunity to gain access to the resources of the partner, learn from it and acquire new skills. In other words, it is a chance to im-prove the competitive position of the company, irre-spective of the sector of activity. On the other hand, the research has shown that the potential for cooperation in the steel mills has not yet been fully optimised. This particularly relates to the alliances and alliance net-works, because outsourcing is widely used by the com-panies surveyed. This means that there is a chance for a company to expand activities in the ﬁ  eld of alliances, while keeping in mind that it is always better to cooper-ate than to compete, even with direct competitors.REFERENCES[1]  Morris L.: Business model warfare. The strategy of busi-ness breakthroughs, University of Pennsylvania, May 2003.[2]  Linder J. C., Cantrell S.: Changing business models: sur-veying the landscape Accenture institute for strategic change, May 2004, 7-9.[3]  Jabłoński A.: Modele biznesu w sektorach pojawiających się i schyłkowych, Tworzenie przewagi konkurencyjnej przedsiębiorstwa opartej na jakości i kryteriach ekolo-gicznych, Wyższa Szkoła Biznesu, Dąbrowa Górnicza 2008, 19.[4]  Sroka W.: Global corporations and their growth through mergers and acquisitions: pros and cons, (in:) S.Hittmar et al. (ed.) Theory of Management 4, University of Zilina, 2011, 62-68.[5]  Sitko S., Szast S.: Wykorzystanie outsourcingu procesów biznesowych w Polsce na tle wybranych hiszpańskich i amerykańskich organizacji, Organizacja i Zarządzanie, Politechnika Śląska, 2008, 1.[6]  Banjaafar S., Elahi E., Donohue K. L.: Outsourcing via   service competition, Management Science, 53 (2007) 2, 241-259.[7]  Andrews N., Foley J.: Step by step to successful HR outsourcing, Human Resource Management, 12 (2004) 7, 29-33.[8]  Sroka W.: Sieci aliansów: domena sektorów zaawansowa-nej techniki?, Hutnik-Wiadomości Hutnicze, 75 (2008) 1, 22-28.[9]  Nowe oblicza outsourcingu w hutnictwie, Konferencja hutnicza Nowego Przemysłu, Katowice, 24.05.2004. www. kolajaandpartners.com/dodatki/.../outsourcing_Hutnic-twie.pdf.[10]  Golonka M.: Strategie kooperacji. Jak to robią globalni li-derzy ICT, Przegląd Organizacji (2012) 10, 37-40.[11]  Gajdzik B.: World class manufacturing in metallurgical entetrprise, Metalurgija, 52 (2013) 1, 131-134.[12]  Gilsing V. A., Lemmens C.: Strategic Alliance Networks and Innovation - A Deterministic and Voluntaristic View Combined, Technology Analysis & Strategic Management, 19 (2007) 2, 227-249.[13]  Nosella A., Petroni G.: Multiple network leadership as a strategic asset: the Carlo Gavazzi Space case, Long Range Planning, 40 (2007) 2, 178-201.[14]  Gajdzik B., Sroka W.: Analytic study of the capital restruc-turing process in metallurgical enterprises around the World and in Poland, Metalurgija, 51 (2012) 2, 265-268.[15]  Gajdzik B.: Concentration on knowledge and change ma-nagement at metallurgical company, Metalurgija, 47 (2008) 2, 142-144.[16]  Lisiński M., Sroka W., Brzeziński P., Jabłoński A., Stuglik J.: Application of modern management concepts by Polish companies - analysis of research results, Organizacija (2012) 2, 41-49.Note:   The responsible translator for English language is Andrew Gillin, Katowice, Poland

Cooperative business models in steel enterprises in Poland

Hrčak - Portal of scientific journals of Croatia

565METALURGIJA 52 (2013) 4, 565-568W. SROKA, A. JABŁOŃSKI, M. JABŁOŃSKICOOPERATIVE BUSINESS MODELS IN STEEL ENTERPRISES IN POLANDReceived – Prispjelo: 2012-12-04Accepted – Prihvaćeno: 2013-03-22Review Paper – Pregledni radISSN 0543-5846METABK 52(4) 565-568 (2013)UDC – UDK 669.013.003:65.01:669.013.003:658.5:658.8W. Sroka, A. Jabłoński, M. Jabłoński, Academy of Business in Dąbrowa Górnicza, Faculty of Management, Informatics & Social Sciences, Dąbrowa Górnicza, Poland.The paper presents the concept of cooperative business models in steel enterprises in Poland. The starting point is the presentation of the concept of business models, which is defi ned as a way of doing business based on coopera-tion between enterprises. This paper presents two collaborative business models, namely outsourcing and alliance networks, comparing the theoretical assumptions with the results of research carried out in steel enterprises in Po-land.Key words: steel enterprises, cooperative business model, outsourcing, alliance networkINTRODUCTIONThe shape and the image of the market where the competitive game is played determine the new areas of management of enterprises. The product (service) of-fered to the customer is one of the factors enabling the company to achieve a competitive advantage. Modern enterprises do not compete through products or services but through precisely constructed business models. The construction of business models is one of the biggest problems facing enterprises around the world. This is because they shape the logic of proﬁ t generation. Busi-ness models, together with their components, directly inﬂ uence the competitive advantage achieved by the company. They also support the company’s value growth which means that they should be protected from competition. On the other hand, weaknesses in the con-struction and management of the business model can contribute to the destruction of the company’s value. This