Multidisciplinary Innovation

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Acknowledgement

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Abstract

While an ever-increasing body of research on business networks has commented on vertically connected relationships, this study embeds the horizontally connected relationships. Constructed on business network theories the paper aims to add more knowledge on business networks by developing a connection model including both vertical and horizontal connections. The model aims to explore the impact of connections on focal business relationships. It differentiates connected relationships on the basis of their vertical and horizontal natures. The purpose is to grasp the impact of these different connected relationships on the focal business relationship. The focal relationship elements are defined by commitment and trust, which capture their properties from the dyadic interaction and the two types of connected relationships.

Table of Contents

CHAPTER 1: INTRODUCTION6

Previous efforts8

CHAPTER TWO: LITERATURE REVIEW10

CHAPTER THREE: METHODOLOGY21

CHAPTER FOUR: FINDINGS AND DISCUSSION31

CHAPTER FIVE: CONCLUSION33

REFERENCES36

APPENDIX41

Chapter 1: Introduction

The main focus of business network studies is reserved for the firms' mutual relationship with suppliers and customers. The views on vertical interactions are seen as sufficient to explain the behaviour of the firms in foreign markets.

The argument is based on the opinion that network governance is bound with contracts embodied by technological and social constructions, rather than by contracts that are imposed by legal authorities. This tendency is repudiated in later studies expressing the inadequacy of available theoretical tools to uncover some of the main sources of interdependency and uncertainty (Easton and Araujo, 1992). Their suggestion is for further research on the horizontal context with the incorporation of important actors like competitors (Bengtsson and Kock, 1999; Gomes-Casseres, 1996) and non-business actors (see for example, Boddewyn, 1988; Ring et al., 1990; Hadjikhani, 1996a).

The argument is driven by indirect inter-dependency between these actors and the notion that actors, like competitors and non-business actors, can generate uncertainty for the core business activities. They contend that the earlier business network studies ignore the fact that firms' core business is influenced/influences relationships with actors in the horizontal context. Consequently, there remains an empty space for studies encompassing both horizontal and vertical dimensions. This study is based on the assumption that a dyadic relationship is bounded by two sources of uncertainties, horizontal and vertical. Constructed on business network theory, the paper aims to add more knowledge to the understanding of these theories by developing a connection model holding both vertical and horizontal connections.

Inclusion of horizontal connections raises the aspect of boundary setting, which is a crucial part of every research study. A boundary limited to the study of few aspects or/and actors can provide results, which can be different if the research boundary ...