Author: | Buvik, A. Groenhaug, K. |
Title: | Inter-firm dependence, environmental uncertainty and vertical co-ordination in industrial buyer-seller relationships |
Journal: | Omega
2000 : AUG, VOL. 28:4, p. 445-454 |
Index terms: | Industries Companies Models Theories |
Freeterms: | Transaction cost analysis Buyer-seller relationships Environmental uncertainty Vertical co-ordination |
Language: | eng |
Abstract: | Effective co-ordination of business-to-business relationships is an important determinant of firms' competitiveness under changing market conditions. Drawing on transaction cost analysis (TCA) and resource-dependence theory (RDT), this paper analyzes the effects of inter-firm dependence and environmental uncertainty on vertical co-ordination in industrial purchasing relationships. Analysis of data from a survey of 157 industrial buyers of items repetitively used in production shows that the RDT-predicted association btw. environmental uncertainty and vertical co-ordination is highly contingent on the magnitude of the present safeguarding problem in supplier relationships. When asset specificity is modest, the safeguarding problem is trivial and substantial environmental uncertainty induces higher inter-firm co-ordination in order to handle the need for environmental adaptation. There are more results reported, and implications for theory and practice in business-to-business relationships are highlighted. |
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