also means that the place and role of the strategy in the management of the company is constantly chang-ing. This is particularly important in times of global economic crisis, which forces companies to look for new sources of competitive advantage. Business mod-els are more and more popular amongst Polish enter-prises. They are supported by greater links between the Polish economy and the world economy, and the pres-ence of global corporations in Poland. From these mod-els, special attention should be paid to business models based on inter-organizational cooperation, both bilateral and multilateral. It is assumed that instead of compet-ing, it is always better to cooperate with a potential (or direct) competitor. Taking into account the deliberations presented, the aim of the paper is the presentation of two selected business models based on inter-organiza-tional cooperation, namely outsourcing and alliance network, and the comparison of the theoretical assump-tions with the results of direct research carried out in steel enterprises in Poland.THE CONCEPT OF THE BUSINESS MODELDifferent deﬁ nitions of the business model are pre-sented in the literature, within which we can observe both similarities and differences. According to Morris [1], a business model is the set of products and services delivered to the market by the company, which ensures a strong relationship with current and future clients. In turn, Linder and Cantrell [2] claim that a business mod-el is a coordinated plan based on the optimal utilization of resources and relations in order to create a strategy which will be compatible with the customer’s needs. Both of these deﬁ nitions emphasize the importance of relationships and connections between the companies. This understanding of the concept of a business model allows for a change in strategic thinking. It relates to the building of a competitive advantage through ﬂ exible implementation of the business decisions in the system of “the current business model of today, to the current business model of tomorrow” [3]. Based on the concept of business models, a cooperative business model can be deﬁ ned as a way of doing business with the utiliza-tion of cooperation between enterprises. This coopera-tion can take different forms, e.g. bilateral arrangements (dyadic alliances, joint ventures) or multilateral agree-ments in the form of alliance networks, virtual organi-zations, clusters, franchising, and outsourcing. Their most important features are close relationships amongst enterprises and trust. It is hard to imagine the effective functioning of any business models without these fac-tors included. Cooperative business models are becom-566  METALURGIJA 52 (2013) 4, 565-568W. SROKA et al.: COOPERATIVE BUSINESS MODELS IN STEEL ENTERPRISES IN POLANDing more and more popular throughout the world. For example, the results of the leading Japanese automotive companies, i.e. Toyota and Honda, are determined to a large extent by the partnership cooperation with their partners in the keiretsu group. More importantly, coop-erative business models are not only the domain of one sector but are becoming widely used throughout the global economy. It should be noted, however, that the problem is not to develop a business model, even the most innovative, but to implement it and thereby achieve a competitive advantage, defeat competitors and in-crease the company’s value.THE CONCEPT OF OUTSOURCINGAccording to the concept of outsourcing, the com-pany focuses on its key business instead of dealing with the activities of the entire area of ?the value chain, and simultaneously sets up constant cooperation with differ-ent companies to purchase their products or services, which previously have been produced in-house. A long-term and permanent relationship between companies and the mutual beneﬁ ts resulting from long-term coop-eration and mutual partnership is central to this concept. This represents a shift of perception and location of the supply functions within the company. Outsourcing oc-curs in most countries as well as in various sectors of the economy. It is utilised by large, multinational corpo-rations and small entities alike. It helps companies to take advantage of external services and resources, en-suring high quality and competitive prices. An advan-tage is that the partnership is based on the principle of specialization and professionalism [5]. No wonder that the total value of the ﬁ eld of electronics has reached $ 100 billion, while in the computer chip manufacturing industry value has increased from a few billion dollars in 1992 to more than $ 50 billion in 2002 [6]. Although at the end of the twentieth century, this concept was used mainly in the IT ﬁ eld, now we can observe dy-namic growth in other industries, primarily in the area of human resource management [7]. Outsourcing has been and continues to be widely used in traditional sec-tors of the economy, such as the steel industry. This was particularly evident in the second half of the 90’s and the beginning of the current decade, when the steel plants used this concept on a large scale in the restruc-turing process. One of the classic activities was the spinning-off the processes which were not regarded as part of the core business. These processes included: protection of property, maintenance, medical services, transportation, accounting, and others. These activities were carried out in almost all steel plants. The scale and scope of outsourcing activities executed by particular plants were the only differentiating factors [8]. These restructuring activities were not only a feature of the Polish steel industry, but were also observed in other countries, especially those from the former Eastern bloc. This was mainly due to the similarity of their pre-vious organizational structures, because all the steel mills in these countries were constructed according to a similar scheme (pattern), assuming maximum self-suf-ﬁ ciency. Table 1 shows the outsourcing activities in Ko-sice steel plant, which is now part of U.S. Steel.This means that outsourcing is a potential source of competitive advantage, reducing business risk and bringing many beneﬁ ts. In other words, it should be treated as a cooperative business model.FUNCTIONING OF ALLIANCE NETWORKSStrategic alliances are treated as the response to changes in the market, caused by both technological factors (convergence of products and services), market factors (increase demand) and economic factors (in-creasing competition from global companies as well as smaller local companies) [10]. This means that compa-nies, in order to maintain a competitive advantage are forced to cooperate with other ﬁ rms. It is even believed that participation in a strategic alliance is the foundation Table 1 Outsourcing in US Steel Kosice [9]No. Area Description Year1. Maintenance Installation and handling of power equipment19912. Distribution and logisticsHandling of duty free zone, storage of strategic raw materials 19913. Administration Protection of property 19914. Maintenance Forklift service 19925. Repairs Machine maintenance, painting, storage19926. Production Laboratories, quality control19937. Maintenance Manufacturing of refrac-tories20028. Social sphere Laundry, health clinics, training, recreation centers2003800   850   1 000   1 800   3 750   5 200   6 300   7 000   8 100   7 600   7 100   6 700   7 700   8 850   0   1 000   2 000   3 000   4 000   5 000   6 000   7 000   8 000   9 000   10 000   1986198819901992199419961998No of alliancesYearsFigure 1  The growth of no. of strategic alliances in the years 1986- 1999 [12]567METALURGIJA 52 (2013) 4, 565-568W. SROKA et al.: COOPERATIVE BUSINESS MODELS IN STEEL ENTERPRISES IN POLANDof a company’s competitiveness. One of the reason is that alliances facilitate the implementation of world class manufacturing standards [11]. Small wonder that between 1986 and 1999, the number of alliances has increased more than tenfold (Figure 1). Alliance net-work, i.e. alliances built up on the basis of network or-ganizations is one of the most widely used cooperative strategies. They are a beneﬁ cial alternative compared to other forms of a company’s growth. They allow the pro-duction of products and goods that are beyond the capa-bilities of the individual companies, facilitate innova-tion, maintain a high growth rate and increase ﬂ exibility. As a result, they create opportunities to achieve a long-term competitive advantage [13]. Thus, they can be re-garded as a classic example of a cooperative business model.COOPERATIVE BUSINESS MODELS IN PRACTICESince the 90’s, the steel industry in Poland has fol-lowed the latest trends in business management. Before privatization, the largest steel mill in Poland, Huta Ka-towice, had formed several alliances in the form of joint ventures with foreign companies. One of them was the company HK ABB, formed with the Swiss-Swedish group ABB, and the second was Alkat, set up with the French company Air Liquide. A similar situation was observed in other mills, especially in Huta Sendzimira. Other mills, due to much lower potential and capacity, entered into cooperation arrangements on a much small-er scale. Among the broadly deﬁ ned cooperative busi-ness models, the most important were links based on outsourcing. Frequently, the main separated areas of ac-tivity were: maintenance, rail and road transport, auto-mation, widely understood services (cleaning, protec-tion of property, water, medical services). From the very beginning it was assumed that the spun-off companies were oriented towards maximum reduction of operating costs. Those companies had also various protective packages, e.g. priority in receiving orders from the mills. Generally, after the take-over of the Polish steel enterprises by foreign capital at the beginning of the current decade (ArcelorMittal, CMC, Celsa) the new owners applied one of two strategies: merging the spun-off companies with the core business, or leaving the companies outside the structure. Currently, companies providing services which are necessary in the produc-tion process are usually included within the structure of consolidated enterprises [14]. For example, American CMC, the owner of Huta Zawiercie, decided to follow this course of action, and since 2005 they have operated as the plant’s departments. Spanish Celsa, which is a strategic investor in Huta Ostrowiec, applied a com-pletely different approach. Prior to privatization, the mill had spun-off companies providing different ser-vices, including despatches of refractories, industrial gases and transport. Seven companies with different le-gal status currently work for Celsa Huta Ostrowiec. The most complicated situation was observed in steel mills owned by ArcelorMittal Poland, mostly due to the scope and scale of past outsourcing activities. Initially, the situation remained unchanged as it enabled compliance with the EU requirements regarding the number of em-ployees. A comprehensive strategy for all the subsidiar-ies was subsequently prepared. The companies (activi-ties) needed to ensure the production process were in-corporated into the structure of the ArcelorMittal Po-land. For non-core business entities, such as companies dealing with the provision of medical services and tour-ism, the company is open to potential investors. The fact remains that some auxiliary functions are still out-sourced, such as transport and wastes processing [15]. In 2011, a research team from the Academy of Business in Dabrowa Gornicza conducted direct research which included a group of 125 companies operating in ﬁ ve tra-ditional sectors of the Polish economy: steel industry and steel-related sectors such as machinery, coke, min-ing and energy. The research attempted for the most part to identify the scale and scope of the 10 selected man-agement concepts in Polish companies in these sectors [16]. The concept of outsourcing was one of the most widely used by the companies surveyed (24 indica-tions). Respondents were able to choose the use of out-sourcing by: reduction of the company’s organizational structure, reducing the number of management levels, employment reduction, business process outsourcing, outsourcing in processing and information manage-ment, IT outsourcing, outsourcing of HR functions, payroll, staff leasing. Of these, two concepts were most frequently indicated: “reduction of the company’s orga-nizational structure, and “reducing the number of man-agement levels” and “employment reduction” – re-sponses of this type were given by 15 and 18 companies respectively. All other proposals were much less com-mon (less, than 10 indications). The relatively minimal interest in the outsourcing of IT and HR functions is surprising, as they are generally considered amongst the most common. Nine and four companies indicated the utilization of these concepts respectively. In these same studies, one of the concepts analyzed was inter-organi-zational cooperative strategies (alliances, networks, vir-tual organizations). However, in contrast to outsourc-ing, inter-organizational cooperation strategies were among the least popular management concepts utilized by the companies (only nine indications). Respondents were able to choose from the following options: bilat-eral alliances in the form of: 1) partial purchase of shares in the partner company, mutual exchange of shares (cross-sharing), creation of a separate entity (a joint venture company), loose agreements such as the ap-pointment of a task team to work in R&D; 2) network organization; 3) virtual organization. Respondents mainly favoured the formation of bilateral alliances, among which “loose agreements ...” were strongly dominant. Other forms of bilateral alliances were seem-568  METALURGIJA 52 (2013) 4, 565-568W. SROKA et al.: COOPERATIVE BUSINESS MODELS IN STEEL ENTERPRISES IN POLANDingly utilized only two or three times. It is worth noting that two respondents identiﬁ ed the creation of virtual and network organizations, which means that the re-spondents mainly use the simplest forms of inter-orga-nizational cooperation. On the other hand, it should be noted that virtual organizations, by nature, are rather the domain of other sectors of the economy.CONCLUSIONCooperative business models are regarded as the most promising strategy. This is an opportunity to gain access to the resources of the partner, learn from it and acquire new skills. In other words, it is a chance to im-prove the competitive position of the company, irre-spective of the sector of activity. On the other hand, the research has shown that the potential for cooperation in the steel mills has not yet been fully optimised. This particularly relates to the alliances and alliance net-works, because outsourcing is widely used by the com-panies surveyed. This means that there is a chance for a company to expand activities in the ﬁ eld of alliances, while keeping in mind that it is always better to cooper-ate than to compete, even with direct competitors.REFERENCES[1] Morris L.: Business model warfare. The strategy of busi-ness breakthroughs, University of Pennsylvania, May 2003.[2] Linder J. C., Cantrell S.: Changing business models: sur-veying the landscape Accenture institute for strategic change, May 2004, 7-9.[3] Jabłoński A.: Modele biznesu w sektorach pojawiających się i schyłkowych, Tworzenie przewagi konkurencyjnej przedsiębiorstwa opartej na jakości i kryteriach ekolo-gicznych, Wyższa Szkoła Biznesu, Dąbrowa Górnicza 2008, 19.[4] Sroka W.: Global corporations and their growth through mergers and acquisitions: pros and cons, (in:) S.Hittmar et al. (ed.) 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Cooperative business models in steel enterprises in Poland

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